Markets Overview

  • ASX SPI 200 futures down 0.5% to 7,048.00
  • Dow Average down 0.5% to 33,507.50
  • Aussie little changed at 0.6433 per US$
  • U.S. 10-year yield little changed at 4.5711%
  • Australia 3-year bond yield fell 2.5 bps to 4.08%
  • Australia 10-year bond yield rose 3 bps to 4.49%
  • Gold spot down 0.9% to $1,848.63
  • Brent futures down 0.1% to $95.31/bbl

Economic Events

  • 09:00: (AU) Sept. Judo Bank Australia PMI Mfg, prior 48.2
  • 11:00: (AU) Sept. Melbourne Institute Inflation, prior 6.1%
  • 11:00: (AU) Sept. Melbourne Institute Inflation, prior 0.2%

Asian equities look poised for a weak open as investors contend with the prospect of global interest rates staying at their highest levels in decades.

Futures for Japanese shares slipped 0.2%, while those for Australia dropped 0.5%. Contracts for Hong Kong and mainland Chinese stocks both fell at least 0.6%. The dollar opened mixed. A number of Australian states, including New South Wales, are shut Monday for holidays.

US stocks declined 0.3% Friday amid concern over a possible shutdown of the US government. While markets may take some early relief from a last-minute spending deal, attention will quickly shift to US manufacturing activity and jobs data this week after the head of the Federal Reserve Bank of New York said Friday policy makers should leave interest rates high for some time.

Other News

Australian home prices stayed strong in September, driven by soaring demand and outweighing the impact of the central bank’s aggressive policy tightening campaign.

Sydney prices, the national bellwether, advanced 1%, down slightly from the previous month, property consultancy CoreLogic Inc. said in a report Monday. Adelaide led September’s gains  — climbing 1.7%.

In the more expensive cities — Sydney and Melbourne — the broad middle of the market is recording the highest growth rate after previously being led by the upper quartile, CoreLogic said. Regional markets continue to lag capitals.

“Possibly we are starting to see renewed affordability challenges deflecting more demand towards the middle of the market where barriers to entry are lower,” said Tim Lawless, research director at CoreLogic.

The Reserve Bank has raised borrowing costs by 4 percentage points since May last year to take the cash rate to its highest level in over 11 years. The unexpected recovery in the property market is a potential worry for policymakers as households feeling wealthier are more likely to spend, adding to inflation pressures.

Despite the RBA’s concerns about housing, the bank is expected to leave policy unchanged for a third straight meeting this week as it assesses the impact of its tightening to-date.