Markets Overview

  • ASX SPI 200 futures down 0.4% to 7,433.00
  • Dow Average down 0.5% to 33,990.11
  • Aussie down 0.5% to 0.6926 per US$
  • U.S. 10-year yield fell 2.2bps to 3.6528%
  • Australia 3-year bond yield rose 2.2 bps to 3.28%
  • Australia 10-year bond yield rose 1.8 bps to 3.61%
  • Gold spot up 0.2% to $1,876.33
  • Brent futures up 1.7% to $85.14/bbl

Economic Events

10:30: (AU) Australia to Sell A$500 Million 91-Day Bills
10:30: (AU) Australia to Sell A$1 Billion 119-Day Bills
10:30: (AU) Australia to Sell A$500 Million 147-Day Bills

A selloff in tech stocks weighed heavily on trading Wednesday, with the most-recent string of Federal Reserve speakers reinforcing the idea that interest rates will need to keep climbing to quash inflation.

Their tone was clearly intended to catch the market’s attention in what looked like a concerted effort to push back against the dovish read of Jerome Powell’s interview Tuesday, noted Krishna Guha at Evercore ISI. From Fed Bank of New York President John Williams to his Minneapolis counterpart Neel Kashkari and Governor Christopher Waller, the message was clear: policy may need to be tight for a while.

Those remarks just gave credence to the recent hot trade in the rate-options market — where several big wagers on the Fed’s benchmark reaching 6% have popped up. That’s nearly a percentage point higher than consensus. For several market observers, such hawkish positioning makes it tough for equities to keep grinding higher — especially after the rally that brought the S&P 500 to overbought territory.

The S&P 500 fell over 1%, almost wiping out its Tuesday’s rally. The Nasdaq 100 underperformed, with Google’s parent Alphabet Inc. down more than 7% on concern that its new artificial intelligence chatbot Bard may yield inaccurate responses. Some other megacaps like Apple Inc. and Inc. also slumped, while Microsoft Corp.’s erased gains that briefly put the software giant’s market value above $2 trillion.

Other News

Top coal exporter Australia has blocked a major mine proposed near the Great Barrier Reef under environmental laws.

Environment Minister Tanya Plibersek announced her final decision on the Central Queensland Coal Project on Twitter on Wednesday, saying in a video that she had received more than 9,000 public submissions on the mine in just 10 business days.

It is the first time that an Australian minister has rejected a proposed coal mine under the country’s Environment Protection and Biodiversity Conservation Act. That marks a major turnaround for Australia, long seen as a global climate laggard and one of the world’s biggest per-capita polluters because of its huge coal and natural gas export industries.

“I’ve decided that the adverse environmental impacts are simply too great,” Plibersek said in her Twitter message. “The mine is an open cut coal mine less than 10 kilometers (6 miles) from the Great Barrier Reef and the risk of pollution and irreversible damage to the Reef is very real.”

Coal is Australia’s biggest export after iron ore and the proposed mine was among a raft of projects that would significantly increase emissions in the nation.

Central Queensland Coal proposed extracting as much as 10 million tons of thermal and coking coal a year over a lifespan of about 24 years, according to the Queensland government. The project is owned by Clive Palmer, a vocal businessman who’s used his mining sector fortune to make forays into politics.

Australia is the world’s biggest exporter of metallurgical coal and only trails Indonesia in shipments of thermal coal. The center-left Labor government elected in May has been attempting to step up Australia’s action on climate change, pledging to reduce emissions by 43% by 2030 from 2005 levels.