- ASX SPI 200 futures down 0.9% to 6,846.00
- Dow Average down 0.9% to 33,127.28
- Aussie down 0.2% to 0.6315 per US$
- U.S. 10-year yield fell 7.5bps to 4.9137%
- Australia 3-year bond yield fell 3.2 bps to 4.20%
- Australia 10-year bond yield fell 3.7 bps to 4.75%
- Gold spot up 0.4% to $1,981.40
- Brent futures down 0.2% to $92.16/bbl
Stocks fell around the world, while bonds climbed with gold on concern the Israel-Hamas war will escalate into a wider conflict in the Middle East. Oil pulled back after hitting $90 a barrel.
The S&P 500 dropped over 1%, notching its worst week in a month. The gauge breached its 200-day moving average — seen by some chartists as a bearish signal.
Traders continued to seek haven amid the latest geopolitical developments. Treasury yields pared weekly increases that pushed the 10-year rate to almost 5%. Gold edged closer to $2,000 an ounce.
Australian Prime Minister Anthony Albanese touches down in Washington on Monday to kick off a month of critical diplomatic engagements that will see him travel to the White House, a tiny South Pacific nation and the halls of power in Beijing.
Albanese, having taken office less than 18 months ago, will be in the US from Oct. 23-26, accompanied by a delegation of Australian business leaders. He will meet with President Joe Biden and attend a state dinner — becoming just the fourth Australian leader to be accorded such an honor.
The trip is the first of several by Albanese over the coming month. The prime minister will head to Beijing from Nov. 4-7 — the first visit by an Australian leader in seven years — and meet with Chinese President Xi Jinping and Premier Li Qiang.
He will then be at the Pacific Island Forum in the Cook Islands, before returning to the US for the APEC summit in San Francisco.
There has been a significant easing in tensions between Australia and China since Albanese’s election. Ministerial-level talks between the two have restarted and a number of trade sanctions on Australian products have been lifted.
“Inevitably with a close ally that’s trying to repair relations with Beijing, I think the US will want to project Australia as still a stalwart ally that’s in the US and Western camp,” said Euan Graham, a senior analyst at the Australian Strategic Policy Institute. “The job for Albanese is to thread that needle.”
The US visit will focus on “building an alliance for the future,” Albanese told parliament on Thursday, adding that strengthening the partnership with the US on critical minerals and green energy will also be on the agenda for the Washington trip. The US and Australia have been allies for about 70 years and have fought together in pretty much every conflict the US has been involved in since World War II.
The pomp of the US visit is a gesture of friendship from Biden to make up for his last-minute cancellation of a trip to Australia earlier this year when the president was forced to return to the US to take charge of debt ceiling negotiations in Washington.
It’s also an indication of Australia’s rising importance to the White House’s Indo-Pacific agenda. The other two White House state dinners this year have also been accorded to other key Asian partners: the leaders of South Korea and India.
Albanese’s US state dinner follows a similar honor accorded to his predecessor Scott Morrison in 2019 by then-President Donald Trump. The visit will be the ninth time that Albanese and Biden have met since the Australian leader won a May 2022 election.
Traveling abroad may also be an escape for the prime minister from domestic political woes. Albanese’s signature plan to enshrine Indigenous Australians in the constitution by establishing a Voice to Parliament was resoundingly defeated at an Oct. 14 vote.
“For a politician who’s not naturally drawn to the foreign policy stage, maybe he will see this in political terms as a way to reset the agenda,” Graham said.
Albanese’s two trips, first to Canberra’s closest security partner and then to Australia’s largest trading partner, will test the prime minister’s ambition to reinforce already strong ties with the US, while stabilizing previously chilly relations with China.
The trip will also carry great symbolism for Beijing and Canberra as it will be the 50th anniversary of then-Labor Prime Minister Gough Whitlam’s historic visit to China in 1973, the first by an Australian leader.
“Being led down into the Great Hall of the People to meet Xi Jinping is an intimidating experience,” Graham said. “It will be a test of Albanese’s foreign policy credentials that he doesn’t allow to optically get the better of Australia.”
In a speech in Singapore in June, Albanese presented Australia as a middle power ready to act as a broker between Beijing, Washington and the Asia Pacific region. “I can assure you, that when Australia looks north, we don’t see a void for others to impose their will,” he said at the time.