Markets Overview
- ASX SPI 200 futures up 6.7% to 7,898.00
- Dow Average up 7.9% to 40,608.45
- Aussie up 3.3% to 0.6155 per US$
- US 10-year yield rose 4.3bps to 4.3354%
- Australia 3-year bond yield fell 9.3 bps to 3.25%
- Australia 10-year bond yield rose 16 bps to 4.39%
- Gold spot up 3.3% to $3,082.75
- Brent futures up 4.8% to $65.84/bbl
Economic Events
- 10:30: (AU) Australia to Sell A$1 Billion 77-Day Bills
- 10:30: (AU) Australia to Sell A$1 Billion 133-Day Bills
- 11:00: (AU) Australia to Sell A$100M 0.25% 2032 Inflation-Linked Bonds
- 11:00: (AU) April Consumer Inflation Expectation, prior 3.6%
- 20:00: (AU) RBA’s Bullock-Speech
US stocks posted the best day since the financial crisis after President Donald Trump paused some reciprocal tariffs in a move that jolted the bond market and lifted Asian equity futures.
The S&P 500 rallied 9.5%, its best session since 2008, after Trump announced the reprieve, even as he hiked tariffs on China further. The Nasdaq 100 soared 12%, with both benchmarks clawing back some of the losses of the past week. Equity index futures for Japan and Australia advanced.
Trump called the world’s biggest debt market a thing of beauty on Wednesday as his about-face on trade policy sparked huge swings in bonds. The yield on short-dated US debt jumped sharply as equities rallied while that on 30-year debt fell by a smaller margin. An index of the dollar declined for a third session. The yen and Swiss franc were stable early Thursday after weakening against the dollar Wednesday.
The moves extended the volatile trading across global markets over the past week as investors grappled with the fallout from Trump’s reciprocal tariffs and sudden policy changes. Trump announced a 90-day pause on higher reciprocal tariffs that hit dozens of trade partners after midnight, while raising duties on China to 125%.
“It’s been a roller-coaster ride for the past week and we know one thing is for certain: if there’s any certainty in investing, that one certainty is that markets and investors don’t like uncertainty,” said Ryan Nauman at Zephyr. “That’s what we’ve seen — the tariffs have been unpredictable. And now we’re seeing the bounce today, which I think is really a relief rally, buying the dip.”
Declines for short-dated Treasuries, a popular place investors have parked capital during market turmoil, were amplified as investors dumped havens on fear of missing out on the equity rebound. The yield on two-year Treasuries soared higher by as much as 30 basis points, as traders trimmed rate-cut bets. The US 10-year yield ended Wednesday four basis points higher after an intraday selloff that began in Asia and at one point added 22 basis points to the yield.
Less than an hour before Trump’s remarks, a $39 billion sale of 10-year notes drew good demand — despite concern by some in the market that his policies might deter foreign buyers. That followed a tepid reaction to a sale of three-year notes on Tuesday, and paints a rosier backdrop for Thursday’s 30-year bond auction.
Amid the volatility of previous sessions some market-watchers counseled caution in reading too much into the bull case. Trump’s tariff threats may have damaged the ability of corporate managers to plan for the future and dented international relations to a point where global economic growth remains in lasting doubt.
“The 90-day pause is an encouraging sign that negotiations with most countries have been productive,” said Mark Hackett at Nationwide. “It also injects some much-needed stability into a market rattled by uncertainty. That said, we’re not out of the woods yet. Avoid the temptation to chase momentum and keep emotions in check.”
In Asia, data set for release Thursday includes inflation and producer prices in China, an interest rate decision in the Philippines and trade data for Taiwan. Markets are closed in India.
West Texas Intermediate, the US oil benchmark, rose more than 4% Wednesday while gold climbed 3.3% to around $3,082 and was steady early Thursday.
