Markets Overview

  • ASX SPI 200 futures down 0.2% to 8,782.00
  • S&P 500 down 0.3% to 6,373.45
  • Euro down 0.2% to $1.1617
  • Aussie down 0.1% to 0.6514 per US$
  • US 10-year yield little changed at 4.2849%
  • Australia 3-year bond yield little changed at 3.40%
  • Australia 10-year bond yield little changed at 4.25%
  • Gold spot down 1.6% to $3,342.81
    Brent futures up 0.2% to $66.69/bbl

Economic Events

  • 11:30: (AU) July NAB Business Confidence, prior 5
  • 11:30: (AU) July NAB Business Conditions, prior 9
  • 14:30: (AU) Aug. RBA Cash Rate Target, est. 3.60%, prior 3.85%
  • 14:30: (AU) RBA-Statement on Monetary Policy

RBA is expected to cut the cash rate target by 25 basis points to 3.60% today while its statement is likely to emphasize it will continue taking a gradual, data-dependent approach to further easing, according to Bloomberg Economics.

 

Asian stocks were poised for a subdued open, weighed down by a risk-off mood on Wall Street ahead of a key inflation report likely to shape the Federal Reserve’s path on interest rates.

Equity futures signaled losses in Hong Kong and Sydney, while Tokyo looked set to rise as markets reopen after a holiday. US stocks lost steam on Monday after climbing to the brink of all-time highs. Treasuries fluctuated and the dollar rose.

With the earnings season almost done, investors are turning to economic data for clues on whether the Fed will be able to cut rates in September. The S&P 500 remained below 6,400. Apple Inc. slid after its best week since 2020. Intel Corp. climbed as its chief was expected to meet with President Donald Trump.

Markets barely budged after reports Trump extended a pause of tariffs on Chinese goods for another 90 days. Gold futures held losses after he said imports of bullion won’t be subject to US tariffs. Bitcoin briefly topped $122,000.

Data due Tuesday is forecast to show US consumers saw a slight pickup in inflation as retailers gradually raised prices on a variety of items subject to higher import duties.

“The market’s reaction to any surprises in the numbers could be exaggerated — especially if a significantly hotter-than-expected CPI print leads traders to believe the Fed may not cut rates at its next meeting,” said Chris Larkin at E*Trade from Morgan Stanley.

The Fed’s two vice chairs, Michelle Bowman and Philip Jefferson, and Dallas Fed President Lorie Logan are under consideration to serve as chair of the central bank when the position opens next year, according to two administration officials. Treasury Secretary Scott Bessent will interview additional candidates in the coming weeks, said the officials.

Trump also said he hopes China will massively step up its purchases of American soybeans, even as the Asian nation has yet to book any cargoes for the upcoming season and is stepping up rare exports of soybean oil.

The long-troubled lithium market received a boost when China’s CATL, the world’s biggest battery producer, confirmed the closure of its Jianxiawo mine on Monday, saying it’s seeking to renew its expired permit. Shares of North American producers soared as investors bet that the suspension would ease a supply glut and likely lead to a rebound in prices.

Australia’s central bank is poised to deliver its third interest-rate cut this year on Tuesday as inflationary pressures ebb, while Governor Michele Bullock is expected to stick with her cautious stance on the monetary policy outlook.

In the US, the core consumer price index, regarded as a measure of underlying inflation because it strips out volatile food and energy costs, will show a 0.3% increase for July, according to the median projection in a Bloomberg survey of economists.

“There is no doubt about it, CPI will not be good,” said Andrew Brenner at NatAlliance Securities. “The bigger question is ‘does it matter?’ We think not. Inflation will remain sticky, with potholes, but a weakening employment situation will commandeer the Fed outlook.”

Money markets show traders have priced in more than two rate reductions by December, with about an 80% probability of a quarter-point Fed cut as early as next month.

On the geopolitical front, President Trump downplayed expectations for his upcoming meeting with Russian leader Vladimir Putin as he seeks to end the war in Ukraine, casting it as a “feel-out meeting” and saying he would confer with Ukrainian and European leaders after the sitdown.