Markets Overview

  • ASX SPI 200 futures down 0.3% to 6,883.00
  • Dow Average down 0.1% to 32,798.40
  • Aussie up 0.6% to 0.7026 per US$
  • U.S. 10-year yield fell 7.2bps to 2.5768%
  • Australia 3-year bond yield little changed at 2.66%
  • Australia 10-year bond yield little changed at 3.06%
  • Gold spot up 0.3% to $1,772.11
  • Brent futures down 3.7% to $100.14/bbl

Economic Events

  • 11:30: (AU) June Investor Loan Value MoM, est. -4.5%, prior 0.9%
  • 11:30: (AU) June Owner-Occupier Loan Value MoM, est. -3.0%, prior 2.1%
  • 11:30: (AU) June Home Loans Value MoM, est. -3.0%, prior 1.7%
  • 11:30: (AU) June Private Sector Houses MoM, prior -2.7%
  • 11:30: (AU) June Building Approvals MoM, est. -5.0%, prior 9.9%
  • 14:30: (AU) Aug. RBA Cash Rate Target, est. 1.85%, prior 1.35%
  • 16:30: (AU) July Commodity Index AUD, prior 157.7
  • 16:30: (AU) July Commodity Index SDR YoY, prior 24.3%

Stocks in Asia face challenging conditions on Tuesday amid escalating US-China tension over Taiwan and deepening worries about a global economic slowdown, risks that are also driving a jump in bonds.

Futures pointed to muted starts in Japan and Australia and were more than 1% lower for Hong Kong. S&P 500 and Nasdaq 100 contracts wavered after July’s stock market rebound stumbled into August.

US House Speaker Nancy Pelosi is expected to visit Taiwan on Tuesday. She would become become the highest-ranking American politician to visit the island in 25 years. China views Taiwan as its territory and has warned of consequences if the trip takes place.

The offshore yuan and Chinese shares traded in the US retreated as reports of the likely visit emerged on Monday. Non-deliverable forwards on the Taiwanese dollar signaled a weakening of the island’s currency.

Treasuries climbed, lowering the 10-year yield to 2.57%, and the dollar fell. Bonds globally pushed higher in the slipstream of data suggesting factory output is shrinking or cooling in key economies alongside moderating input prices.

The evident demand slowdown sapped oil, leaving it around $94 a barrel. Oilseed and grain futures fell after the first grain ship since Russia’s invasion left Ukraine, heralding some relief for a tight global food market.

Other News

A passenger traveling from Bali, Indonesia to Australia has found themselves paying a hefty price for a McDonald’s breakfast.

The unnamed traveler was handed a fine of 2,664 Australian dollars ($1,874) after two undeclared egg and beef sausage McMuffins and a ham croissant were found in their luggage on arriving at Darwin Airport in the country’s Northern Territory last week.

The incident came about days after Australian authorities brought in tough new biosecurity rules after a Foot and Mouth disease (FMD) outbreak in Indonesia spread to Bali, a popular destination for Australian tourists.

Australia’s Department of Agriculture, Fisheries and Forestry said a “range of undeclared risk products,” including the fast food items, were detected in the passenger’s rucksack by a biosecurity detector dog named Zinta.

“This will be the most expensive Maccas meal this passenger ever has,” Murray Watt, minister for agriculture, fisheries and forestry, said in a statement.

“This fine is twice the cost of an airfare to Bali, but I have no sympathy for people who choose to disobey Australia’s strict biosecurity measures, and recent detections show you will be caught.”

The statement went on to confirm that the passenger had been issued with “a 12-unit infringement notice for failing to declare potential high biosecurity risk items and providing a false and misleading document.” The seized products are to be tested for foot and mouth disease before being destroyed.

“Australia is FMD-free, and we want it to stay that way,” added Watt.

Last month, the federal executive government of Australia announced a $9.8 million biosecurity package, with new measures introduced across the country’s borders, including sanitation foot mats at all international airports and biosecurity dogs stationed at both Darwin and Cairns Airport, after the highly contagious disease began spreading through cattle in Indonesia.

Experts estimate that an outbreak in Australia could bring about an economic hit of up to $80 billion.