Markets Overview

  • ASX SPI 200 futures up 0.4% to 7,030.00
  • Dow Average up 0.5% to 33,591.14
  • Aussie up 0.4% to 0.6413 per US$
  • U.S. 10-year yield little changed at 4.8009%
  • Australia 3-year bond yield fell 4.8 bps to 3.95%
  • Australia 10-year bond yield fell 2.1 bps to 4.52%
  • Gold spot up 1.6% to $1,862.85
  • Brent futures up 4.2% to $88.12/bbl

Economic Events

  • 10:30: (AU) Oct. Westpac Consumer Conf SA MoM, prior -1.5%
  • 10:30: (AU) Oct. Westpac Consumer Conf Index, prior 79.7
  • 11:00: (AU) Australia to Sell A$100 Million 2% 2035 Linkers
  • 11:30: (AU) Sept. NAB Business Confidence, prior 2
  • 11:30: (AU) Sept. NAB Business Conditions, prior 13

Stocks rose as remarks from Federal Reserve officials bolstered bets officials will refrain from lifting rates this year. Oil climbed after Hamas’ attack on Israel raised fears of a wider conflict.

The S&P 500 erased losses as Fed Vice Chair Philip Jefferson said officials are in a position to “proceed carefully” after the recent rise in Treasury yields. Earlier in the day, Fed Bank of Dallas President Lorie Logan said the recent surge in long-term US bond rates may mean less need for the central bank to tighten again. The dollar edged lower. Treasury futures climbed, with the cash market closed for Columbus Day.

“The script has changed,” said Andrew Brenner at NatAlliance Securities. “The odds for another tightening have dropped dramatically since Friday.”

At the end of last week, traders had boosted bets on another Fed hike this year as data showed US employment unexpectedly surged in September.

Energy companies led gains in the S&P 500 as US crude futures briefly topped $87 a barrel. Exxon Mobil Corp. and Chevron Corp. added over 2.7%. Defense companies rallied, with Northrop Grumman Corp. up the most since March 2020 and Lockheed Martin Corp. gaining 8.9%.

Israeli companies Teva Pharmaceutical Industries Ltd. and Check Point Software Technologies Ltd. slipped in US trading. The shekel dropped even after the central bank unveiled a $45 billion support program. Gas prices in Europe soared.

Other News

Winning public support to install 10,000 kilometers of new power transmission lines in Australia is a key challenge for a shift to renewables, according to the country’s energy market operator.

The rush to shutter aging coal-fired power plants and replace them with renewable generation assets is already putting pressure on electricity infrastructure and upgrades are needed, Daniel Westerman, chief executive officer of the Australian Energy Market Operator, said Monday in a speech.

Prime Minister Anthony Albanese’s A$20 billion program to modernize Australia’s grid to enable greater use of clean energy sources will require a major effort to win the community’s consent, he said. That strategy is based on AEMO’s forecasts that the country’s energy transition will require 10,000 kilometers of new transmission lines by 2050.

“We know there are sections of communities in the proposed path of overhead transmission lines that are worried about the effect on their lives and livelihoods, especially among farming communities,” Westerman said.

The operator, which manages Australia’s main energy market, is also preparing to handle forecast record high generation from rooftop solar during the southern hemisphere summer.

Australia now has about 3.5 million solar systems installed with about 20 gigawatts of potential output — equivalent to seven times the capacity of the nation’s largest coal plant, according to Westerman. Oversupply from rooftops “can cause the grid to lose balance and lead to serious consequences,” he said.