Markets Overview
- ASX SPI 200 futures up 0.5% to 7,383.00
- Dow Average up 1.0% to 34,700.66
- Aussie up 0.2% to 0.7514 per US$
- U.S. 10-year yield rose 6.6bps to 2.3590%
- Australia 3-year bond yield rose 1bp to 2.20%
- Australia 10-year bond yield fell 0.8bps to 2.77%
- Gold spot up 0.9% to $1,961.67
- Brent futures down 3.1% to $117.86/bbl
Economic Events
- 11am: (AU) Australia to Sell A$1 Billion 0.25% 2024 Bonds
U.S. stocks gained as investors weighed economic resilience against the threats of rising rates and the impact of the war in Ukraine.
The S&P 500 advanced, clawing back Wednesday’s losses as all the 11 main industry groups rose. The tech-heavy Nasdaq 100 gained the most among major benchmarks, climbing 2.2%. Treasuries resumed their slide, with the 10-year benchmark yield rising as much as 10 basis points to 2.39%. Oil fell about 3% in New York, while Bitcoin climbed to a three-week high.
While bonds have suffered unprecedented losses globally, shares have rallied to levels seen before the start of the war in Ukraine. Data Thursday showed applications for U.S. state unemployment insurance fell last week to the lowest since 1969, while a measure for business activity advanced to an eight-month high in early March as fewer Covid-19 restrictions and less severe supply chain disruptions supported demand and production.
Investors are selling bonds as Federal Reserve officials warn steeper rate hikes may be necessary to subdue the hottest inflation in four decades. Fed Chair Jerome Powell explicitly put a half-point hike on the table in May if needed, saying the economy is strong enough to weather higher borrowing costs.
According to Pimco, the tightening cycle may end with the Fed hoisting its key rate to 2.75% by the end of 2023 — despite distress signals from the bond market. Chicago Fed President Charles Evans said Thursday he’s “comfortable” with raising rates in quarter-point increments, while being “open” to a 50 basis-point move if needed. The U.S. central bank raised the benchmark rate a quarter point to 0.50% last week, the first increase since 2018.
Other News
A Chinese father had the shock of his life when a supposedly dead snake inside a jar of snake wine he bought a year ago suddenly bit him.
The man from Heilongjiang Province, China, reportedly bought three jars of snake wine, believing that the drink could help cure his son, who has been suffering from a chronic illness. Instead of opening the jars, the father purportedly left them untouched for a year so that they could have “enough medicinal properties.”
After the year-long marination, the man claims he decided to finally open the jars and administer the traditional Chinese medicine, only to find that all three of the venomous snakes “came back to life” before one of them bit him.
After being rushed to the hospital, he was treated immediately and reportedly survived the incident.
Traditional Chinese medicine practitioners believe that snake wine contains several health benefits and can even be a cure for rheumatism, arthritis and the flu. The drink is often prepared by fitting a snake inside a jar of alcohol, usually rice wine, and leaving it there to marinate for months.
Some experts said that what happened to the father was not entirely strange since snakes can supposedly live inside a jar of alcohol for 12 months without dying, especially if the lid is left slightly open for air to enter.
