Markets Overview
- ASX SPI 200 futures up 0.5% to 8,365.00
- Dow Average little changed at 43,275.91
- Aussie up 0.2% to 0.6707 per US$
- US 10-year yield little changed at 4.0828%
- Australia 3-year bond yield rose 3.9 bps to 3.85%
- Australia 10-year bond yield rose 5.9 bps to 4.31%
- Gold spot up 1.1% to $2,721.46
- Brent futures down 1.9% to $73.06/bbl
Economic Events
- 11:00: (AU) Australia to Sell A$700 Million 3.25% 2029 Bonds
- 12:00: (AU) RBA’s Hauser-Fireside Chat
Most Asian stocks are poised to rise in early trading Monday after Wall Street finished last week on fresh highs.
Equity futures in Australia, Japan and mainland China point to gains when markets reopen Monday, while those in Hong Kong slipped. US contracts rose after the S&P 500 notched up a sixth straight weekly gain, the best streak this year following a slew of corporate results and signs the world’s largest economy remains robust.
Traders will be closely watching China in early trading ahead of an expected 20 basis point reduction in the one-year and five-year loan prime rates on Monday. The cut comes as investors grow skeptical over a fleeting recovery in Chinese stocks following a swath of stimulus measures.
“How influential further easing proves to be in China and Hong Kong equities and the yuan is up for debate, as market participants may be feeling a sense of policy easing fatigue,” said Chris Weston, head of research at Pepperstone Group in Melbourne.
Oil was steady in early trading after Israel vowed retaliation towards Iran following a precise Hezbollah drone attack targeting the private residence of Prime Minister Benjamin Netanyahu. Crude dropped 8.4% last week, the biggest weekly drop in a year, as the US revived a push to end the conflict in the Middle East and as China’s oil demand slipped.
Possible escalation in the conflict comes as finance ministers and central bank chiefs gathering in Washington this week for the annual meeting of the International Monetary Fund and World Bank. Hanging over the meeting is the grinding Russia-Ukraine war and a toss-up US presidential election that offers starkly different economic outcomes for the world.
Elsewhere in Asia, traders will be closely watching the Indonesian rupiah after the nation’s new President Prabowo Subianto confirmed Sri Mulyani Indrawati will stay on as finance minister, a sign of policy continuity in Southeast Asia’s largest economy. Malaysia’s politicians are bracing for protests after committing to rolling back fuel subsidies from next year which also risk stoking inflation.
The S&P 500 rose 0.4% on Friday, notching its 47th record in 2024. Netflix Inc. jumped 11% on solid earnings while Apple Inc. climbed 1.2% as sales of its newest iPhones in China soared.
Treasury 10-year yields fell one basis point to 4.08% on Friday. The Bloomberg Dollar Spot Index slid 0.2%.
In US earnings this week, Tesla Inc. faces questions on its production targets and regulatory challenges after the unveiling of its much-hyped Cybercab failed to enthuse investors and quell concerns over its recent vehicle sales.
Boeing Co. will also have to sooth investors increasingly concerned over production delays, depleted financial resources and labor strife. Striking workers will vote on Oct. 23 to ratify a tentative agreement on a new contract the company and their union reached at the weekend, including a wage increase of 35% spread over four years.
