Markets Overview

  • ASX SPI 200 futures down 0.2% to 6,840.00
  • Dow Average down 0.6% to 32,923.63
  • Aussie up 0.3% to 0.6332 per US$
  • U.S. 10-year yield fell 6.2bps to 4.8523%
  • Australia 3-year bond yield rose 1.1 bps to 4.21%
  • Australia 10-year bond yield rose 3.5 bps to 4.78%
  • Gold spot down 0.4% to $1,973.20
  • Brent futures down 2.1% to $90.24/bbl

Economic Events

  • 09:00: (AU) Oct. Judo Bank Australia PMI Servic, prior 51.8
  • 09:00: (AU) Oct. Judo Bank Australia PMI Compos, prior 51.5
  • 09:00: (AU) Oct. Judo Bank Australia PMI Mfg, prior 48.7
  • 19:00: (AU) RBA’s Bullock-Speech

A renewed bout of volatility in the bond market impacted stock trading, with investors also awaiting earnings from a handful of big techs. Oil sank as Israel appeared to hold off on a broader ground invasion of Gaza.

After several twists and turns, the S&P 500 closed at its lowest since May. The gauge fell for a fifth straight session — its longest slide this year, while holding above the key 4,200 mark. That’s a technical support and represents a 50% retracement of the rally from the lows seen in the March banking turmoil. Treasury 10-year yields slumped after hitting 5%. The dollar fell.

The world’s biggest bond market has faced intense volatility amid expectations the Federal Reserve will keep rates elevated and the government will boost bond sales to cover widening deficits. Exactly how the inter-relationships between growth, interest rates and the Fed are working right now is uncertain, according to Jason Draho, head of asset allocation Americas at UBS Global Wealth Management. That means: Markets are likely to stay choppy until there’s more clarity, he added.

Other News

Microsoft Corp. will invest A$5 billion in Australia to expand its cloud computing and AI infrastructure over the next two years, in what the US company described as its largest investment in the country in four decades.

Announced as part of Prime Minister Anthony Albanese’s visit to the US this week, the investment will help Microsoft grow its data centers across Canberra, Sydney and Melbourne by 45% — from 20 sites up to 29.

In addition, the US technology company will work with the state of New South Wales to establish a Microsoft Datacenter Academy in Australia, while also collaborating with the Australian Signals Directorate intelligence agency on a cybersecurity initiative.

“This is our largest investment in Microsoft’s 40-year history in Australia and a testament to our commitment to the country’s growth and prosperity in the AI era,” Microsoft President Brad Smith said in a statement.

The announcement comes one day after Albanese touched down in the US for a four-day official visit, which will include a state dinner at the White House hosted by President Joe Biden on Wednesday night. Critical minerals and tech innovation are expected to be a major theme of Albanese’s trip.

Both countries have agreed to work more closely on technology and research as part of the second pillar of the Aukus agreement signed in 2021. Under Aukus, the US, the UK and Australia will share information in critical areas such as quantum computing and artificial intelligence.

Albanese described the announcement in a statement as a “major investment in the skills and workers of the future” for Australia. His center-left Labor government has a goal of 1.2 million technology sector jobs in Australia by the year 2030.