Markets Overview

  • ASX SPI 200 futures little changed at 7,660.00
  • Dow Average down 0.1% to 38,900.89
  • Aussie little changed at 0.6495 per US$
  • U.S. 10-year yield fell 1.4bps to 4.2502%
  • Australia 3-year bond yield fell 2.9 bps to 3.70%
  • Australia 10-year bond yield fell 3.1 bps to 4.14%
  • Gold spot up 0.5% to $2,044.29
  • Brent futures little changed at $83.62/bbl

Economic Events

  • 09:00: (AU) Feb. Judo Bank Australia PMI Mfg, prior 47.7
  • 11:00: (AU) Australia to Sell A$800 Million 3.75% 2034 Bonds

Asian equities headed for a cautious start on Friday after US stocks ended February with fresh highs as the Federal Reserve’s preferred inflation gauge met consensus forecasts.

Share futures for Japan and Australia were moderately higher while those for Hong Kong edged slightly lower. The Golden Dragon index of US-listed Chinese companies fell in New York trading Thursday.

The S&P 500 advanced 0.5% and the Nasdaq 100 rose 1% with both indexes closing at record levels, helped along by Nvidia Corp., which also set its highest closing price Thursday. The two benchmarks ended February with their fourth consecutive monthly advance.

Stocks were buoyed by US personal consumption expenditures index data released Thursday. Although it showed underlying inflation running at the fastest pace in a year, the reading met consensus expectations from economists and failed to dent the broader dis-inflationary trend underpinning rate-cut forecasts.

Treasuries were slightly higher in US trading for a second session, helped along by jobless claims data that indicated labor-market softening. Traders also pointed to the possibility that short covering was behind the gains.

Other News

Ares Management Corp. has teamed up with Sydney-based Pallas Capital for an A$500 million fund that will provide liquidity to commercial real estate firms who lack bank funding.

Dan Gallen, the Australian firm’s chief investment officer, said the new vehicle will provide asset-backed loans to mid-market borrowers. While the US asset manager is contributing the lion’s share of the money, Pallas said it is providing A$50 million.

“This is a classic marriage of international capital partnering with a reputable local partner,” Gallen told Bloomberg in an interview on Thursday. “We tap into a market where there’s unmet demand.”

The move underscores the boom underway in private credit, which has emerged as an alternative to lending by deposit-taking institutions who’ve been subject to tougher rules since the global financial.

Private credit assets under management in Australia hit a record of about A$188 billion in 2023, according to Ernst & Young LLP.

Growth is expected to continue, and a Bloomberg survey published earlier this week found respondents see opportunities in real estate.

Pallas Funding Trust No. 2, as the new vehicle is known, will make pre-development loans, investment property loans and residual stock loans. Pallas said they’ll typically range between A$2 million and A$25 million.

“It’s going to be deployed very quickly because we know there’s strong demand for the product,” Gallen said, adding the tenors would be 15 months to 18 months.