Markets Overview

  • ASX SPI 200 futures up 0.5% to 7,529.00
  • Dow Average up 0.1% to 38,314.50
  • Aussie up 0.6% to 0.6491 per US$
  • U.S. 10-year yield fell 5.1bps to 4.2632%
  • Australia 3-year bond yield rose 9.3 bps to 3.86%
  • Australia 10-year bond yield rose 9.3 bps to 4.27%
  • Gold spot little changed at $1,991.84
  • Brent futures down 1.5% to $81.52/bbl

Economic Events

  • 10:30: (AU) Australia to Sell A$1 Billion 126-Day Bills
  • 10:30: (AU) Australia to Sell A$1 Billion 84-Day Bills
  • 11:00: (AU) Feb. Consumer Inflation Expectation, prior 4.5%
  • 11:30: (AU) Jan. Part Time Employment Change, prior 41,400
  • 11:30: (AU) Jan. Full Time Employment Change, prior -106,600
  • 11:30: (AU) Jan. Employment Change, est. 25,000, prior -65,100
  • 11:30: (AU) Jan. Participation Rate, est. 66.9%, prior 66.8%
  • 11:30: (AU) Jan. Unemployment Rate, est. 4.0%, prior 3.9%
  • 14:30: (AU) Jan. CBA Household Spending YoY, prior 3.1%
  • 14:30: (AU) Jan. CBA Household Spending MoM, prior -3.9%

A renewed wave of dip buying sent stocks and bonds higher on Wednesday after losses triggered by an unexpected pickup in US inflation.

The rebound in Treasuries was led by shorter maturities and followed a selloff triggered by a reset in Federal Reserve rate-cut bets. With that adjustment, the premium traders are paying to hedge a sustained rise in long-end yields hit the most expensive level since October. Equities also gained in a choppy session.

Fed Bank of Chicago President Austan Goolsbee said slightly higher inflation data for a few months would still be consistent with a path back to the central bank’s 2% goal. Traders are now only fully pricing in three Fed rate cuts for this year, with around a 70% chance of a fourth reduction. That lines up with the US central bank’s own forecast for three easing moves.

The S&P 500 hovered near 4,980. Nvidia Corp. briefly overtook Google’s parent Alphabet Inc.’s market capitalization, while Apple Inc. extended losses into a third day. Uber Technologies Inc. surged on plans to buy back shares. Bristol Myers Squibb Co.’s bond sale was said to exceed $85 billion in demand. Two-year US yields fell 10 basis points to 4.56%.

Other News

Australia’s government will offer grants totaling A$40 million to fund critical minerals partnerships aimed at opening downstream international export markets.

Funding will be made available for pilot and demonstration plants, and research and development, with a focus on value-adding for exports rather than shipping raw materials such as lithium, manganese and rare earths, Resources Minister Madeleine King said in an emailed statement Wednesday.

“These grants support our Critical Minerals Strategy, which will build Australia’s sovereign capability in critical minerals processing, diversify global supply chains, and help Australia become a clean-energy superpower,” King said. The program will run for four years and target opportunities in the US, UK, Japan, India, South Korea and the European Union, she added.

The funding follows October’s announcement of a A$2 billion expansion to the Critical Minerals Facility, which is managed by Australia’s export credit agency.