Markets Overview

  • ASX SPI 200 futures up 0.3% to 7,190.00
  • Dow Average down 0.7% to 33,979.33
  • Aussie up 0.4% to 0.6795 per US$
  • U.S. 10-year yield fell 2.7bps to 3.7862%
  • Australia 3-year bond yield rose 8.4 bps to 3.92%
  • Australia 10-year bond yield rose 4.3 bps to 3.97%
  • Gold spot down 0.1% to $1,941.37
  • Brent futures down 1.0% to $73.57/bbl

Economic Events

  • 10:30: (AU) Australia to Sell A$500 Million 70-Day Bills
  • 10:30: (AU) Australia to Sell A$1 Billion 98-Day Bills
  • 11:00: (AU) June Consumer Inflation Expectation, prior 5.2%
  • 11:30: (AU) May Part Time Employment Change, prior 22,800
  • 11:30: (AU) May Full Time Employment Change, prior -27,100
  • 11:30: (AU) May Employment Change, est. 17,500, prior -4,300
  • 11:30: (AU) May Participation Rate, est. 66.7%, prior 66.7%
  • 11:30: (AU) May Unemployment Rate, est. 3.7%, prior 3.7%

Australia’s employment report is likely to show an increase in jobs but not enough to keep up with its expanding pool of workers.

The relentless rally in US stocks lost some traction on Wednesday as the Federal Reserve signaled interest-rate hikes are still on the table after pausing its tightening cycle in June to assess economic conditions.

Following the usual whirlwind of Fed days, the S&P 500 closed with a gain of only 0.1%. The small move drove the gauge to its fifth straight advance, the longest winning run since November 2021. Equities recovered some ground amid a rebound in big tech and as Jerome Powell said no decision has been made for the next few meetings.

Bond traders are nearly wiping out bets that the Fed will lower interest rates this year. Rates on swap contracts referencing future Fed policy meetings reflect a peak rate of about 5.3% in September after the central bank’s decision, while the December contract’s rate jumped to about 5.2%.

The Fed decision left the benchmark federal funds rate in a target range of 5% to 5.25%. Fresh quarterly Fed forecasts showed borrowing costs rising to 5.6% by year end, according to the median projection, compared with 5.1% in the previous round of projections.

Treasury two-year yields, which are more sensitive to imminent Fed moves, climbed two basis points to 4.69%. The dollar remained near a one-month low.

Other News

UBS Group AG initially plans to take on the bulk of Credit Suisse private bankers in Asia Pacific, bringing the total headcount to over 1,200 in one of the few regional business divisions spared from deep cuts.

The move is being driven by global wealth chief Iqbal Khan, who is betting Asia will continue to generate lucrative clients, according to people familiar with the matter. The integration will give UBS more relationship managers in the region than its closest rivals DBS Group Holdings Ltd. and HSBC Holdings Plc combined.

While the plans may help cement UBS’s dominance in one of the world’s fastest-growing wealth markets, they are a departure from the firm’s treatment of its investment bank, which is likely to see widespread cutbacks. UBS executives have told their Credit Suisse colleagues that they prefer selectively bolstering their own investment bank while dumping the riskier operations, Bloomberg reported previously.

The emergency takeover has scuppered Credit Suisse’s plans to spin-off parts of that business under the Credit Suisse First Boston brand, leaving dealmakers at a loose end.

A UBS spokesperson declined to comment.

Switzerland’s largest bank may decide over the next several months whether to retain bankers whose roles overlap in markets including Hong Kong, Singapore and Japan, according to one of the people who asked not to be identified as the details aren’t public. The Swiss bank likely will keep Credit Suisse’s wealth presence in India and Australia, which are what it lacks and covets, said one of the people.

UBS was already the biggest wealth manager in Asia excluding China before it pushed ahead with the acquisition, topping its rivals both in terms of assets under management and headcount, according to Asian Private Banker estimates.

Khan recently recruited banker Young Jin Yee from Deutsche Bank AG, less than six months after she had jumped to the German lender from Credit Suisse.

Private bankers are in high demand in Asia, known for its huge growth potential where competition is fierce as firms including HSBC, Citigroup Inc. and Singapore’s DBS are all expanding.

The combination of the two financial giants begins in earnest now after the formal closing of the takeover on Monday, around three months after the Swiss state orchestrated the $3 billion deal as Credit Suisse headed for collapse. UBS top executives including Chairman Colm Kelleher have made clear that remaining Credit Suisse bankers would be put through a “culture filter” to weed out undesirable practices from the bank.