Markets Overview

  • ASX SPI 200 futures down 0.2% to 7,765.00
  • Dow Average little changed at 39,150.33
  • Aussie down 0.2% to 0.6640 per US$
  • US 10-year yield little changed at 4.2554%
  • Australia 3-year bond yield little changed at 3.91%
  • Australia 10-year bond yield rose 0.8 bps to 4.21%
  • Gold spot down 1.6% to $2,321.98
  • Brent futures down 0.5% to $85.24/bbl

Economic Events

  • 11:00: (AU) Australia to Sell A$900 Million 3.25% 2029 Bonds

Wall Street’s massive expiration of options not only left stock traders more cautious, it also drove one of the leaders of the bull market to a roller-coaster ride. Volume soared at the close of trading.

It was estimated that $5.5 trillion expired during the quarterly event ominously known as “triple witching” in which derivatives contracts tied to equities, index options and futures mature. Nearly 18 billion shares changed hands on US exchanges Friday. That’s over 55% above the three-month average.

This time around, Nvidia Corp. played an added role. The value of contracts tied to the chipmaker due Friday was the second-largest of any underlying asset, lagging only the S&P 500. And the expiration coincided with index rebalancing by S&P Dow Jones Indices.

As the contracts disappear, investors adjust their positions, adding a burst of volume capable of swinging individual holdings. The S&P 500 edged lower to around 5,465. Nvidia almost erased a plunge of about 5% before pushing lower again. It erased over $220 billion in value in two days. Apple Inc. also fell.

Treasury 10-year yields were little changed at 4.25%. France’s risk premium over Germany closed at the highest since 2012.

Other News

Woolworths Group Ltd., Coles Group Ltd. and other major Australian supermarkets will face potential multimillion dollar fines for anti-competitive behavior under a government push to crack down on unfair prices and the rising cost of living.

Any supermarket with annual sales of more than A$5 billion ($3.3 billion) must adhere to a strengthened Food and Grocery Code of Conduct, Treasurer Jim Chalmers said in a statement Sunday. The penalty for a serious breach will either be A$10 million, three times the benefit gained from the behavior, or 10% of annual revenue — whichever is the greatest.

The new measures follow a government-commissioned review of the industry’s code of conduct, which is currently voluntary. The final report found large supermarkets hold too much power over suppliers and farmers, who fear retribution if they raise concerns about their treatment. Woolworths, Coles, Aldi and Metcash Ltd. all meet the proposed A$5 billion sales threshold, according to the review.

Chalmers, under pressure to rein in rising prices, said all the review’s recommendations will be implemented. They included creating a pathway for anonymous whistleblower complaints within Australia’s competition regulator, and requiring fresh-produce supply agreements to show how prices are determined.

The government will prioritize the necessary changes to the Competition and Consumer Act, Chalmers said.