Markets Overview
- ASX SPI 200 futures little changed at 7,711.00
- Dow Average little changed at 39,071.56
- Aussie down 0.3% to 0.6510 per US$
- U.S. 10-year yield rose 3.6bps to 4.2170%
- Australia 3-year bond yield fell 3.1 bps to 3.68%
- Australia 10-year bond yield fell 4 bps to 4.10%
- Gold spot up 1.6% to $2,116.50
- Brent futures down 0.8% to $82.86/bbl
Economic Events
- 09:00: (AU) Feb. Judo Bank Australia PMI Compos, prior 51.8
- 09:00: (AU) Feb. Judo Bank Australia PMI Servic, prior 52.8
- 11:30: (AU) 4Q Net Exports of GDP, est. 0.2, prior -0.6
- 11:30: (AU) 4Q BoP Current Account Balance, est. A$5b, prior -A$200m
The relentless rally in stocks took a breather on Monday, with traders awaiting this week’s batch of jobs data and remarks from Federal Reserve officials for clues on the interest-rate outlook.
In the absence of fresh catalysts, equities showed signs of exhaustion after a rally that drove the S&P 500 to its 15th record in 2024. Treasuries fell, with syndicate desks calling for $30 billion of new high-grade bond sales this week.
Speaking Wednesday and Thursday, Fed Chair Jerome Powell is expected to double down on his message that there’s no rush to cut rates. Meantime, data forecast to show labor-market cooling should reinforce bets on policy easing. US 10-year yields increased four basis points to 4.22%.
Other News
Prime Minister Anthony Albanese will unveil a A$2 billion ($1.3 billion) financing facility as the centerpiece of a new package to drive Australian trade and investment in Southeast Asia, strengthening regional ties at a time of uncertainty over the US-China economic relationship.
Albanese will announce the measures in a speech to top executives at a special summit between Australia and the Association of Southeast Asian Nations in Melbourne on Tuesday, saying “Southeast Asia is where Australia’s future lies.”
“In 2022, our two-way trade with ASEAN Member States passed A$178 billion — greater than our two-way trade with Japan or the US,” Albanese will say according to a text provided ahead of the address. “But we want to do more.”
Australia is hosting the leaders of all ASEAN nations, bar Myanmar, for a summit to commemorate 50 years of relations. Albanese’s center-left Labor government has made a priority of improving economic and security links with Southeast Asia in the wake of growing uncertainty sparked by the rise of China and the possible return of former US President Donald Trump.
Among the new package of measures are the A$2 billion Southeast Asia Investment Financing Facility, A$140 million over four years to build infrastructure financing partnerships, as well as investment “landing pads” to support Australian businesses in Vietnam and Indonesia.
In addition, Australia will extend its business validity visas from three years to five and extend the 10-year frequent traveler scheme to eligible ASEAN countries as well as Timor Leste.
Australia wants to deepen economic links with nations to its north as it tries to find a path between China, its biggest trading partner, and the US, its key security ally. This comes at a time when the US and China, the world’s two largest economies, are trying to unwind some of their connections forged over the past 25 years and create their own blocs.
Australia’s efforts to diversify its trading partners were highlighted in its new Southeast Asia economic strategy at the ASEAN summit in Jakarta in September.
“While there is so much untapped potential – there is not unlimited time,” Albanese will say. “We must act together – and we must act now.”
Among executives who will attend the speech are Commonwealth Bank of Australia’s Matt Comyn, Rio Tinto Australia’s Kellie Parker, BHP Australia’s Geraldine Slattery and Macquarie Group Ltd’s Shemara Wikramanayake.
(Bloomberg)
