Markets Overview
- ASX SPI 200 futures up 0.2% to 7,797.00
- Dow Average down 0.2% to 41,359.97
- Aussie up 0.3% to 0.6317 per US$
- US 10-year yield rose 4.2bps to 4.3220%
- Australia 3-year bond yield rose 2.9 bps to 3.77%
- Australia 10-year bond yield rose 6 bps to 4.44%
- Gold spot up 0.6% to $2,932.11
- Brent futures up 2.0% to $70.97/bbl
Economic Events
- 10:30: (AU) Australia to Sell A$2 Billion 91-Day Bills
- 10:30: (AU) Australia to Sell A$2 Billion 133-Day Bills
- 11:00: (AU) Australia to Sell A$150M 0.25% 2032 Inflation-Linked Bonds
- 11:00: (AU) March Consumer Inflation Expectation, prior 4.6%
- 13:30: (AU) RBA’s Jones-Panel
Asian equities were primed for early gains Thursday after cooler-than-forecast US inflation helped Wall Street rebound from two days of heavy losses.
Equity index futures for Japan and Australia rose, helped along by a 0.5% gain for the S&P 500 on Wednesday and a 1.1% advance for the tech-heavy Nasdaq 100. The gains were the first since Friday for US benchmarks, which each remain over 3% lower this week. Hong Kong equity futures fell, tracking declines in an index of US-listed Chinese companies.
Treasuries failed to meaningfully move on the inflation print. The US 10-year yield rose three basis points to 4.3%. The policy-sensitive two-year yield climbed four basis points. Major currencies held to tight ranges. An index of the dollar was little changed Wednesday.
The muted moves and lack of a clear response to the inflation data in Treasuries was a further sign the uncertainty triggered by President Donald Trump’s trade policies weighed on sentiment across global markets.
“For the last three weeks, traders have felt like buying this market is like trying to catch a falling knife,” said Mark Hackett at Nationwide. “But extreme oversold conditions and near-universal pessimism suggest a relief rally is likely.”
On Wednesday, Trump said the US would respond to the European Union’s countermeasures against his new 25% tariffs on steel and aluminum, raising the risk of further escalation in his global trade war. Earlier in the day, Canada announced new 25% tariffs on about $20.8 billion of US-made products, including steel and aluminum, after the Trump administration went ahead with global levies on imports of the two materials.
US CPI, and a separate measure that strips out food and energy prices, both rose 0.2% in February compared to the 0.3% consensus forecast. The better-than-expected result is a positive sign given the potential for tariffs to drive costs higher for American households.
“Despite the improvement provided by the latest consumer price index, uncertainty remains in the air as the outlook for inflation remains hazy due to trade policy developments, according to Oscar Munoz and Gennadiy Goldberg at TD Securities. “In this context, the Federal Reserve is unlikely to change its policy guidance anytime soon,” they said.
A government report on US producer prices due later Thursday will offer insights on additional categories that feed directly into the the Fed’s favored inflation gauge, which is scheduled for later this month.
In Asia, data set for release includes consumer confidence in Thailand, industrial production and producer prices in Hong Kong. Trade data for India may be released any time through March 17 while money supply data for China may be released any time through March 15.
