Markets Overview
- ASX SPI 200 futures down 0.6% to 8,843.00
- S&P 500 down 0.3% to 6,449.80
- Dow Average little changed at 44,946.12
- Aussie up 0.2% to 0.6511 per US$
- US 10-year yield rose 3.3bps to 4.3160%
- Australia 3-year bond yield rose 0.9 bps to 3.35%
- Australia 10-year bond yield rose 1.9 bps to 4.23%
- Gold spot little changed at $3,336.19
- Brent futures down 1.5% to $65.85/bbl
Economic Events
Battery investors are piling into Australia, chasing profits from the world’s most volatile power market by deploying storage that buys low and sells high. NAB and New Hope are set to provide quarterly updates while companies including Ampol and Aurizon release earnings.
Asian markets are set for a tepid start ahead of talks between Donald Trump and Volodymyr Zelenskiy, after the US-Russia summit on the Ukraine war ended without a ceasefire.
US equity futures contracts were little changed in early trading after the S&P 500 Index closed lower on Friday, while the dollar held in a narrow range against major peers.
Oil dipped as Trump refrained from imposing additional tariffs on China over purchases of Russian energy. Before meeting Vladimir Putin, Trump told allies a ceasefire was his main demand and threatened to walk out and impose tough measures on Moscow and its oil buyers if it wasn’t met. By Friday, he signaled no rush to enforce penalties.
Traders now await a meeting between Trump and Ukraine counterpart Zelenskiy later Monday as details from the US-Russia talks remain scarce.
With expectations already low heading into the summit, market reaction is likely to be mild “as a lot still rests on Ukraine’s willingness to accept the terms from Russia,” said Jordan Rochester, Head Of Macro Strategy For EMEA at Mizuho Corp. “But hope is a powerful thing and this outcome will keep the slow grind of higher risk sentiment alive and well.”
Asian equity futures suggest the region’s benchmark gauges may slip when trading resumes, tracking US stocks which fell from an all-time high on Friday. Data showed US consumer sentiment deteriorated for the first time since April and inflation expectations rose.
This week, traders will be watching Japanese inflation data for guidance on whether the Bank of Japan will hike rates again this year. China’s loan prime rates will also be in focus amid expectations of more stimulus from Beijing to weather Trump’s trade war.
In New Zealand, the Reserve Bank is also expected to ease policy, with markets focused on any guidance toward additional cuts to prop up the economy.
“We expect a cut and a lower track, but there is a risk that the track disappoints markets,” ANZ Group Holdings Ltd. economists including Sharon Zollner wrote in a note to clients. “We may also see dissent and a split vote, which could be a source of near-term upside risk for interest rates.”
Elsewhere, the UK and Eurozone are expected to release inflation data while a growth reading in Germany is due. Traders will also be positioning ahead of the Federal Reserve’s annual retreat at Jackson Hole with Chairman Jerome Powell’s speech keenly watched for guidance on a September rate cut after recent US data.
“The Fed will agonize about the labor market data, the level of unemployment, inflation and all that, but they will still cut rates,” Kit Juckes, head of foreign exchange strategy at Societe Generale, wrote in a note to clients.
