Markets Overview

  • ASX SPI 200 futures down 0.2% to 7,266.00
  • Dow Average down 0.6% to 34,641.97
  • Aussie down 1.3% to 0.6378 per US$
  • U.S. 10-year yield rose 8.4bps to 4.2598%
  • Australia 3-year bond yield rose 0.9 bps to 3.81%
  • Australia 10-year bond yield rose 4.5 bps to 4.14%
  • Gold spot down 0.9% to $1,926.08
  • Brent futures up 1.1% to $90.01/bbl

Economic Events

  • 11:00: (AU) Australia to Sell A$700 Million 3.5% 2034 Bonds
  • 11:30: (AU) 2Q GDP YoY, est. 1.8%, prior 2.3%
  • 11:30: (AU) 2Q GDP SA QoQ, est. 0.4%, prior 0.2%

Treasuries sank as a handful of companies flooded the market with billions of dollars in debt sales before this month’s key economic data and the Federal Reserve’s rate decision. Stocks fell and the dollar hit the highest since March as a rally in oil added to concern about inflation.

Bonds were hit across the US curve, with 10-year yields approaching 4.3%. At least 40 businesses tapped high-grade markets around the world Tuesday, following a seasonal slowdown and the recent surge in Treasury rates. About half of those deals — or over $36 billion of new bonds — were sold in the US, making it the busiest session in terms of deal count and daily supply so far this year, according to data compiled by Bloomberg.

The S&P 500 ended below 4,500, an index of small caps slid about 2% and gauge of homebuilders sank 5.5%. Tesla Inc. led gains in megacaps. United Airlines Holdings Inc. dropped after a temporary grounding of its aircraft nationwide. Pipeline operator Enbridge Inc. agreed to buy three natural gas utilities from Dominion Energy Inc. for $9.4 billion. Brent oil rose above $90 a barrel for the first time since November as the largest OPEC+ producers extended their supply cuts to year-end.

Fed Governor Christopher Waller said policymakers can afford to “proceed carefully” with tightening given recent data showing inflation continuing to ease. “There is nothing that is saying we need to do anything imminent anytime soon,” Waller told CNBC. Meantime, Fed Bank of Cleveland President Loretta Mester said the central bank may need to raise rates “a bit higher,” but stopped short of saying what officials should do at their next meeting.

Other News

In a statement after the September policy meeting on Tuesday, Reserve Bank of Australia Governor Philip Lowe said:

“Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will continue to depend upon the data and the evolving assessment of risks. In making its decisions, the Board will continue to pay close attention to developments in the global economy, trends in household spending, and the outlook for inflation and the labour market. The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.”