Markets Overview
- ASX SPI 200 futures up 0.5% to 7,387.00
- Dow Average up 0.8% to 34,157.05
- Aussie up 0.7% to 0.6963 per US$
- U.S. 10-year yield fell 2.3bps to 3.7149%
- Australia 3-year bond yield rose 5 bps to 3.47%
- Australia 10-year bond yield rose 5.3 bps to 3.76%
- Gold spot down 0.7% to $1,852.82
- Brent futures little changed at $86.42/bbl
Economic Events
- 10:30: (AU) Feb. Westpac Consumer Conf SA MoM, prior 5.0%
- 10:30: (AU) Feb. Westpac Consumer Conf Index, prior 84.3
- 11:00: (AU) Australia to Sell A$150 Million 2.5% 2030 Linkers
- 11:30: (AU) Jan. NAB Business Conditions, prior 12
- 11:30: (AU) Jan. NAB Business Confidence, prior -1
US stocks ended Monday with broad gains after a survey showing Americans have drastically reduced their expectations for household income growth suggested that Tuesday’s consumer price data might not be as bad as once feared.
The S&P 500 added 1.1%, with every sector save energy in the green. The tech-heavy Nasdaq 100 rose 1.6% following its first weekly loss of 2023. The Dow Jones Industrial Average gained the most since January.
A New York Federal Reserve consumer survey showed that one-year inflation expectations were little changed in January, which was “modestly reassuring” for Vital Knowledge’s Adam Crisafulli.
“The household income piece was positive (for stocks) in that it points to wage disinflation expectations,” he wrote, noting it was the largest one-month drop in the nearly 10-year history of the series.
Oil prices, a key inflation component, fell on a report that the Biden administration plans to sell more crude oil from the Strategic Petroleum Reserve. West Texas Intermediate crude futures dropped below $80 a barrel.
Yet two-year Treasury yields rose to a new high for the year after climbing 23 basis points last week following the much stronger-than-expected January employment data.
Traders are reassessing how high US interest rates will rise this year, with inflation and jobs data looming later this week. This has fueled bets for the Fed rate to peak at 5.2% in July, up from less than 5% a month ago.
Other News
For decades the lowly Robusta coffee bean has been anathema to many American coffee companies. Though less expensive than the cherished Arabica bean, Robusta has a bitter taste that has been likened to burned rubber.
No wonder that Peet’s Coffee notes on its website that Robusta has “never been on the menu,” and that Dunkin doesn’t serve it in the U.S. or most international markets. Starbucks says the bean’s “less refined flavor is absolutely the reason we don’t even touch it.”
A younger generation of coffee geeks, though, thinks the time is ripe for a Robusta reputation reboot. They want to elevate the humble bean from the instant-coffee market to the premium-coffee universe. Old-school coffee snobs are highly dubious.
Nguyen Coffee Supply, a Brooklyn-based importer of coffee from Vietnam, sells Robusta beans and drinks online and in grocery stores around the U.S. Last year it launched the Robusta Pledge, calling on coffee companies to stop positioning Arabica as inherently superior, and to proclaim with pride when they add cheaper Robusta to blends.
More than 100 coffee drinkers and professionals have signed the pledge, including coffee luminaries such as James Freeman, founder of specialty roaster Blue Bottle Coffee. In January, Blue Bottle launched Robusta Blend #1, which the company said has opening tasting notes of dark chocolate, middle notes of raspberry and finishing notes of Scotch.
That’s fancy lingo for Robusta, whose generally bitter, earthy taste has long been scorned by the coffee cognoscenti. Unlike Arabica, which is mainly grown in the highlands of Latin America, Robusta is cultivated at lower elevations, largely in Asian countries such as Vietnam. Robusta plants have much higher yields than Arabica and are naturally pest-resistant, but Robusta growers have tended to invest less in quality because their beans were relegated to low-margin instant coffee.
The revisionist crowd argues that Robusta can be good if grown and processed with the same care as Arabica. They say premium Robustas are nutty and creamy — and lack the rubbery taste that characterizes the cheaper stuff. Even better, Robusta is less than half of the price of Arabica, although for premium beans the prices are closer.
(Wall Street Journal)
