Craigs Investment Partners broker Chris Timms said the relaxed mood was partly because of the decreasing likelihood of a US strike against Syria, expectations that the Federal Reserve's tapering would be smaller than previously thought and a weak patch in August that set the scene for a rebound across markets.
''Risks remain until we hear exactly what the Fed has in mind.''
The Fed would hold its post-decision press conference at 6.30am on Thursday (NZ time), not long before markets opened in this part of the world, he said.
The Fed was now buying $US85 billion ($NZ103.5 billion) each month. Markets expected that to be ''tapered'' by $US10 billion-$US15 billion a month, the bulk of the reduction likely to come from the treasury bond side of the market.
If the Fed chose to taper by a larger degree, that would surprise the market, as would a greater slant towards mortgage-backed securities rather than treasuries, Mr Timms said.
''Given the Fed will still be printing about $US70 billion a month, this is very much the Fed taking its foot slightly off the gas, rather than applying the brakes.
"However, it nonetheless represents a big turning point and sends a clear message it is moving towards a normalisation policy of interest rates.''
In addition to the amount of tapering, the market would also look at the Fed's updated economic forecasts and forward rate guidance for 2016, which it would forecast for the first time, he said.
In New Zealand, the June GDP - or gross domestic product, which is a measure of output produced in an economy during a period - will be released on Thursday by Statistics New Zealand.
ASB chief economist Nick Tuffley expects June economic activity to have contracted 0.2% over the quarter.
The fall in activity followed subdued growth in the previous quarter, as the effects of the summer drought weighed on the New Zealand economy over the first half of the year.
There was a sharp reduction in milk production as increasingly dry weather led farmers to bring forward livestock slaughter and reduce milk production, he said.
There had also been a fall in livestock slaughter in recent months.
''We expect these factors will be reflected in a drop in dairy production and primary manufacturing activity in the second quarter.''
Partly offsetting the short-term effects of the drought were encouraging signs of strength in the household sector. In particular, retail sales grew strongly in the June quarter, building on the strong gains in the previous six months, Mr Tuffley said.
Stronger housing market activity had underpinned the strength in retail spending as households bought furniture and electronics to furnish their new homes.
Added to that were the wealth effects of higher house prices, which had supported an improvement in household confidence, he said.
''Our forecast of a 0.2% fall in GDP is weaker than what the Reserve Bank expects, despite the central bank indicating it had revised down its September MPS [monetary policy statement] forecast of an increase of 0.4% in GDP, in light of the weaker than expected second quarter data released in the past week.''
A result below the Reserve Bank's expectations was unlikely to be of much concern, given most of the weakness related to the effects of the drought, Mr Tuffley said.
In the September monetary policy statement, Reserve Bank governor Graeme Wheeler again highlighted the recovery in consumption and rebuilding taking place and that it was expected to continue supporting economic growth.
The ASB expected the Reserve Bank to hold the official cash rate at 2.5% until March next year, gradually lifting it to 4% by late 2015.
