Global markets enjoyed widespread gains overnight as investors cheered the potential for more stimulus from the US Fed and as Europe’s central bankers repeated their call for unified efforts to combat the region’s financial issues.

Markets continue to take their cues from Europe with volatility expected ahead of a key election in Greece this weekend.

The vote could determine the country’s future in 17-nation, euro-currency bloc.

In London the UK's FTSE 100 put on 41 points (+0.8%) to settle at 5474, whilst the French CAC (+0.1%) and German DAX (+0.3%) also enjoyed gains.

Stateside, the Dow Jones rallied 163 points (+1.3%) to settle at 12574, whilst the broader S&P (+1.2%) and tech-heavy NASDAQ (+1.2%) enjoyed similar gains.

In US economic news, optimism among small businesses slipped slightly in May from the previous month.

Elsewhere, the Labor Department reported import prices for May posted their biggest monthly drop in nearly two years.

The Aussie dollar rallied overnight and is now trading within striking distance of parity with the greenback, at US$0.9970.

The euro fell against most of its major counterparts after Spanish bond yields surged and Fitch Ratings said the nation won't meet budget-deficit goals, adding to concern Europe's debt crisis is worsening.

Oil rose from an eight-month low on speculation that policy makers will do more to stimulate the economy and on expectations that US inventories dropped.

Oil for July delivery gained 62 cents to settle at $83.32 a barrel on the New York Mercantile Exchange.

Gold advanced for a third consecutive session on speculation that policy makers will announce further stimulus measures to boost growth, increasing demand for bullion as a hedge against inflation.

In company news, Charter Hall Retail REIT has declared any FY12 distribution of 26.1 cents per unit, a 5.2% increase on last year's payout.

Today's session will bring us that latest Westpac consumer sentiment reading, at 10:30am, AEST.

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Morning Market Analysis: Stimulus Hopes is a post from: Australian Stock Report Market Pulse Blog