Markets Overview

  • ASX SPI 200 futures little changed at 8,258.00
  • Dow Average little changed at 43,826.52
  • Aussie little changed at 0.6368 per US$
  • US 10-year yield little changed at 4.3928%
  • Australia 3-year bond yield rose 2.5 bps to 3.87%
  • Australia 10-year bond yield rose 2.8 bps to 4.32%
  • Gold spot up 0.2% to $2,654.02
  • Brent futures down 0.9% to $73.80/bbl

Economic Events

  • 10:30: (AU) Dec. Westpac Consumer Conf Index, prior 94.6

US stocks broadly ended Monday’s session higher as traders geared up for interest-rate decisions by major central banks across the globe due later this week.

The S&P 500 rose 0.4% while the Nasdaq 100 gained 1.5% to notch another record high. The 10-year Treasury yield was little changed at 4.39%. Bitcoin hit a fresh record.

Sentiment in the US is relatively positive, with a widely expected quarter-point rate cut from the Federal Reserve on Wednesday seen as adding fresh support and extending stocks’ outperformance. That stands in contrast to losses in Asia and Europe on Monday after weaker-than-anticipated retail data in China.

In the US, “near-term momentum may depend on what Fed Chair Powell says after the announcement, and whether retail sales or the PCE Price Index catch the market off guard,” said Chris Larkin, manging director, trading and investing, at E*Trade from Morgan Stanley.

Historically, most of the stock market’s December gains tend to come in the second half of the month, he said, adding that the S&P 500 had a positive net return in this period 78% of the time since 1957.

Traders are also parsing fresh economic data. On Monday, data showed that activity at US service providers is expanding at the fastest pace since October 2021. Meanwhile, a measure of New York state factory activity retreated by the most since last May.

The main focus remains Wednesday’s Fed decision, which will be followed by policy announcements in Japan, the Nordics and the UK this week. Even if we get a “hawkish cut” from the Fed, it would be because the central bank sees underlying strength in the economy, and that means the rally in US stocks could continue to broaden out, Tony DeSpirito, BlackRock’s global chief investment officer of fundamental equities, said on Bloomberg TV.

Bloomberg’s dollar index, meanwhile, fluctuated between modest gains and losses on Monday. After strengthening more than 6% so far this year, Wall Street is starting to sour on the greenback as Trump’s policies and the Fed’s interest-rate cuts are seen to put pressure on the currency in the latter portion of 2025.

The Canadian dollar declined modestly on news that Prime Minister Justin Trudeau will name Dominic LeBlanc finance minister. Earlier, finance minister Chrystia Freeland resigned from Trudeau’s cabinet because of differences over how to prepare for the Trump administration.

German lawmakers passed a measure that will pave the way for a national election in two months, backing Chancellor Olaf Scholz’s plan to end his embattled administration early. Meanwhile, euro-area private-sector activity shrank less than anticipated thanks to a bigger-than-expected contribution from services.

French bonds lagged peers after Moody’s Ratings cut the country’s credit rating. The Bank of France trimmed its domestic growth outlook, with the central bank citing political upheaval as a drag on household and business confidence.

In China, retail sales growth unexpectedly weakened in November despite signs of improvement in the housing market. The data builds on traders’ disappointment last week when Beijing pledged to boost consumption but failed to offer details on fiscal stimulus.

The retail-sales data “is a reflection of the dire situation there and how the stimulus efforts have prioritized optics over delivering meaningful economic improvements,” said Charu Chanana, chief investment strategist at Saxo Markets in Singapore. “Even for a tactical recovery, we need more after a series of false starts and the risk of tariffs ahead.”

Oil slipped after China’s latest economic data reinforced concerns over weakening demand in the biggest importer.