Markets Overview

  • ASX SPI 200 futures up 0.4% to 7,865.00
  • Dow Average little changed at 38,892.80
  • Aussie up 0.4% to 0.6604 per US$
  • US 10-year yield rose 1.8bps to 4.4198%
  • Australia 3-year bond yield rose 7.7 bps to 3.76%
  • Australia 10-year bond yield rose 9.8 bps to 4.20%
  • Gold spot up 0.4% to $2,339.29
  • Brent futures down 0.7% to $90.53/bb

Economic Events

  • 10:30: (AU) April Westpac Consumer Conf Index, prior 84.4
  • 10:30: (AU) April Westpac Consumer Conf SA MoM, prior -1.8%
  • 11:30: (AU) March NAB Business Confidence, prior 0
  • 11:30: (AU) March NAB Business Conditions, prior 10

Stocks in Asia were set to advance early Tuesday, after US benchmarks saw sluggish trading and Treasuries kicked off the week on the back foot ahead of key inflation data.

Futures for equities in Tokyo, Hong Kong and Sydney pointed higher. US 10-year yields rose to the highest since November, coming within striking distance of the psychologically important 4.5% level. Traders’ conviction on three quarter-point rate cuts from the Federal Reserve this year is quickly dissipating, with markets now favoring just two reductions.

Economists surveyed by Bloomberg forecast Wednesday’s consumer price index will show some easing of inflation pressures. Yet the core gauge, which excludes food and energy costs, would be up 3.7% from a year earlier — above the Fed’s 2% target.

Benchmark 10-year yields rose two basis points to 4.42%, after earlier hitting 4.46%. The S&P 500 hovered near 5,200. Megacaps were mixed, with Nvidia Corp. down and Tesla Inc. up almost 5%. Oil fell as Israel said it would remove some troops from Gaza.

Other News

A free-trade agreement between Australia and the European Union would encourage closer ties on critical minerals at a crucial time for the energy transition, Europe’s Commissioner for Energy Kadri Simson said during a visit to Australia.

Talks between the two sides on a trade pact collapsed last year with Canberra unhappy over access to EU markets for its farm goods. They are also seeking cooperation on critical materials — like lithium, copper and nickel — as Western nations push back against Chinese dominance of supply chains.

Simson said an FTA agreement would be a “strong enabler” for joint work on supply of key raw materials, adding to pressure on Australia for a return to negotiations.

“Just as the EU is keen to secure supply chains through investments in critical minerals mining and prospecting, the Australian industry is calling out for more investment,” Simson told an audience at the National Press Club in Canberra on Monday. “But as long as our trade continues to be discriminated against, the opposite will happen.”

Australia is the biggest global lithium producer, but barely sends any energy-transition metals to Europe. In Australia’s last fiscal year ended June 2023, the nation sent 98% of its lithium spodumene to China, according to government figures.

Simson said she had been in conversations with Australia’s Resources Minister Madeleine King for an agreement on critical minerals, and that there would be more news “soon.”

But she added that the EU wanted to resume discussions on a free trade agreement as well. “I’ve been consistently telling my Australian counterparts that we want to re-engage, get back to the negotiating table,” she said.

Australia has maintained any negotiations for a free trade pact are unlikely to resume until after the European Union elections in 2024.