Markets Live: Base metal rebound supports BHP, Rio

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9:38am

Here are the overnight market highlights:

SPI futures up 20 points or 0.3% to 6220 at about 7am AEST

AUD +0.5% to 74.15 US cents

On Wall St: Dow +0.8% S&P 500 +0.5% Nasdaq flat

In New York, BHP +4% Rio +3.9% Atlassian -2.9%

In Europe: Stoxx 50 +0.9% FTSE +0.7% CAC +1% DAX +1.1%

Spot gold flat at $US1224.79 an ounce at 2.59pm New York time

Brent crude +0.4% to $US73.35 a barrel

US oil +0.8% to $US68.46 a barrel

Iron ore -0.3% to $US65.57 a tonne

Dalian iron ore n/a

LME aluminium +0.7% to $US2084.5 a tonne

LME copper +2.7% to $US6295 a tonne

2-year yield: US 2.63% Australia 2.12%

5-year yield: US 2.82% Australia 2.33%

10-year yield: US 2.95% Australia 2.72% Germany 0.39%

Local data: Skilled vacancies June, Second quarter CPI; NZ trade June

Overseas data: German IFO index July; US new home sales June

9:19am

Magellan boss and Rich Lister Hamish Douglass is preparing for the possibility that the US 10-year Treasury yield breaks through 4 per cent in 12 to 18 months' time, sparking a 30 per cent sell-off in global equities, should the US Federal Reserve find itself surprised by resurgent inflation.

While that sounds dramatic, it's just as likely in the fund manager's view that the Fed keeps tightening methodically and bond yields rise to 4 per cent, but in an orderly fashion and without an inflationary scare.

Even so, Mr Douglass believes there is a strong case for being more tactical. He has increased his cash weighting in the Magellan Global Fund to 18 per cent, the highest since 2009.

"Only conservative investors sleep well," he says.

Vesna Poljak has the full story here.

9:00am

Good morning and welcome to the Markets Live blog for Wednesday.

Your editor today is William McInnes.

This blog is not intended as investment advice.

Fairfax Media with wires.