Markets Overview

  • ASX SPI 200 futures up 0.9% to 7,021.00
  • Dow Average up 0.2% to 34,343.57
  • Aussie up 0.3% to 0.6381 per US$
  • U.S. 10-year yield fell 2.4bps to 4.6280%
  • Australia 3-year bond yield rose 5 bps to 4.29%
  • Australia 10-year bond yield rose 4.9 bps to 4.67%
  • Gold spot up 0.3% to $1,946.34
  • Brent futures up 1.6% to $82.70/bbl

Economic Events

  • 10:30: (AU) Nov. Westpac Consumer Conf SA MoM, prior 2.9%
  • 10:30: (AU) Nov. Westpac Consumer Conf Index, prior 82.0
  • 11:00: (AU) Australia to Sell A$150M 0.25% 2032 Inflation-Linked Bonds
  • 11:30: (AU) Oct. NAB Business Conditions, prior 11
  • 11:30: (AU) Oct. NAB Business Confidence, prior 1

Stocks, bonds and the dollar saw small moves on Monday, with traders awaiting the latest inflation figures, remarks from Federal Reserve speakers and results from giant retailers.

In a thin trading session, the S&P 500 hovered near its key 4,400 mark. The gauge closed little changed after posting nine positive days out of 10 — a level of consistency seen less than 1% of the time this century and last observed in 2021. Treasury 10-year yields dropped below 4.65%. The dollar fell. Oil topped $78 a barrel after notching three straight weeks of losses.

A batch of economic reports this week will help shape the direction of markets after a rally driven by bets interest rates are peaking. With the Fed considered by many to remain on “pause” or “skip” mode for longer, but unlikely to cut rates anytime soon, markets will possibly remain “vulnerable to outbreaks of volatility,” according to John Stoltzfus at Oppenheimer Asset Management.

In the run-up to the consumer-price index report, a survey conducted by 22V Research shows the majority of investors don’t think the inflation measure is on a “Fed-friendly path.” Among those polled, 36% are betting the market reaction will be “risk-off” while 31% see a “risk-on” reaction.

Economists surveyed by Bloomberg expect the data to show CPI slowed to an annual rate of 3.3% in October from 3.7% in September.

Traders betting interest rates are peaking drove the S&P 500 to an almost two-month high last week. In a survey from the American Association of Individual Investors, the proportion of respondents who say they’re optimistic on the stock market jumped by three-quarters, while the ranks of pessimists has plunged. From one weak to the next, the bull-bear spread rose by 41 points, an advance last seen in early 2009.

Strategists at Morgan Stanley expect the yield on 10-year Treasuries to fall below 4% by the end of next year due to a mixture of slowing growth and inflation, alongside the return of bond buyers and rate cuts from the Fed.

Treasury bulls are still prevailing in the latest MLIV Pulse survey, but their majority is getting extremely slim. Those expecting 10-year yields to go down over the next month represented 51% of respondents, a decline from 52% a month earlier, and the peak of 54% in July.

Overall, the majority of 506 survey respondents pointed to bonds as a valuable hedge to stocks volatility, and expressed concerns about the US economy, seeing it heading toward recession.

Other News

The Australia-wide outage that struck Optus last week occurred when incorrect routing information cascaded through the network following a software upgrade, according to the telecommunications company, which said it has made changes so the issue can’t happen again.

Optus, owned by Singapore Telecommunications Ltd., suffered the crash early Wednesday, leaving millions of customers without mobile and internet services, as well as disrupting public transport, health providers and bank transactions. The company faces a government review into the breakdown, little more than a year after it was hit by a major cyberattack.

In a statement Monday, Optus said getting its network back up and running proved to be a lengthy operation, in some cases requiring it to physically reconnect or reboot routers.

The complexity of the repair work partly explains why it took so long for Optus to reconnect customers who were cut off for most of the day. The company was criticized for its lack of communications following the outage.

“Our investigations into the issue took longer than we would have liked as we examined several different paths to restoration,” Optus said in an explanation posted on its website. “We have made changes to the network to address this issue so that it cannot occur again.”

The crash exposed Australia’s modern-day reliance on phone companies for a range of services. Train commuters stranded in Melbourne found themselves unable to call for ride-share services like Uber, while home workers were stuck without a web connection. Westpac Banking Corp. said it was unable to take some calls because of the issue.