Markets Overview

  • ASX SPI 200 futures down 0.3% to 7,212.00
  • Dow Average little changed at 34,624.30
  • Aussie little changed at 0.6437 per US$
  • U.S. 10-year yield fell 2.9bps to 4.3045%
  • Australia 3-year bond yield rose 7.6 bps to 3.91%
  • Australia 10-year bond yield rose 11 bps to 4.21%
  • Gold spot up 0.5% to $1,933.62
  • Brent futures up 0.7% to $94.62/bbl

Economic Events

  • 11:30: (AU) RBA Minutes of Sept. Policy Meeting

Stocks, bonds and the dollar saw small moves at the start of a busy week for major central banks, whose rate decisions will set the tone for global markets for the rest of the year.

The S&P 500 closed near 4,450. Brent oil pared gains after almost hitting $95 a barrel earlier Monday in a move that added to inflation concerns. Apple Inc. climbed, while Tesla Inc. dropped as Goldman Sachs Group Inc. lowered its earnings estimates for the electric-vehicle giant. Treasury 10-year yields edged lower and those on two-year notes remained above 5%.

Starting with the Federal Reserve on Wednesday and ending with the Bank of Japan two days later, monetary policy will be determined at key meetings across half of the Group of 20. Advanced-economy central banks may draw particular focus as global policymakers adapt to the theme US officials set out at Jackson Hole in August: Rates will likely stay higher for longer.

With the Fed widely expected to keep rates on hold this week, traders will be focused on the so-called dot plot summary of economic forecasts. The two main questions are whether policymakers will retain their projections for one more 25 basis-point hike by year-end — and how much easing they are penciling in for 2024. In June, they projected 1 percentage point of cuts.

Other News

Virgin Australia Airlines Pty found a second suspected unapproved plane part from obscure UK supplier AOG Technics Ltd., as the industry continues to hunt down bogus components that have spread across the global fleet.

The Australian airline discovered a seal with false certification documents on an inner high-pressure turbine nozzle on a Boeing Co. 737 jet, according to a person familiar with the matter. The aircraft is under maintenance in Brisbane, where the part is being removed, said the person, asking not to be identified because the matter is confidential.

According to Flight Radar data, the plane in question diverted to Brisbane during a flight from Sydney to Gold Coast early on Sept. 16 and hasn’t flown since.

Bloomberg News reported last week that Virgin Australia had initially found one potentially unapproved part supplied by AOG Technics. According to the person familiar with the investigation, that component — also supplied with fake paperwork — was a low-pressure turbine blade on a different Boeing 737. That aircraft is already back in service.

The discoveries show how the bogus parts have infiltrated planes from the US to Australia. Southwest Airlines Co. has removed two “suspect parts” traced to closely held AOG Technics from one of its Boeing 737s, and engine makers General Electric Co. and Safran SA have sued AOG after finding that parts with falsified certificates had found their way into engines.

“At Virgin Australia, safety is our highest priority and we apply a highly stringent approach to maintenance to ensure our safety standard is upheld,” the airline said last week after the first suspected unapproved part was discovered.

The widening scandal has shaken an industry where safety is the guiding principle, with exacting standards for aircraft manufacturing and maintenance that demands each component be verified.

Parts supplied by AOG went into engines that power many older-generation Airbus SE A320 and Boeing 737 planes, by far the most widely flown category of commercial aircraft. CFM International, the world’s largest jet-engine manufacturer, filed a lawsuit in the UK against AOG Technics. The suit seeks an injunction to force AOG to provide more information to aid the aviation industry’s search for suspect components.