Markets Overview

  • ASX SPI 200 futures up 0.9% to 7,154.00
  • Dow Average up 0.8% to 36,245.50
  • Aussie up 1.0% to 0.6670 per US$
  • U.S. 10-year yield fell 13.1bps to 4.1956%
  • Australia 3-year bond yield rose 5.8 bps to 4.07%
  • Australia 10-year bond yield rose 8.1 bps to 4.49%
  • Gold spot up 1.8% to $2,072.22
  • Brent futures down 2.4% to $78.88/bbl

Economic Events

  • 11:00: (AU) Nov. Melbourne Institute Inflation, prior 5.1%
  • 11:00: (AU) Nov. Melbourne Institute Inflation, prior -0.1%
  • 11:30: (AU) 3Q Company Operating Profit QoQ, est. 1.2%, prior -13.1%
  • 11:30: (AU) Oct. Investor Loan Value MoM, prior 2.0%
  • 11:30: (AU) Oct. Owner-Occupier Loan Value MoM, prior -0.1%
  • 11:30: (AU) Oct. Home Loans Value MoM, est. 1.1%, prior 0.6%
  • 11:30: (AU) Nov. ANZ-Indeed Job Advertisements , prior -3.0%
  • 11:30: (AU) 3Q Inventories SA QoQ, est. -0.8%, prior -1.9%

Wall Street turned a blind eye on Jerome Powell’s attempt to curb bets on rate cuts, with stocks and bonds climbing on speculation the Federal Reserve will stay put this month and ease policy in 2024.

While the Fed chief said officials are ready to tighten further if needed, he also noted policy is “well into restrictive territory.” Two-year yields fell 11 basis points to 4.57%. The S&P 500 rebounded, heading for a fifth week of gains. The dollar slid. Trader bets on a quarter-point Fed cut in March have risen to more likely than not, with swaps fully pricing in a reduction in May. They see more than a full point of easing by December 2024.

Elsewhere, oil dropped amid expectations that the OPEC+ output cuts announced Thursday would do little to tighten the market. Copper rallied after comments by Powell and the looming shutdown of a large mine in Panama emboldened bulls.

Other News

Australia’s supermarket chains will be forced to answer an inquiry by the nation’s senate regarding their profits, as the rising cost of living becomes a political issue.

Chief executives of the country’s largest food retailers, Woolworths Group Ltd. and Coles Group Ltd., are poised to face policymakers over their price setting practices and “market power” after Australia’s Greens won support from the governing center-left Labor Party for public hearings in 2024.

“For too long the big supermarkets have had too much market power. This allows them to dictate prices and terms that are hitting people hard,” Greens Senator Nick McKim said in a statement on Sunday. “We’ll find a way to dismantle their power and bring grocery prices down.”

Coles and Woolworths are the two largest supermarket chains in the country with just over half the market share combined, according to Bloomberg Intelligence. The companies lead competitors on economies of scale in distribution and from heavy investment into online shopping.

Focus on the issue underlines the political currency to be had as cost of living pressures rise across all income brackets. Surging inflation and the interest rate increases instituted to dampen them have created a consumer crunch in Australia. Figures from the benchmark consumer survey reported consumer sentiment continued to decline last month even as unemployment remains low.

(Bloomberg)