Markets Overview

  • ASX SPI 200 futures little changed at 7,470.00
  • Dow Average down 0.3% to 37,592.98
  • Aussie little changed at 0.6688 per US$
  • U.S. 10-year yield fell 2.6bps to 3.9390%
  • Australia 3-year bond yield fell 5.7 bps to 3.69%
  • Australia 10-year bond yield fell 3.4 bps to 4.07%
  • Gold spot up 1.0% to $2,049.06
  • Brent futures up 1.1% to $78.29/bbl

Economic Events

  • 11:00: (AU) Dec. Melbourne Institute Inflation, prior 4.4%
  • 11:00: (AU) Dec. Melbourne Institute Inflation, prior 0.3%
  • 11:30: (AU) Dec. ANZ-Indeed Job Advertisements, prior -4.6%
  • 14:30: (AU) Dec. CBA Household Spending YoY, prior 4.1%
  • 14:30: (AU) Dec. CBA Household Spending MoM, prior 1.8%

Treasury two-year yields dropped to the lowest level since May as a surprise decline in producer prices reinforced bets on Federal Reserve rate cuts this year.

Traders are pricing in an about 80% chance of a Fed reduction in March — up from a little over 50% a week ago. Friday’s economic data came a day after a hotter-than-estimated reading on consumer prices — underscoring the bumpy path officials face in bringing inflation to the 2% target. Investors also sifted through bank results as the US earnings season kicked off, while watching geopolitical developments ahead of Monday’s Martin Luther King Jr. Day.

Two-year US yields fell 10 basis points to 4.15%. Traders priced in about 20 basis points of easing for March. Given that Fed rate changes historically have been increments of 25 basis points, swap contracts still show bets on the first cut in May. The S&P 500 was little changed Friday, while notching a weekly gain. Microsoft Corp. overtook Apple Inc. to become the world’s most-valuable publicly traded company. Oil rose as the US and its allies launched airstrikes against Houthi rebels in Yemen.

Other News

Australia’s gambling watchdog in the state of Victoria ordered Tabcorp Holdings Ltd. to make most of its electronic betting terminals cashless after numerous incidents of minors placing bets.

The Victorian Gambling and Casino Control Commission’s statewide directive will mean Tabcorp’s betting terminals can’t accept cash bets unless they are within five metres, and in the line of sight, of the counter in a gambling venue, according to a statement Sunday.

From later this month about 70% of Tabcorp’s s 1,800 terminals in Victoria will only accept vouchers bought after age and identification checks at a counter.

The new requirements were implemented after continued breaches, despite warnings to the industry, according to VGCCC Chief Executive Officer Annette Kimmitt. Tabcorp faces a total of 72 charges of allowing a minor to gamble and failing to reasonably supervise its electronic betting terminals, the statement said.

“It is inexcusable to accept a bet from a minor and tougher actions are required to protect the community, especially children, from gambling harm,” she said. “Venue staff are the first line of defense in protecting minors from gambling. We have taken decisive measures where they have failed to take their responsibilities seriously.”