Markets Overview

  • ASX SPI 200 futures up 0.1% to 6,863.00
  • Dow Average down 0.3% to 32,750.72
  • Aussie down 0.2% to 0.6395 per US$
  • U.S. 10-year yield rose 6.1bps to 4.0748%
  • Australia 3-year bond yield rose 1 bp to 3.29%
  • Australia 10-year bond yield rose 2 bps to 3.76%
  • Gold spot down 0.8% to $1,632.06
  • Brent futures down 1.0% to $94.83/bbl

Economic Events

  • 09:00: (AU) Oct. S&P Global Australia PMI Mfg, prior 52.8
  • 14:30: (AU) Nov. RBA Cash Rate Target, est. 2.85%, prior 2.60%
  • 16:30: (AU) Oct. Commodity Index AUD, prior 152.6
  • 16:30: (AU) Oct. Commodity Index SDR YoY, prior 30.6%
  • 19:20: (AU) RBA’s Lowe-Speech

Stocks pared their monthly surge as bond yields climbed, with investors awaiting Wednesday’s Federal Reserve decision for clues on whether officials will dial back the pace of rate hikes as early as December.

A selloff in bonds across the curve sent two-year US yields to around 4.5%. Swap markets are pricing in a 75-basis-point hike this week amid the Fed’s most-aggressive tightening campaign in four decades. The outlook for the following meetings is less certain, with traders seeing a “coin toss” between an increase of that size and a 50-basis-point boost in the final month of 2022.

JPMorgan Chase & Co.’s Marko Kolanovic is joining strategists who believe the aggressive hiking is nearing an end. The US will likely raise rates by 50 basis points in December and pause after one more 25-basis-point hike in the first quarter, he said. Indicators such as the inversion of the yield curve between 10-year and three-month Treasuries “all support a Fed pivot sooner rather than later,” wrote Morgan Stanley’s Michael Wilson.

Other News

As if the Brooklyn Nets’ 1-5 start to the NBA season isn’t ugly enough, one highlight reel is encapsulating the early season woes in comic fashion.

Nets forward Yuta Watanabe went skying for a rebound in first quarter action of Saturday’s 125-116 loss to the Indiana Pacers, trying to out-muscle Pacers players James Johnson and Goga Bitadze.

After Pacers guard Andrew Nembhard’s missed jumper ricocheted off the rim, Watanabe was unable to corral the ball and his plunging momentum actually led him to score in the Pacers’ basket. Normally when a basket is scored by accident like this, it’s not a dunk. Just like that, though, the 6-8 forward scored two points for his opponent.