Markets Overview

  • ASX SPI 200 futures down 1.4% to 6,964.00
  • Dow Average down 0.3% to 33,421.16
  • Aussie down 1.1% to 0.6366 per US$
  • U.S. 10-year yield rose 11.4bps to 4.6847%
  • Australia 3-year bond yield little changed at 4.08%
  • Australia 10-year bond yield little changed at 4.49%
  • Gold spot down 1.0% to $1,829.46
  • Brent futures down 1.8% to $90.56/bbl

Economic Events

  • 11:30: (AU) Aug. Home Loans Value MoM, est. 0.2%, prior -1.2%
  • 11:30: (AU) Aug. Owner-Occupier Loan Value MoM, prior -1.9%
  • 11:30: (AU) Aug. Investor Loan Value MoM, prior -0.1%
  • 11:30: (AU) Sept. ANZ-Indeed Job Advertisements , prior 1.9%
  • 11:30: (AU) Aug. Building Approvals MoM, est. 2.5%, prior -8.1%
  • 11:30: (AU) Aug. Private Sector Houses MoM, prior 0.1%
  • 14:30: (AU) Oct. RBA Cash Rate Target, est. 4.10%, prior 4.10%

The rout in Treasuries intensified Monday and US stocks struggled as traders digested messaging that the Federal Reserve needs to leave borrowing costs high to rein in inflation.

Yields on five-year to 30-year Treasuries rose 10 basis points on the day. The rate on the 10-year benchmark bond hit the highest since 2007, reaching 4.7%, while the 30-year topped 4.81%, the highest since 2010.

Other News

The number of Australians with pension balances worth more than A$100 million has ballooned over 50% in a year, new data show, as the government prepares to introduce a draft bill to raise taxes for large accounts.

Twenty-eight accounts had balances of more than A$100 million in the 2020-21 financial year compared with 17 the previous financial year, according to analysis of Australian Tax Office figures released Monday. Accounts with balances of more than A$50 million rose to 107 from 78 during the same period.

The average pension account — known locally as superannuation — is A$170,000 according to 2020-21 figures, up from A$150,000 a year earlier. The vast majority of Australians have superannuation balances below A$200,000, the government said.

The government will release draft legislation on Tuesday to double the tax rate for earnings on account balances of A$3 million and above, taking it to 30% from the current rate of 15%. The changes will take place from 2025-26 and will impact 0.5% of people, the government said.

In February, Treasurer Jim Chalmers said the change to the concessional rate would affect around 80,000 people and should generate about A$2 billion of revenue in its first full year. At the time, Prime Minister Anthony Albanese said there is one person in Australia with a pension balance of more than A$400 million.

“Everyone will continue to receive super tax breaks under this change – they will just be slightly less generous for the small number of people with super balances of more than A$3 million,” Chalmers said in an emailed statement Monday.

Australia’s fast-growing superannuation industry is now worth A$3.5 trillion, and is raking in record inflows. Employers contribute 11% of workers’ wages under the compulsory system, which is set to be lifted to 12% by 2025. Concerns persist around equality in the system, including women on average retiring with lower balances than men.