Markets Overview

  • ASX SPI 200 futures up 0.4% to 8,760.00
  • S&P 500 up 0.5% to 6,448.26
  • Dow Average little changed at 45,271.23
  • Aussie up 0.4% to 0.6544 per US$
  • US 10-year yield fell 4.4bps to 4.2168%
  • Australia 3-year bond yield rose 7.5 bps to 3.53%
  • Australia 10-year bond yield rose 6.1 bps to 4.42%
  • Gold spot up 0.7% to $3,559.52
  • Brent futures down 2.5% to $67.38/bbl

Economic Events

  • 10:30: (AU) Australia to Sell A$1 Billion 63-Day Bills
  • 10:30: (AU) Australia to Sell A$1 Billion 161-Day Bills
  • 11:00: (AU) RBA’s Hauser-Interview
  • 11:30: (AU) July International Trade Balance, est. A$4.9b, prior A$5.37b
  • 11:30: (AU) July Household Spending MoM, est. 0.5%, prior 0.5%
  • 11:30: (AU) July Exports MoM, prior 6.0%
  • 11:30: (AU) July Imports MoM, prior -3.1%
  • 11:30: (AU) July Household Spending YoY, est. 5.0%, prior 4.8%

Reserve Bank of Australia staff are “feeling the weight” of its technological transformation agenda, Governor Michele Bullock said, adding that the use of big data and artificial intelligence has the potential to transform policy making.

Asian equities were primed to rise Thursday after weak US job openings reinforced bets on a Federal Reserve rate cut, boosting stocks and bonds on Wall Street.

Contracts for equity index futures from Japan and Australia rose, while mainland China contracts were little changed. Both the S&P 500 and the Nasdaq 100 gained Wednesday, powered by big tech with Alphabet Inc. shares hitting a new record and Apple Inc. rising to the highest in around six months. The iPhone-maker plans to launch an AI-powered web search tool for Siri next year.

With job openings falling to a 10-month low, traders were now almost fully pricing in a September Fed cut and and projecting at least two reductions in 2025. The shift lifted equities, snapping a two-day losing streak for the S&P 500 just 48 hours before a pivotal US payrolls report.

“This data point does confirm the slowing pace of hirings being seen in a variety of stats in the aggregate, but something we’re well aware of — and why the Fed is cutting rates by 25 basis points in two weeks,” said Peter Boockvar at The Boock Report.

Gains for Treasuries on Wednesday eased earlier selling pressure that put the 30-year yield close to 5% in a sign of investor concern about the US fiscal outlook. A new high for gold and weekly survey data showing Treasury short wagers at the highest since February indicated these concerns are not completely alleviated.

In Asia, data set for release include trade and household spending in Australia, inflation for Thailand and a rate decision in Malaysia where policymakers are expected to keep interest rates unchanged.

In China, Beijing started imposing levies on additional US optical fiber imports on anti-dumping concerns. Elsewhere, Hong Kong is probing allegations of insider dealing at the stock exchange and the city’s financial regulator as well as brokers and social media influencers, according to people familiar with the matter.

Federal Reserve Governor Christopher Waller said on CNBC that the central bank should begin lowering rates in September and make multiple cuts in coming months, adding that officials could debate the precise pace of reductions.

“Today’s report is the latest data point that helps tip the Fed’s scale toward a rate cut,” said Bret Kenwell at eToro. “But in the long-term, investors should not cheer for notable labor-market weakness for the sole benefit of lower rates.”

Economists project about 75,000 jobs were added in August, based on the median of a Bloomberg survey, while the jobless rate is seen at 4.3%. Four straight months of sub-100,000 payrolls growth would mark the weakest such stretch since the onset of the pandemic in 2020.

“A large downside surprise in labor market data could push rates sharply lower given the concern around the Fed’s labor mandate,” said TD Securities strategists including Oscar Munoz and Gennadiy Goldberg. “We remain biased long on dips and expect rates to move lower throughout the year.”