Markets Overview

  • ASX SPI 200 futures up 0.2% to 7,581.00
  • Dow Average up 0.2% to 38,765.65
  • Aussie little changed at 0.6528 per US$
  • U.S. 10-year yield little changed at 4.1696%
  • Australia 3-year bond yield rose 5.6 bps to 3.76%
  • Australia 10-year bond yield rose 3.5 bps to 4.16%
  • Gold spot down 0.3% to $2,019.17
  • Brent futures down 0.3% to $81.97/bbl

Economic Events

  • 10:30: (AU) Feb. Westpac Consumer Conf SA MoM, prior -1.3%
  • 10:30: (AU) Feb. Westpac Consumer Conf Index, prior 81.0
  • 11:00: (AU) Australia to Sell A$150 Million 2% 2035 Inflation-Linked Bonds
  • 11:30: (AU) Jan. NAB Business Conditions, prior 7
  • 11:30: (AU) Jan. NAB Business Confidence, prior -1

Wall Street kicked off the week with small moves in stocks, bonds and the dollar ahead of inflation figures that will be key to determine the scope and timing of Federal Reserve rate cuts.

Less than 24 hours before the consumer price index, the S&P 500 struggled to gain traction. While the data is expected to underscore further disinflation, traders remained unwilling to commit to big bets. That sense of caution also prevailed after five straight weeks of gains that drove equities above overbought levels, triggering some calls for at least consolidation.

The S&P 500 lost steam after approaching 5,050. The Nasdaq 100 underperformed, led by losses in Microsoft Corp., Apple Inc. and Tesla Inc. Chip designer Arm Holdings Plc soared 29%. Treasury 10-year yields were little changed at 4.17%.

Other News

Australia is lagging international peers on the adoption of artificial intelligence and other advanced technologies, according to the Productivity Commission.

We are “pretty much toward the bottom of the pack of OECD nations,” Danielle Wood, chair of the commission, said at the AFR Workforce Summit on Monday, referring to Australia’s rich-world counterparts. “So there is a really important question, not just how does the government get the policy settings right and there’s a huge amount to be done there, but how do we shift closer to that frontier when it comes to technological adoption?”

Australia’s central bank has persistently highlighted the country’s poor productivity growth among factors putting upward pressure on inflation. Economists say that is also one reason the Reserve Bank will be among the last of the dollar-bloc economies to begin cutting interest rates this year.

A 2023 government report predicted that Australia’s productivity growth would be 1.2% annually in the long-term, down from 1.5% in the same report two years earlier. The 0.3 percentage point drop in productivity will cut estimated real GDP over the next 40 years by almost 10%.

Wood said she was optimistic about the overall impact on productivity from AI adoption in fields such as healthcare, education and retail and “less concerned about some of the negative workforce fallouts.”

“On the jobs piece, we have been through these kind of waves of technological changes before,” Wood said. “It may be that this time is different to history, but certainly what history, at least to date has shown is every time we get one of these waves of change, net job creation is greater than job destruction.”