Markets Overview

  • ASX SPI 200 futures down 1.1% to 7,085.00
  • Dow Average down 2.2% to 33,208.21
  • Aussie down 2.4% to 0.6701 per US$
  • U.S. 10-year yield fell 2.9bps to 3.4500%
  • Australia 3-year bond yield rose 7.7 bps to 3.15%
  • Australia 10-year bond yield rose 9.1 bps to 3.46%
  • Gold spot down 1.7% to $1,777.47
  • Brent futures down 1.8% to $81.24/bbl

Economic Events

  • 09:00: (AU) Dec. S&P Global Australia PMI Services, prior 47.6
  • 09:00: (AU) Dec. S&P Global Australia PMI Composite, prior 48.0
  • 09:00: (AU) Dec. S&P Global Australia PMI Manufacturing, prior 51.3

The S&P 500 fell more than 2%, closing at its lowest level in more than a month. The tech-heavy Nasdaq 100’s losses exceeded 3%, with yield-sensitive stocks taking a hit. Equities in Europe also closed Thursday lower after the ECB’s upward revision to 2024 inflation projections.

Risk assets have been on the back foot since Fed Chair Jerome Powell reiterated his hawkish stance on Wednesday and policymakers signaled a peak rate that was above market expectations. The ECB and the Bank of England were among major central banks that followed the Fed with hikes of half a percentage point. But the BOE tempering its pace of monetary tightening was interpreted as a sign that rates could peak at a lower level than expected, which pushed the pound to its worst day versus the dollar in six weeks.

While the Fed and ECB also slowed the tempo of their hikes, Powell and ECB President Christine Lagarde hammered home their resolve to remain persistent as they battle inflation. This didn’t sit well with investors, who hoped for a dovish shift in tone.

Traders also digested a bevy of US data Thursday showing the economy cooling, even as the labor market stays strong. Softening in the labor market remains a big target for the Fed.


Other News

The Grinch came early for an Arizona driver who tried to pass off an inflatable figure of the Dr. Seuss character as a passenger.

The Arizona Department of Public Safety says a state trooper last week noticed a car in a high-occupancy vehicle lane on Interstate 10 in Phoenix with a “Seusspicious-looking” green passenger.

While the gag may have caused the officer’s heart to grow, it did not stop the driver from getting cited for being in the HOV lane during a restricted time.
The agency, however, could not help but post a photo of the Grinch figure with the driver’s face blurred on its Twitter account.

Officials say they appreciate the “festive flair” but that the driver’s action was still illegal.