The US VIX fell to 24 to trade at two-month low, aided by reports from Oxford University and biopharmaceutical company AstraZeneca that their COVID-19 vaccine has shown early signs of producing anti-bodies. Though the initial rally on that news was faded by market participants, its added to hopes that the path out of the virus crisis is becoming slightly clearer.

3. EU leaders inch towards compromise on recovery fund: For the most part, it was all eyes on Europe overnight. European leaders have inched closer to an agreement on an economic recovery package for the bloc, after several days negotiations and brinkmanship.

Once again with the North-South divide apparent, reports have emerged that the EU will agree to 750 billion ($1.22 trillion) package, that will include a watered-down 390 billion, rather than 500 billion, in grants. The news underpinned a further push higher in the Euro in overnight trade, with European yield spreads narrowing significantly.

4. FX markets show a bias towards risk and growth: Price action in broader currency markets proved bullish, too. The stronger Euro pushed the Dollar down, and the general risk-on mentality of market participants bolstered growth currencies.

The Pound led the charge higher, making a foray into the 1.26-handle, while the safe-haven Japanese Yen was the major underperformer. The AUD/USD continued to grind its way higher, to push above the 70-cent handle, and eye down a challenge of technical resistance at Junes highs around 0.7050.

5. Bond yields and gold signal some degree of caution: There were perhaps some concerning signals in price action overnight. Despite the lift in risk-assets, and amidst talk of more economic stimulus in the US and Europe, sovereign bond yields continued to push lower last night.

Perhaps a reflection more of future monetary policy than economic fundamentals, the benchmark 10 Year US Treasury yield fell to 61 basis points overnight. The broad-based decline yields gave gold prices another boost, which fetched as much as $US1820 in US trade, to record a new 9-year high.

6. ASX200 to open higher, as focus remains on COVID-19: The ASX200 ought to follow Wall Streets positive lead this morning, with SPI Futures implying the index will open roughly 0.8 per cent higher.

Local investors will remain on virus-watch, as Australias COVID-19 second wave remains preciously at a crossroad. Intraday volatility has proven greatest around the times of the Victorian and New South Wales daily COVID-19 updates. The trend held true again yesterday, with yesterdays bank and energy 0.53 per cent drop in the ASX200 precipitated by the addresses.

7. RBA to highlight the calendar in the day ahead: Local trade will be highlighted by RBA news today. The central bank releases the minutes for its July meeting, while RBA Governor Lowe will deliver a speech shortly after that release titled COVID-19: The Labor Market and Public-sector Balance Sheets.

As always, the markets will searching for clues from the RBA about the changing outlook for the domestic economy, along with potential signs of greater and/or new policy support the central bank may ply if the countrys recovery begins to peter-away.

8. Market watch:

ASX futures up 42 points or 0.7% to 6012 near 7am AEST

This column was produced in commercial partnership between The Sydney Morning Herald, The Age and IG

Information is of a general nature only.

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8@eight: ASX set to rise as tech giants surge on Wall Street - Sydney Morning Herald