Markets Overview

  • ASX SPI 200 futures up 0.2% to 7,722.00
  • Dow Average up 0.4% to 39,331.85
  • Aussie up 0.1% to 0.6667 per US$
  • US 10-year yield fell 2.9bps to 4.4316%
  • Australia 3-year bond yield rose 1 bp to 4.14%
  • Australia 10-year bond yield rose 2.7 bps to 4.41%
  • Gold spot down 0.1% to $2,329.48
  • Brent futures little changed at $86.59/bbl

Economic Events

  • 09:00: (AU) June Judo Bank Australia PMI Services, prior 51.0
  • 09:00: (AU) June Judo Bank Australia PMI Composite, prior 50.6
  • 11:00: (AU) Australia to Sell A$600 Million 3.75% 2037 Bonds
  • 11:30: (AU) May Private Sector Houses MoM, prior -1.6%
  • 11:30: (AU) May Building Approvals MoM, est. 1.6%, prior -0.3%
  • 11:30: (AU) May Retail Sales MoM, est. 0.3%, prior 0.1%

Stocks in Asia are set to follow a record-breaking rally on Wall Street as traders weighed prospects for Federal Reserve rate cuts after Jerome Powell cited signals the US is back on a disinflationary path.

Futures for Tokyo, Hong Kong and Sydney pointed higher. The S&P 500 closed above 5,500 for the first time in its history — the gauge’s 32nd record this year — to extend a blistering rally that has left analysts scrambling to update their targets. Tesla Inc. surged 10% to lead gains in megacaps, though Nvidia Corp. failed to gain traction. The Nasdaq 100 closed above the 20,000 mark for the first time.

Equities keep defying doomsayers amid solid corporate earnings, the artificial-intelligence mania and expectations that interest rates will drop, adding more than $16 trillion to the S&P 500’s value from a closing low on October 2022. A lack of any meaningful pullback has given bulls conviction that the rally is sustainable.

On the economic front, data Tuesday showed job openings unexpectedly rose, interrupting a trend that underscored a slowdown in labor seen as key for Fed easing.

Powell said there’s been a “substantial” move toward better balance between the supply of and demand for workers. He described the job market as strong, but said it is cooling off appropriately so.

Wall Street is gearing up for a slew of economic data that will hit the tape Wednesday — when the market closes early due to Thursday’s US holiday.

And that’s all ahead of the all-important US payrolls reading due Friday. Economists expect the report to show employers added about 190,000 payrolls in June and the unemployment rate held at 4%.

Other News

Australia’s A$3.9 trillion pension sector should do more to prepare for the coming wave of retirees by enhancing efforts to track and improve results for members, industry watchdogs said.

With three million people set to retire in the coming decade, a survey by the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority found only “incremental progress” has been made by funds in helping members prepare for leaving the workforce. About A$426 billion in pension savings are held in retirement products.

Rules introduced for Australia’s pensions industry in 2022 — known as the Retirement Income Covenant — require funds to develop a retirement income strategy for members and help those in or approaching retirement to understand what products are available and how they can spend their savings.

“The most concerning finding from this survey is the lack of progress being made by trustees in tracking the success of their strategies, especially as this was highlighted as one of the key areas in need of improvement in the thematic review report,” APRA Deputy Chair Margaret Cole said in a statement.

Australia’s pensions system is the fastest-growing retirement savings pool in the world and has received praise from peers in the US and the UK. The industry receives inflows of about A$2 billion per week from compulsory contributions, which rose to the equivalent of 11.5% of workers’ salaries on Monday. Still, Australians are anxious about having enough money in retirement and the sector is grappling with how to best prepare people to transition leaving the workforce.

Funds told the regulators they faced several challenges, including uncertainty around providing financial advice, privacy, security and costs concerns about collecting more member data, the regulators said. They also cited a lack of member engagement.

The Association of Superannuation Funds of Australia, the peak body for the industry, said funds have made “substantial investments” to provide members with information about retirement.