Markets Overview

  • ASX SPI 200 futures little changed at 7,939.00
  • Dow Average little changed at 40,974.97
  • Aussie up 0.2% to 0.6725 per US$
  • US 10-year yield fell 7.6bps to 3.7552%
  • Australia 3-year bond yield fell 3.1 bps to 3.57%
  • Australia 10-year bond yield fell 5.2 bps to 3.95%
  • Gold spot up 0.1% to $2,495.84
  • Brent futures down 1.4% to $72.70/bbl

Economic Events

  • 10:30: (AU) Australia to Sell A$1 Billion 98-Day Bills
  • 10:30: (AU) Australia to Sell A$1 Billion 63-Day Bills
  • 11:30: (AU) July Exports MoM, prior 1.7%
  • 11:30: (AU) July Imports MoM, prior 0.5%
  • 11:30: (AU) July International Trade Balance, est. A$5b, prior A$5.59b
  • 13:05: (AU) RBA’s Bullock — Speech to Anika Foundation

The effects of a rally in Treasuries spread across Asian markets Thursday, weakening the dollar and supporting the yen as investors prepared for Federal Reserve interest-rate cuts later this month.

The yield on the 10-year Treasury note fell eight basis points Wednesday, as a slowdown in the US labor market boosted Wall Street’s bets on Fed rate cuts. The move weakened an index of dollar strength, and sent the yen sharply higher. The Japanese currency extended those gains early Thursday, while Australian and New Zealand bonds tracked their US peers.

Asian equity futures were mixed. Contracts for Japan fell more than 1%, while those for Australia and Hong Kong were little changed. The S&P 500 and Nasdaq 100 ended Wednesday 0.2% lower as Nvidia Corp. saw its worst two-day plunge since October 2022 amid a report about the US Department of Justice sending out subpoenas as part of an antitrust probe.

Across Wall Street, economists and money managers have been scouring economic data for signs of weakness that would force the Fed to kick off an aggressive rate-cutting cycle. The moves in Treasuries were partly driven by a reading on job openings, known as JOLTS, which trailed estimates and hit the lowest level since 2021. The report comes ahead of Friday’s hotly anticipated payrolls data.

“The markets may not be as nervous as they were a month ago, but they’re still looking for confirmation the economy isn’t cooling off too much,” said Chris Larkin at E*Trade from Morgan Stanley. “So far this week, they haven’t gotten it.”