Markets Overview
- ASX SPI 200 futures up 1.3% to 7,940.00
- Dow Average up 2.7% to 39,186.98
- Aussie down 0.8% to 0.6365 per US$
- US 10-year yield little changed at 4.4008%
- Australia 3-year bond yield fell 7.8 bps to 3.27%
- Australia 10-year bond yield fell 2.3 bps to 4.26%
- Gold spot down 1.2% to $3,381.48
- Brent futures up 1.6% to $67.34/bbl
Economic Events
- 09:00: (AU) April S&P Global Australia PMI Compo, prior 51.6
- 09:00: (AU) April S&P Global Australia PMI Servi, prior 51.6
- 09:00: (AU) April S&P Global Australia PMI Mfg, prior 52.1
- 11:00: (AU) Australia to Sell A$1 Billion 3.25% 2029 Bonds
US equity-index futures surged and the dollar strengthened in a broad lift for American assets after President Donald Trump said he had no intention of firing Federal Reserve Chair Jerome Powell and as optimism grew that trade tensions may be easing.
Both S&P 500 and Nasdaq 100 contracts climbed more than 2% after the indexes rebounded on Tuesday amid signs that Washington was closer to clinching trade deals with top economic partners. Equity futures for Japan, Australia and Hong Kong all pointed to gains for Asian stocks. Gold declined for a second consecutive day. A gauge of the dollar rose 0.3%.
Trump’s comments on the Fed chief late Tuesday in Washington walk back opinions expressed earlier in the week that sparked concerns about the US central bank’s independence. The president also said on Tuesday that final tariffs on China wouldn’t be “anywhere near” the 145% level he’s set. Elon Musk saying he will step back “significantly” from his role at the Department of Government Efficiency lifted shares of Tesla Inc.
“While it is still early days, the mood in the market is evidently shifting,” wrote Chris Weston, head of research at Pepperstone Group Ltd. in Melbourne. “What was a strong ‘sell America’ vibe flowing through markets yesterday has in part reversed.”
The action on Wall Street was largely driven by trade war headlines as fast-twitch investors look for clues on how to trade the crisis. White House Press Secretary Karoline Leavitt said in a news briefing that progress is being made on trade deals and that the “ball is moving in the right direction with China.” The comments followed a Politico report that the White House is nearing general agreements with Japan and India on trade.
Shares in Tesla rallied in after-market trading following the auto-maker’s results and comments from Musk about his step back from DOGE.
“We are in a period of extreme uncertainty, where one should not react too much to daily moves,” Anwiti Bahuguna, Northern Trust Asset Management’s CIO of global asset allocation, said on Bloomberg Television on Tuesday.
Havens suffered on Tuesday as gold retreated from a record high, with the metal continuing its decline early Wednesday. Short-dated Treasuries sold off as investors showed lackluster demand for an auction.
US stocks were also supported by Bloomberg’s report of closed-door comments by Treasury Secretary Scott Bessent saying the tariff standoff with China is unsustainable and that he expects the situation to de-escalate. At the same time, the International Monetary Fund sharply lowered its forecasts for world growth this year and next, along with a warning that the outlook could worsen because of the trade war.
The IMF said the escalation in the trade war risks saddling China and the US with losses — and that it could only get worse after this year. Yet, some traders are waiting to see how negotiations play out with allies.
“We are looking at more successful trade negotiations with key trading allies. I put Europe, India, Japan, South Korea, Australia in that category,” Stuart Kaiser, head of equity trading strategy at Citigroup Inc., said on Bloomberg Television on Tuesday. “I think we will see good progress there and that is good for markets.”
The US said it’s made “significant progress” toward a bilateral trade deal following talks between Vice President JD Vance and Indian Prime Minister Narendra Modi. Vance on Tuesday called on India to buy more American goods, particularly energy and military equipment. Trump has repeatedly criticized the country for high tariffs.
Bitcoin advanced above $90,000 for the first time since early March, fueling optimism that the biggest digital token is finally breaking free of a longstanding tendency to move in the same direction as US tech stocks.
In commodities, oil rose Tuesday as the potential for the US to curtail Iranian flows added to a rebound driven by broader markets. Copper climbed to a two-week high as base metals benefited from a recent dollar rout.
