Markets Overview

  • ASX SPI 200 futures up 0.4% to 7,300.00
  • Dow Average little changed at 35,227.69
  • Aussie down 0.7% to 0.6734 per US$
  • U.S. 10-year yield fell 1.4bps to 3.8349%
  • Australia 3-year bond yield rose 3.8 bps to 3.95%
  • Australia 10-year bond yield rose 6 bps to 4.01%
  • Gold spot down 0.4% to $1,961.94
  • Brent futures up 1.8% to $81.07/bbl

Economic Events

  • 09:00: (AU) July Judo Bank Australia PMI Servic, prior 50.3
  • 09:00: (AU) July Judo Bank Australia PMI Compos, prior 50.1
  • 09:00: (AU) July Judo Bank Australia PMI Mfg, prior 48.2

Equities look primed for early gains Monday as markets open in Japan and Australia, before sentiment turns more cautious when trading gets underway in China.

Futures for stocks in Tokyo indicate an advance of more than 1% following a report late Friday that Bank of Japan officials see little urgent need to address the side effects of their ultra-loose monetary policy. The yen was little changed after weakening more than 2% last week, with sharpest part of the move coming after the BOJ news.

Contracts for Australia’s benchmark also rose while those for Hong Kong fell and an index of US-listed Chinese shares eked out a small increase. Futures for the S&P 500 were steady after the gauge closed little changed on Friday. Contracts for the Nasdaq 100 rose 0.1% following continued selling in technology companies on Friday after a disappointing batch of results earlier in the week.

Earnings and central bank decisions will be in focus this week. US heavyweights including Alphabet Inc., Exxon Mobil Corp. and Meta Platforms Inc. are due to report, while in Asia investors will be watching names including Samsung Electronics Co., Rio Tinto and Hitachi Ltd.

Traders are positioning for the Federal Reserve and the European Central Bank to raise interest rates and to signal whether more hikes are likely. The BOJ is projected to stand pat, letting the rate gap with its peers widen as it waits for sustainable inflation.

Attention in Chinese markets this week is on any further government stimulus as the Politburo meets. Expectations among global fund managers are low as Beijing tries to prop up growth without the kind of strong action that may create asset bubbles. Chinese stocks notched their worst week in four on Friday, despite a series of vows to boost consumption and businesses.

The yield on the 10-year Treasury note edged down to 3.83% on Friday, leaving it little changed for the week. Meanwhile, the yield on the policy sensitive two-year Treasury was little changed Friday at 4.84%.

In commodities, wheat futures dropped Friday as Ukraine made preparations to continue a grain-export deal, which Russia exited this week. Oil notched its fourth weekly gain amid tentative signs that global markets are tightening. And gold slipped against a stronger dollar on Friday, paring gains made earlier in the week.

Other News

McDonald’s Corp. plans to spend more than A$1 billion ($673 million) on opening and renovating stores in the company’s biggest expansion plans for Australia since the 1990s, according the Australian Business Review.

The fast food giant plans to spend about A$600 million on 100 new stores in the country over the next three years, and about A$450 million refurbishing over half of its current network, the paper said, citing Australian CEO Antoni Martinez.

McDonald’s currently has 1,020 stores in Australia and employs 115,000 people, it said. The expansion is expected to generate 40,000 new jobs, the paper said.

(Bloomberg)