Markets Overview
- ASX SPI 200 futures down 0.3% to 8,450.00
- Aussie little changed at 0.6503 per US$
- Australia 3-year bond yield fell 5.7 bps to 3.91%
- Australia 10-year bond yield fell 5.5 bps to 4.36%
- Gold spot little changed at $2,637.92
- Brent futures up 0.6% to $73.28/bbl
Economic Events
- 11:00: (AU) Australia to Sell A$700 Million 1.5% 2031 Bonds
- 11:30: (AU) Oct. Private Sector Credit MoM, est. 0.5%, prior 0.5%
- 11:30: (AU) Oct. Private Sector Credit YoY, prior 5.8%
European stocks snapped two days of declines, with technology leading the advance amid hopes that US curbs on chip equipment sales to China may prove lighter than feared.
The US is considering measures on sales of semiconductor equipment and AI memory chips to China that would stop short of stricter limits previously under discussion, Bloomberg News reported. The Stoxx 600 index rose 0.4%, boosted by semiconductor-linked stocks including ASML Holding NV, VAT Group AG and Aixtron SE.
The Brazilian real tumbled to a record low after the government’s plan to cut spending disappointed. The Ibovespa index of Brazilian stocks declined 2.4%, its worst trading day since May last year. US equity futures ticked higher, with no cash trading later due to the Thanksgiving holiday. Trading in Treasuries is shut.
Political turmoil in France weighed on the nation’s stocks and bonds. The yields on benchmark French bonds traded near 3%, briefly on par with those of Greece for the first time on record. The nation’s stocks are set for their worst under-performance against European peers since 2010 as a budget standoff threatens to topple the government.
While French bonds rallied after Finance Minister Antoine Armand said he is prepared to make concessions on the 2025 budget, that did little to shore up months of underperformance.
“The problem with France is it’s one of the largest issuers in Europe and now you’ve got a bit of a buyers’ strike,” Jordan Rochester, head of macro strategy at Mizuho International, said in an interview with Bloomberg TV. “Our head of EGB trading was just in France recently talking to investors, and their interest in buying OATs was extremely low. You’ve got other options, Italy and Spain, and their data’s actually fantastic.”
On the monetary policy front, a pick-up in the Federal Reserve’s preferred gauge of underlying inflation is reinforcing the case for policymakers to proceed gradually with further interest-rate cuts. Traders are also weighing the expected impact of Donald Trump’s administration picks, with the US president-elect’s policies expected to reinforce price pressures.
“When you look at PCE coming out yesterday, core services came out quite strong,” said Kevin Thozet, a member of the investment committee at Carmignac. “We are not heading for double-digit inflation but the disinflationary trend is stalling. The result of the US elections could prolong this cycle with tax cuts.”
The yen weakened to moderate Wednesday’s gain of more than 1% against the greenback which drove it to the strongest since late October. The move came amid views that the Bank of Japan may raise interest rates at its December meeting.
The Bloomberg Dollar Spot Index was steady but remains on course to break an eight-week winning streak, as traders begin to look past the threat of tariffs that’s boosted the greenback since Trump’s victory. Bitcoin traded below $96,000 after a rally on Wednesday.
In the credit market, bond issuers notched €1.705 trillion ($1.8 trillion) of sales in Europe so far in 2024, passing the high-water mark previously set in 2020, according to data compiled by Bloomberg.
Among individual stock movers, Direct Line Insurance Group Plc shares surged as much as 45% after the insurer rejected a £3.3 billion ($4.2 billion) takeover bid from Aviva Plc, the second suitor it’s rebuffed this year.
