The first full week of trading for 2019 got off to a strong start as the S&P/ASX200 rallied to close up 1.14 per cent to 5,683.2.
The rally follows a turnaround in the fortune of the US equities market, which rocketed higher on Friday after a slow start to the year.
The Nasdaq, which bore the brunt of the late-2018 rout, rallied the hardest to add 4.26 per cent on Friday, while the Dow Jones rose 3.29 per cent and the S&P 500 surged 3.43 per cent.
It was US jobs and wages data that “shot the ball out of the park” and drove the gains, according to investment firm XM.
“It was a very very strong December and November period for job creation and retail sales,” CEO Peter McGuire told Business Breakfast.
The better than expected figures helped allay fears that the US economy was slowing down, with more good news expected as important consumer data is released.
“When those numbers are released, they’re going to be extraordinary. I reckon they’ll be the best over the last couple of decades,” McGuire explained.
“The consumer represents around 70 per cent [of GDP] and they’re really on fire. It’s booming in the States.”
However, the strong US economy was only half the story.
Jerome Powell, the US Federal Reserve chair, came out to say that America’s central bank would be “patient” and “flexible” in raising rates.
The message soothed market fears that interest rates would be raised too quickly, sending the market higher.
“It really does create a sense of stability from the Fed… and [indicates] more potential to create growth over the next three to six months,” McGuire said.
Watch the interview above for more analysis.