Markets Overview

  • ASX SPI 200 futures down 0.1% to 8,196.00
  • Dow Average up 0.1% to 42,124.65
  • Aussie up 0.4% to 0.6837 per US$
  • US 10-year yield little changed at 3.7508%
  • Australia 3-year bond yield rose 3.7 bps to 3.55%
  • Australia 10-year bond yield rose 4.1 bps to 3.96%
  • Gold spot up 0.2% to $2,628.39
  • Brent futures down 0.4% to $74.20/bbl

Economic Events

  • 14:30: (AU) Sept. RBA Cash Rate Target, est. 4.35%, prior 4.35%

Asian equities are set to follow Wall Street peers higher after several Federal Reserve policymakers hinted at further easing and as optimism surged that China was poised to announce stimulus measures.

Tokyo and Hong Kong futures benchmarks pointed to increases of at least 1%, though Sydney shares looked flat-to-lower. US stock futures edged down after equities eked out gains on Monday with the S&P 500 advancing 0.3%, a whisker away from last week’s all-time high.

Data released Monday showed US business activity expanded at a slightly slower pace in early September, while expectations deteriorated and a gauge of prices received climbed to a six-month high, stoking confidence the world’s largest economy can nail a soft landing.

“This is a somewhat inconclusive report, and therefore it shouldn’t alter Fed expectations dramatically,” according to Vital Knowledge’s Adam Crisafulli. “The flash PMIs do suggest the US economy is on reasonably sound footing, especially compared to Europe.”

Investors are now awaiting data on the Fed’s preferred price metric and US personal spending later this week.

In Asia, speculation has surged that Beijing will ramp up efforts to revive growth. Authorities announced Monday that central bank chief Pan Gongsheng will hold a press conference Tuesday on financial support for economic development. Minutes later, the People’s Bank of China lowered the 14-day reverse repurchase rate, catching up with reductions initiated in July.

Taken together, the moves bolster expectations for the PBOC to lower rates, after a slew of disappointing data in August raised concerns that the government could miss its annual growth target of around 5% without unleashing more support.

Australia is expected to remain a global outlier in the easing cycle on Tuesday. Economists see the RBA holding the cash rate at a 12-year high of 4.35% — and keeping it there until at least February.