International markets rallied overnight as positive news flooded the markets and whet investor risk appetites.

Markets were significantly affected by two factors; President Obama stating his confidence that a compromise may be struck to avoid the fiscal cliff; and Statistical data showing sales of previously owned US homes in October climbing to 4.79 million, close to a two year high.

In the US, the Dow Jones added 208 points (+1.7%) to settle at 12796 whilst the S&P gained 27 points (+2%) to settle at 1387. The Nasdaq increased 63 points (+2.2%) to settle at 2916.

In Europe, the UK's FTSE rose by 132 points (+2.4%) to settle at 5738 whilst Germany's DAX climbed 173 points (+2.5%) to settle at 7124. France's CAC added 98 points (+2.9%) to settle at 3440.

In the commodity space, crude oil advanced due to concerns that the geopolitical unrest in the Middle East may negatively impact supply levels. Crude oil for January delivery traded to its highest since last month as the commodity increased by $2.36 (+2.7%) to settle at $89.28.

Gold also rallied due to a weaker US dollar. Bullion futures for December delivery increased 1.1% to settle at $1734.40 an ounce. In the currency space, the Japanese yen fell against its peers after opposition leader, Mr. Shinzo Abe, reiterated his intentions to pursue more aggressive monetary policies.

The euro gained against the US dollar due to speculation that Greece will soon receive financial aid. Finally, the US dollar did not fare well against its counterparts as investors sought riskier alternatives.

Today will see the release of the CB Leading Index m/m (10:00am, AEDT), and RBA Gov. Stevens speech (6:00pm, AEDT).

is a post from: Australian Stock Report Market Pulse Blog