Markets Overview

  • ASX SPI 200 futures down 0.3% to 8,281.00
  • Dow Average little changed at 42,330.15
  • Aussie up 0.2% to 0.6914 per US$
  • US 10-year yield rose 3.1bps to 3.7828%
  • Australia 3-year bond yield rose 1 bp to 3.54%
  • Australia 10-year bond yield rose 1.4 bps to 3.97%
  • Gold spot down 0.9% to $2,634.91
  • Brent futures down 0.3% to $71.77/bbl

Economic Events

  • 09:00: (AU) Sept. Judo Bank Australia PMI Mfg, prior 46.7
  • 11:00: (AU) Australia to Sell A$50 Million 1% 2050 Inflation-Linked Bonds
  • 11:00: (AU) Australia to Sell A$100 Million 2% 2035 Inflation-Linked Bonds
  • 11:30: (AU) Aug. Building Approvals MoM, est. -4.3%, prior 10.4%
  • 11:30: (AU) Aug. Private Sector Houses MoM, prior 0.6%
  • 11:30: (AU) Aug. Retail Sales MoM, est. 0.4%, prior 0%

Japanese stocks were poised for a lift early Tuesday following a tepid US session as Federal Reserve Chair Jerome Powell made fresh comments signaling no urgency for further interest-rate cuts.

Nikkei 225 futures pointed to gains of about 0.7%, a day after the benchmark slumped almost 5% following the ruling party’s leadership race. Sydney shares were set to slip lower, while China and Hong Kong will be closed for holidays.

In the US, the S&P 500 closed 0.4% higher despite Powell’s cautious stance in saying the Fed will lower interest rates “over time”, while re-emphasizing that the overall economy remains on solid footing in a speech in Nashville. US equity futures edged lower in early trading.

Japanese traders are seeking to shrug off weeks of political insecurity, with Shigeru Ishiba’s victory over Sanae Takaichi wrongfooting investors betting on more monetary stimulus from his rival. A call by the new leader for a national election in a bid to consolidate his rise was broadly welcomed.

China’s benchmark index, meanwhile, posted the biggest gain since 2008 on Monday. The leap came after three of its largest cities relaxed rules for homebuyers, while the central bank also moved to lower mortgage rates as part of a sweeping stimulus package.

In the US, the S&P 500 secured its fourth-consecutive quarter of gains — the longest such winning stretch since 2021. The tech-heavy Nasdaq 100 notched a similar run.

“The bull market has survived the year’s historically weakest quarter, the third quarter, and it is likely to remain intact through at least the end of the year, as earnings remain strong, interest rates are moving lower and consumers are still spending,” said Emily Bowersock Hill at Bowersock Capital Partners.

“We expect the fourth quarter to be quite similar to the third quarter – elevated volatility, but with a strong finish,” she added.

Other News

Qatar Airways plans to take a 25% stake in Australia’s Virgin Australia Airlines Pty, expanding the Gulf carrier’s global network of equity holdings.

Qatar plans to acquire the minority stake from Virgin Australia owner Bain Capital, the companies said Monday in a joint statement. The deal is subject to regulatory approval.

The move aims to give Qatar Airways better access to a market where it was denied more connections by the government last year — a move the airline has criticized as unfair. The carrier has also announced several acquisitions in Africa, including buying a 25% stake in South Africa’s SA Airlink Pty and the pending purchase of 49% of Rwanda’s RwandAir.

Virgin Australia is trying to challenge dominant player Qantas Airways Ltd. The carrier had crumbled under the weight of A$6.8 billion in debt during the pandemic, and was rescued in 2020 by Bain in an A$3.5 billion deal that wiped out much of the claims of unsecured creditors. Bain last year postponed plans for an initial public offering for the airline.

The Doha-based carrier is also the largest shareholder of British Airways owner IAG SA, and owns about 10% of Hong Kong-based Cathay Pacific Airways Ltd. and Latam Airlines Group SA.

Virgin Group and Queensland Investment Corporation will retain shareholdings in Virgin Australia, according to the Monday statement.