Markets Overview
- ASX SPI 200 futures little changed at 8,891.00
- Aussie up 0.2% to 0.6554 per US$
- Australia 3-year bond yield rose 2.3 bps to 3.42%
- Australia 10-year bond yield rose 4.3 bps to 4.32%
- Gold spot up 0.8% to $3,476.07
- Brent futures up 1.0% to $68.15/bbl
Economic Events
- 11:00: (AU) Australia to Sell A$300 Million 4.25% 2034 Bonds
- 11:30: (AU) 2Q BoP Current Account Balance, est. -A$16b, prior -A$14.7b
- 11:30: (AU) 2Q Net Exports of GDP, est. 0.1, prior -0.1
ANZ Group is mulling a reduction in headcount by as many as 5,000 people as part of a wider restructuring under CEO Nuno Matos, according to a report by Capital Brief. Australia’s second-biggest pension fund has grown increasingly bearish on US Treasuries due to concerns that Washington’s policies may stoke inflation.
US stock futures staged a small rebound from a technology-led selloff, setting a steadier tone as a testing month begins with markets near record highs.
S&P 500 and Nasdaq 100 contracts advanced 0.2%, with cash trading in US stocks and Treasuries closed for the Labor Day holiday. The dollar was little changed.
Europe’s Stoxx 600 rose 0.2%. BAE Systems Plc and Rheinmetall AG led advances in defense shares after the Financial Times reported that Europe is working on detailed plans for potential post-conflict deployments in Ukraine. Asian equities were mixed, with a 19% surge in Alibaba Group Holding Ltd. contrasting with a slump in chipmaking shares.
In commodity markets, silver rose above $40 an ounce for the first time since 2011. Gold inched closer to an all-time high as optimism grew for an interest rate cut by the Federal Reserve this month.
Wall Street’s rally to all-time highs faces a crucial stretch, with jobs numbers, inflation data and the Fed’s rate call all landing within the next three weeks. The flurry of events will help determine whether stocks can extend gains or lose momentum as traders navigate what is historically the weakest month of the year for US markets.
Tariff tensions and questions over the Fed’s independence are compounding the risks.
“The bar to derail a Fed Rate cut on Sept. 17 appears high,” Deutsche Bank AG economist Peter Sidorov wrote. “But with Fed funds futures now pricing over 140 basis points of easing by the end of 2026, markets are expecting an amount of easing that since the 1980s has only occurred around recessions.”
Evercore ISI strategists led by Julian Emanuel argue that investors shouldn’t be unsettled by a bull-market pullback, projecting a 20% gain in the S&P 500 by the end of 2026. They add that market “scares” are to be expected, and view short-term turbulence as an opportunity to increase exposure.
European bonds weakened broadly, with a week to go before a confidence vote that could topple France’s government. The French-German 10-year spread, a key measure of risk, was little changed at 79 basis points. The gauge closed at 82 on Aug. 27, the highest since January.
“I wouldn’t be surprised to see the spread between Germany and France test 100 basis points,” said Alexandre Baradez, chief market analyst at IG in Paris. “This could encourage further profit selling in European banking stocks, moreover since the European Central Bank seems to be on pause when it comes to rate cuts.”
A stronger economic outlook is set to help European equities escape their narrow trading range, according to top Wall Street strategists.
Goldman Sachs Group Inc. expects the Stoxx 600 to climb about 2% to 560 by year-end, supported by improving growth prospects, light positioning, and relatively attractive valuations. JPMorgan Chase & Co. strategist Mislav Matejka sees the recent loss of momentum as a “healthy” development.
Elsewhere, Indonesian stocks tumbled the most in nearly five months as political risks flared, with President Prabowo Subianto canceling a China trip after deadly unrest over living costs and inequality. Stress also was evident in the bond market, with yields on the nation’s 10-year government note rising to the highest in almost three weeks.
