Markets Overview
- ASX SPI 200 futures up 0.7% to 7,954.00
- Dow Average up 0.3% to 40,415.44
- Aussie down 0.6% to 0.6642 per US$
- US 10-year yield rose 1.4bps to 4.2525%
- Australia 3-year bond yield rose 1 bp to 4.01%
- Australia 10-year bond yield rose 2.3 bps to 4.31%
- Gold spot down 0.2% to $2,396.72
- Brent futures down 0.4% to $82.26/bbl
Economic Events
- 11:00: (AU) Australia to Sell A$100 Million 2.5% 2030 Inflation-Linked…
Stocks in Asia are set to track a rebound on Wall Street as investors looked beyond Joe Biden ending his reelection campaign to focus on the start of the tech earnings season.
Futures pointed to gains in Hong Kong, Tokyo and Sydney, with the S&P 500 jumping 1.1% after three days of losses. Despite the earlier selloff, almost two-thirds of respondents to Bloomberg’s Markets Live Pulse survey expect earnings to reinvigorate the US benchmark, with results from Tesla Inc. and Alphabet Inc. due later Tuesday. US equity futures were little changed in early trading.
Sky-high valuations and seasonal weakness have incited some stock pullback warnings, with traders also facing political uncertainties. Yet even with the many headlines that followed Biden’s decision to quit the race and endorse Kamala Harris, a sense of calm prevailed Monday. Volatility slumped as dip buyers emerged.
“This political shake-up shouldn’t materially alter the direction of the markets,” said Tom Essaye at The Sevens Report. “The ultimate direction of the S&P 500 will still be determined by economic growth.”
The S&P 500 rose the most since early June. The Nasdaq 100 added 1.5%. A gauge of the “Magnificent Seven” climbed about 2.5%, led by gains in Tesla and Nvidia Corp. The Nasdaq Golden Dragon China Index, a gauge of US-listed Chinese shares, advanced 2.8%.
Treasury yields edged higher, setting the stage for this week’s readings on the economy as well as the Federal Reserve’s preferred inflation gauge. For much of July, bets on a rate cut in September drove shorter-term bonds up — narrowing the gap with longer-dated maturities.
Australian bond yields advanced for a third day on Tuesday, while the currency was little changed after a six-day slump — its longest losing streak in eleven months as commodity prices tumbled. The greenback was steady in early Asian trading.
Other News
Futures suggest weakness in Australia’s government bonds after the yield curve bear-steepened in the US. New Zealand’s 10-year notes are set for their longest losing streak in almost three weeks.
- Implied yield on Australia’s 3-year note futures rose 2bps to 4.00% in the overnight session
- That on 10-year futures added 2.5bps to 4.34%
- New Zealand’s 10-year yield advances 1bp to 4.42% in its third day of rise
- Treasury 10-year yield edged 1bp higher on Monday, while 30-year yield climbed 2.5bps, with investors focusing the prospects for the US presidential election
