Markets Overview

  • ASX SPI 200 futures down 0.4% to 7,072.00
  • Dow Average down 0.8% to 32,920.46
  • Aussie up 0.1% to 0.6713 per US$
  • U.S. 10-year yield rose 3.9bps to 3.4822%
  • Australia 3-year bond yield fell 0.7 bps to 3.14%
  • Australia 10-year bond yield little changed at 3.46%
  • Gold spot up 0.9% to $1,793.08
  • Brent futures down 2.7% to $79.04/bbl

Economic Events

The dollar weakened slightly against most major currencies and the yen rallied, boosted by a report that the Japanese prime minister may consider allowing more flexibility in the monetary regime that has kept the nation’s interest rates at rock-bottom levels.

The risk of higher interest rates pushing the US into recession in 2023 is casting a pall over trading that’s winding down into year end. Meanwhile, China’s pivot from Covid Zero raises the prospect of growth from economic reopening — along with the risk from a surge of new infections. The number of Covid-positive dead arriving at Beijing’s funeral parlors and crematoriums is increasing, according to media reports.

Government bond yields rose slightly in Australia and New Zealand on Monday after US Treasuries were mixed Friday, when short-term bonds rallied while the 10-year maturity fell. The policy-sensitive two-year Treasury yield ended the week 17 basis points lower than where it started.

Investors had cheered the softer-than-expected US inflation data but that euphoria faded as Fed officials hammered home the message that rates would go higher for longer until they’re confident inflation has been subdued. A wave of rate hikes and hawkish outlooks from central banks across the globe, including the European Central Bank, further bruised sentiment last week.

Other News

The world’s largest freestanding cylindrical aquarium exploded in the early hours of the Berlin morning, spilling about 1 million liters of salt water and 1,500 fish into the hotel lobby where it was located.

Images shared by tourists and emergency crews showed shards of the cylinder, which measured 16 meters (52 feet) tall, filling the entrance hall of the Radisson Collection hotel, located near Berlin’s main cathedral and the Alexanderplatz square in the eastern part of the German capital.

The force of the cascading water blew out the front doors of the building, spilling debris into the street, and was strong enough to register on seismic measuring equipment. Two people are being treated for injuries, while the cause of the incident, which happened at 5:45 a.m., is being examined.
The so-called AquaDom was the largest aquarium of its kind and featured a glass elevator that allowed visitors to ascend through the 11-meter diameter cylinder and admire the 100 different species of sea creature it contained.

The construction, first opened in 2005 and elaborately renovated a few years ago, was operated by Sea Life Aquarium as part of a larger marine exhibition space nearby.