Markets Overview

  • ASX SPI 200 futures up 0.5% to 7,737.00
  • Dow Average up 0.5% to 38,852.27
  • Aussie up 0.2% to 0.6626 per US$
  • US 10-year yield fell 2.3bps to 4.4854%
  • Australia 3-year bond yield fell 1.1 bps to 4.03%
  • Australia 10-year bond yield fell 3.9 bps to 4.38%
  • Gold spot up 1.0% to $2,324.02
  • Brent futures up 0.7% to $83.52/bbl

Economic Events

  • 11:30: (AU) 1Q Retail Sales Ex Inflation QoQ, est. -0.3%, prior 0.3%
  • 16:30: (AU) April Foreign Reserves, prior A$89.7b
  • 14:30: (AU) RBA-Statement on Monetary Policy
  • 14:30: (AU) May RBA Cash Rate Target, est. 4.35%, prior 4.35%

Stocks saw their best three-day rally since November, fueled by speculation the Federal Reserve will be able to cut interest rates this year.

The S&P 500 rose 1% after topping its average price of the past 50 days — a level seen by many chartists as key in maintaining the positive sentiment. A solid earnings season kept driving optimism after a pullback that made some areas of the market attractive. While the below-average trading volume raised concern about the sustainability of the advance, most industries gained.

The US equity benchmark rose above 5,180. Nvidia Corp. and Tesla Inc. paced gains in megacaps. Micron Technology Inc. jumped on an analyst upgrade. Apple Inc. fell, with Warren Buffett revealing he’d cut his stake even after heaping praise on the iPhone maker. Treasury 10-year yields slid two basis points to 4.49%.

Traders also kept an eye on the latest geopolitical developments, with Israel rejecting a statement from Hamas that it had accepted a cease-fire proposal to end the fighting in Gaza. Oil closed higher.

Other News

Australia has expressed “concerns” to Beijing over a Chinese fighter jet that it said fired flares near its military helicopter in a move that was “unsafe and unprofessional.”

A People’s Liberation Army aircraft intercepted an Australian helicopter in the Yellow Sea on May 4 and “released flares along the flight path”, according to a statement from the Department of Defence on Monday. The helicopter was operating from an Australian naval vessel enforcing United Nations sanctions against North Korea, the statement said.

“The PLA airforce plane dropped flares about 300 meters in front of the Seahawk helicopter and about 60 meters above it,” Australian Defence Minister Richard Marles told 9News in an interview.

While no Australian personnel were injured in the encounter, the flare-up risks unsettling Beijing and Canberra’s improving ties. Australia on Monday called on all countries including China “to operate their militaries in a professional and safe manner.”

China’s Ministry of Foreign Affairs and Ministry of Defense didn’t immediately respond to requests for comment.

This is the second incident between the militaries of the two countries in recent months, after two Australian navy divers were injured by sonar pulses from a Chinese naval vessel in November last year.

That came right after Prime Minister Anthony Albanese’s trip to Beijing, the first Australian leader to visit in more than seven years after bilateral relations soured.

Ties gradually improved since Albanese came to power in 2022, with China removing punitive tariffs on wine and barley and starting to buy coal and other goods again in the past year.