Markets Overview

  • ASX SPI 200 futures up 0.8% to 8,391.00
  • Dow Average up 0.8% to 43,068.34
  • Aussie down 0.6% to 0.6665 per US$
  • US 10-year yield fell 1.9bps to 4.0141%
  • Australia 3-year bond yield fell 3.9 bps to 3.76%
  • Australia 10-year bond yield fell 4.9 bps to 4.20%
  • Gold spot up 0.5% to $2,675.04
  • Brent futures up 0.1% to $74.35/bbl

Economic Events

  • 10:30: (AU) Australia to Sell A$1 Billion 161-Day Bills
  • 10:30: (AU) Australia to Sell A$1 Billion 119-Day Bills
  • 11:30: (AU) Sept. Full Time Employment Change, prior -3,100
  • 11:30: (AU) Sept. Part Time Employment Change, prior 50,600
  • 11:30: (AU) Sept. Participation Rate, est. 67.1%, prior 67.1%
  • 11:30: (AU) Sept. Employment Change, est. 25,000, prior 47,500
  • 11:30: (AU) Sept. Unemployment Rate, est. 4.2%, prior 4.2%

Equities in Asia braced for early gains after Wall Street closed higher, helped along by a rotation out of mega-cap tech and into economically sensitive shares including smaller companies.

Equity futures for Japan, Australia and Hong Kong all edged higher. An index of US-listed Chinese companies rose almost 1% Wednesday in a sign the country’s equities may bounce after two daily declines as investors digest support measures for the country’s second-largest economy.

Gains for Asian futures followed a 0.5% advance for the S&P 500 on Wednesday. The Russell 2000 index of small-caps rose to the highest level in almost three years, while the Nasdaq 100 lagged, climbing just 0.1%. Nvidia Corp. ran against the grain of muted tech performances, climbing 3.1% to buoy the Magnificent Seven group of mega-cap tech stocks.

The moves signal a shift out of the world’s largest tech companies that have soared on the back of the artificial intelligence boom and into other stocks that benefit in benign economic conditions.

“Investors may be looking to rotate away from large technology companies, which are widely owned and may have fewer clear catalysts going forward,” said David Russell at TradeStation. “With the election coming and the economy returning to balance, the long-awaited rotation away from megacaps to everything else could finally be at hand.”

Chinese President Xi Jinping has called on government officials to make every effort in the final quarter to help the country meet its annual growth target of around 5%. However, after a series of press conferences this month in which policymakers offered no details of fresh stimulus, fears are now mounting that efforts may not be enough to revive growth. The next key event is a press briefing by the housing minister on Thursday.

Elsewhere, Australian and New Zealand bond yields edged lower, tracking minor moves across the curve for Treasuries. The US 10-year yield fell two basis points to 4.01% on Wednesday and a dollar index strengthened for a third day to the highest level since early August. The yen was little changed early Thursday after declining against the greenback in the prior session.