Markets Overview

  • ASX SPI 200 futures down 0.3% to 7,117.00
  • Dow Average down 0.5% to 34,765.74
  • Aussie down 0.5% to 0.6424 per US$
  • U.S. 10-year yield rose 3.8bps to 4.2504%
  • Australia 3-year bond yield fell 4.7 bps to 3.91%
  • Australia 10-year bond yield fell 5 bps to 4.21%
  • Gold spot down 0.5% to $1,892.20
  • Brent futures down 1.8% to $83.34/bbl

Economic Events

  • 10:30: (AU) Australia to Sell A$1 Billion 98-Day Bills
  • 10:30: (AU) Australia to Sell A$1 Billion 119-Day Bills
  • 11:30: (AU) July Part Time Employment Change, prior -6,700
  • 11:30: (AU) July Full Time Employment Change, prior 39,300
  • 11:30: (AU) July Employment Change, est. 15,000, prior 32,600
  • 11:30: (AU) July Participation Rate, est. 66.8%, prior 66.8%
  • 11:30: (AU) July Unemployment Rate, est. 3.6%, prior 3.5%

Shares in Asia are primed for declines Thursday after a selloff in US stocks and bonds following hawkish comments in minutes of the Federal Reserve’s last meeting.

Equity futures for benchmarks in Japan, Australia and Hong Kong all declined. The S&P 500 fell 0.8% Wednesday while the Nasdaq 100 dropped 1.1%, with heavyweights Meta Platforms Inc, Inc. and Tesla Inc, down more than 1.5%. US futures were little changed in early Asian trading.

The 10-year Treasury yield touched fresh intraday highs not seen since October, while yields on the policy-sensitive two-year notes inched higher to near 5%. The selling erased gains for the year for an index of US government debt.

Those moves followed minutes from the Fed’s July meeting that fanned concerns the central bank would continue to raise interest rates to quell inflation.

Other News

Australian Prime Minister Anthony Albanese is offering extra cash to state and territory governments that boost housing supply as a surge in immigration and dwindling construction worsen an accommodation squeeze.

Albanese announced A$3 billion ($1.9 billion) in new funding for governments that exceed their home-building targets at a press conference on Wednesday. It was among a suite of measures to tackle housing shortages that emerged from his meeting with the eight state and territory leaders, known as the National Cabinet.

The group agreed to increase Australia’s housing supply target to 1.2 million new homes over five years, beginning July 2024. It’s this target that the states and territories need to beat to access the extra funds. Albanese also announced a plan to improve the rights for the country’s rising cohort of renters.

“We know that there is no simple one-day, one-week, one-month solution to dealing with housing issues,” Albanese told reporters in Brisbane.

The center-left Labor government has been under intensifying pressure to tackle a housing crisis that has seen property prices resume rising despite 12 interest-rate increases. Rents are also soaring as more people turn to rental accommodation, leaving landlords in a strong bargaining position with tenants.

Meantime, the nation’s population has been growing at about 2% since immigration resumed following the end of the pandemic.

Rents across Australia rose by 6.7% on average in the three months through June, according to the Australian Bureau of Statistics, the biggest quarterly increase since 2009. The surging cost of rentals is one of the key contributors to the economy’s elevated inflation in recent times.

In contrast, new dwelling approvals fell 18% year-on-year in June, according to the ABS.

Albanese’s signature housing policy, the Housing Australia Future Fund, is still stuck in the Senate, upper house of parliament, after the Greens party refused to pass it without further action to cap rents.