Markets Overview
- ASX SPI 200 futures little changed at 7,997.00
- Dow Average up 0.5% to 40,211.72
- Aussie down 0.4% to 0.6759 per US$
- US 10-year yield rose 4.7bps to 4.2294%
- Australia 3-year bond yield fell 1.1 bps to 4.04%
- Australia 10-year bond yield little changed at 4.32%
- Gold spot up 0.5% to $2,422.36
- Brent futures down 0.1% to $84.94/bbl
Economic Events
Wall Street was buoyed by optimism surrounding a second Donald Trump term as the former US President chose his running mate days after surviving an assassination attempt. Asian stocks were set for a more muted open.
Equity futures in Australia, China and Japan were steady, while contracts for Hong Kong fell. US futures edged higher in early Tuesday trading after benchmarks there climbed and traders priced a greater chance Trump will win this year’s presidential election.
The Dow Jones Industrial Average hit an all-time high as Trump named JD Vance as his running mate. Trump Media & Technology Group Corp. soared 31%. Conservative video-sharing p.latform Rumble Inc. jumped 21%. Trump’s rising odds of victory boosted oil producers, gun makers and private prisons. His pro-cryptocurrency stance lifted the industry. Tesla Inc. rallied as Elon Musk endorsed Trump. Solar firms sank as Democrats are seen as more friendly toward the sector.
The S&P 500 topped 5,630. Apple Inc. hit a fresh high. The Russell 2000 of smaller firms added almost 2%, notching the best four-day run since 2020. Goldman Sachs Group Inc. climbed on a surge in profits. Macy’s Inc. sank after ending buyout talks.
The dollar rose with long-dated Treasury yields, with US 30-year yield above the two-year one for the first time since January as traders priced the prospect of a more expansive fiscal policy under Trump. Australian bonds climbed in early trading.
Other News
Futures signal a gain in Australian government bonds as increased bets on Fed interest-rate cuts damp expectations of a Reserve Bank rate hike. New Zealand’s 10-year note rallies for an eighth day, the longest winning streak since March 2020.
- Implied yield on Australia’s 3-year note futures fell 3bps to 3.98% in the overnight session
- That on 10-year debt futures declined 3bps to 4.30%
- Futures signal a 26% probability that the RBA will increase the policy rate by November, compared with 41% at the end of last week
- New Zealand’s 10-year yield falls 3bps to 4.42%
