Markets Overview

  • ASX SPI 200 futures down 0.2% to 7,089.00
  • Dow Average down 0.4% to 32,908.27
  • Aussie down 0.2% to 0.6504 per US$
  • U.S. 10-year yield fell 4.1bps to 3.6445%
  • Australia 3-year bond yield fell 6.3 bps to 3.37%
  • Australia 10-year bond yield fell 7.5 bps to 3.61%
  • Gold spot up 0.2% to $1,962.61
  • Brent futures down 1.2% to $72.66/bbl

Economic Events

  • 09:00: (AU) May Judo Bank Australia PMI Mfg, prior 48.0
  • 10:30: (AU) Australia to Sell A$1 Billion 98-Day Bills
  • 11:30: (AU) 1Q Private Capital Expenditure, est. 1.0%, prior 2.2%

Stock traders trying to climb a wall of worry saw the American equity benchmark struggling to keep its monthly gain in the final trading session of May.

Not even remarks from some Federal Reserve officials hinting at a potential pause in interest-rate hikes in June were able to put the S&P 500 back in the green on Wednesday. Concerns about the global economy resurfaced, a slide in regional banks raised some eyebrows and the furious rally in big tech took a breather — with Nvidia Corp. down over 5.5% after nearly tripling in value this year.

Just a few days after the S&P 500 broke above 4,200, the measure closed below the key level once again. Wednesday’s losses reduced the index’s advance in May to 0.3%. That compares with a rally of 7.6% for the Nasdaq 100, which enjoyed its longest monthly winning streak since December 2021, and the 17% surge in a gauge of megacaps like Tesla Inc. and Apple Inc.

Traders also watched the latest developments in the US debt-ceiling saga. The deal struck by House Speaker Kevin McCarthy and President Joe Biden cleared a major hurdle in the House, lining the compromise legislation up for passage Wednesday night as the US quickly approaches a June 5 deadline to avert a default.

Other News

The Australian government is doubling down on its policy of greater trade diversification despite increasingly warm economic ties with China.

“More trade, not less, is a key part of how we build the secure and stable economic future we want,” Trade Minister Don Farrell will say in his speech to the National Press Club in Canberra on Thursday marking his one year in office.

Australia has learned “valuable lessons over the last few years,” according to excerpts of the remarks released to the media Wednesday, showing that Farrell will urge Australian businesses to push forward with their “diversification plans.”

Twelve months ago, the center-left government “inherited a raft of fractured relationships with key trading partners,” and since then has worked hard to advance the country’s trade and investment agenda and “to diversify our trading relationships,” according to Farrell.

China is Australia’s largest trading partner but the relationship became strained and trade sanctions were placed on a range of Australian exports in 2020. Ties between Canberra and Beijing have improved since the Labor government was elected a year ago, with coal and timber shipments resuming.

Farrell told Bloomberg in an interview in Detroit on Saturday that he was hoping for an end to the barley tariffs in the coming months. The Australian government is also hopeful a similar review process could help ease restrictions on wine exports to China, although the country’s vintners have expanded in other markets since Beijing imposed the steep tariffs three years ago.

As trade diversification is the “central plank” of the Labor government’s agenda, Australia is on the brink of finalizing a free-trade agreement with the European Union, as well as negotiating a broader trade deal with India.