Markets Overview

  • ASX SPI 200 futures up 0.2% to 8,479.00
  • Dow Average up 0.4% to 44,910.65
  • Aussie up 0.3% to 0.6518 per US$
  • US 10-year yield fell 9.4bps to 4.1685%
  • Australia 3-year bond yield little changed at 3.91%
  • Australia 10-year bond yield fell 2.1 bps to 4.34%
  • Gold spot up 0.2% to $2,643.15
  • Brent futures down 1.3% to $71.84/bbl

Economic Events

Asian stocks are poised for cautious gains after US shares rose on Friday and as global markets enter a seasonally strong period. Developing nation assets will be in focus after further tariff threats from US President-elect Donald Trump.

Equity futures in Australia, Hong Kong and mainland China point to early gains when markets resume trading on Monday, while contracts in Japan were steady. US stocks rose 0.6% on Friday to cap their best month this year. The dollar was steady against major currencies in early trading Monday, while Australia’s 10-year yield slipped.

The dollar has weakened each December for the past five years, while global stocks have strengthened an average 2.5%, data compiled by Bloomberg show. That trend may take time to play out this month amid focus on data including European economic activity and US jobs ahead of meetings from eight of the 10 major central banks, with traders split on their likely outcomes, according to Pepperstone Group.

“Reduced liquidity will be a factor as we roll through the month, but so could a potential performance chase from active managers to beat their set benchmark, with end-of-year rebalancing flows also due to impact,” said Chris Weston, head of research at Pepperstone in Melbourne. “When these dynamics reconcile with uncertainty as to various central banks’ next move, anyone hoping for a quiet last month of the calendar year may be disappointed.”

Emerging market assets including China’s yuan and South African rand may face volatility after Trump warned BRICS nations he will require a commitment that they won’t create a new currency, or favor another in a bid to displace the US dollar in global trade. Should they not meet Trump’s demands, he threatened to lob 100% tariffs on their goods entering the US.

“A somewhat perplexing target for tariffs, but I’m hesitant to think this rhetoric sees an immediate impact on the US dollar,” Weston said. “But it certainly showcases that Trump is fine with weaponizing the US dollar and using tariffs liberally and at any time.”

Trump’s pick for his Treasury secretary earlier this month had fueled optimism that tariffs will be measured, boosting US stocks and bonds, and sapping dollar strength. US stocks climbed 5.7% in November for the best month of this year, while the Bloomberg Dollar Spot Index declined more than 1% last week, snapping eight weeks of gains.

Chinese activity data released at the weekend showed factory activity continued to expand in November. That adds to tentative signs of economic recovery since October after a raft of stimulus measures including interest-rate cuts were announced in late September.

In Japan, Bank of Japan Governor Kazuo Ueda said interest-rate hikes are “nearing” as inflation and economic trends develop in line with the central bank’s forecasts. Ueda’s comments helped strengthen the yen in late trading Friday in New York. The Japanese currency surged more than 3% last week as bets on a December rate hike rose following data showing inflation in Tokyo accelerating more than expected.

“We expect the market to further increase pricing for a 25 basis point rate hike at the BOJ December meeting because of another solid Japanese labor cash earnings report” due Friday, Commonwealth Bank of Australia strategists led by Joseph Capurso wrote in a note to clients. Ueda’s comments suggest a rate hike may be considered at the meeting, they wrote.

In corporate news, BlackRock Inc. is nearing a deal to buy HPS Investment Partners at a value of $12 billion or more and catapult itself into the top ranks of private credit, according to people with knowledge of the matter. Nissan Motor Co. Chief Financial Officer Stephen Ma is set to step down from his position, people with knowledge of the matter said, marking yet another executive change as the company sheds jobs and cuts manufacturing capacity.