Markets Overview

  • ASX SPI 200 futures down 0.1% to 7,772.00
  • Dow Average down 0.3% to 38,571.03
  • Aussie up 0.5% to 0.6689 per US$
  • US 10-year yield fell 10.8bps to 4.3904%
  • Australia 3-year bond yield fell 3 bps to 4.02%
  • Australia 10-year bond yield fell 4 bps to 4.37%
  • Gold spot up 1.0% to $2,350.78
  • Brent futures down 3.7% to $78.12/bbl

Economic Events

  • 11:30: (AU) 1Q Net Exports of GDP, est. -0.7, prior 0.6
  • 11:30: (AU) 1Q Company Operating Profit QoQ, est. -0.9%, prior 7.4%
  • 11:30: (AU) 1Q BoP Current Account Balance, est. A$5.2b, prior A$11.8b
  • 11:30: (AU) 1Q Inventories SA QoQ, est. 0.7%, prior -1.7%

Australian and New Zealand bonds rallied, tracking gains in Treasuries after weak US data bolstered bets for the Federal Reserve to cut interest rates. Asian shares declined.

Treasuries rose across the curve Monday after data showed factory activity shrank at a faster pace as output came close to stagnating, with 10-year yields sinking 11 basis points to 4.39%. Australia’s equivalent yield fell six basis points in early Tuesday trading, while New Zealand’s slipped seven basis points.

Shares in South Korea and Japan edged lower in early Tuesday trading while those in Australia were flat. Futures also pointed to a soft open in Hong Kong, with contracts for US were little changed.

The dollar weakened against most of its Group-of-10 counterparts. Asian currencies such as the Malaysian ringgit and South Korean won strengthened.

US data indicated manufacturing is struggling to gain momentum due to high borrowing costs, restrained investment in equipment and softer consumer spending. At the same time, producers are battling elevated input costs.