Markets Overview

  • ASX SPI 200 futures up 1.1% to 7,725.00
  • Dow Average up 1.8% to 39,446.49
  • Aussie up 1.1% to 0.6592 per US$
  • US 10-year yield rose 4.7bps to 3.9896%
  • Australia 3-year bond yield fell 3.3 bps to 3.65%
  • Australia 10-year bond yield fell 1 bp to 4.07%
  • Gold spot up 1.9% to $2,427.24
  • Brent futures up 0.9% to $79.04/bbl

Economic Events

  • 11:00: (AU) Australia to Sell A$700 Million 4.75% 2027 Bonds

Asian equities were poised for gains on Friday after signs of resilience in the US labor market lifted US stocks.

Equity futures for Japan, Australia and Hong Kong all rose by at least 1% with contracts for the Nikkei 225 rising more than 2.5%. On Wall Street, the S&P 500 had its best day since November 2022, while the Nasdaq advanced 3.1%.

The rally was driven by US jobless claims that showed fewer people applied for unemployment benefits than expected. The data alleviated concerns about the labor market after worse-than-expected jobs data on Friday last week fanned fears of recession that rippled through global markets.

“It has been quite a week,” said Liz Young Thomas at Social Finance Inc. “Up, down, and all around. We learned how sensitive markets now are to cooler US economic data, how broad reaching the impact of the yen carry trade can be, and how conditioned investors are to expect rate cuts as the salve for every scrape.”

Treasuries dipped across the curve Thursday — with the selloff led by shorter maturities. Bonds held their losses after a weak $25 billion sale of 30-year government debt. Swap traders further trimmed bets on aggressive Federal Reserve easing in 2024. Cryptocurrencies surged, with investors returning to riskier assets across financial markets.

The global repricing has been so sharp that at one point interest-rate swaps implied a 60% chance of an emergency rate cut by the Fed in the coming week — well before its next scheduled meeting in September. Current pricing suggests about 40 basis points of cuts for September.

In Asia, China inflation and producer prices are due, while money supply and new lending data could be released as soon as Friday. Markets are closed in Singapore.