Markets Overview
- ASX SPI 200 futures down 0.3% to 7,277.00
- Dow Average up 0.3% to 34,837.71
- Aussie little changed at 0.6461 per US$
- U.S. 10-year yield little changed at 4.1788%
- Australia 3-year bond yield rose 6.8 bps to 3.80%
- Australia 10-year bond yield rose 8.6 bps to 4.09%
- Gold spot up 0.1% to $1,942.69
- Brent futures up 0.5% to $89.00/bbl
Economic Events
- 09:00: (AU) Aug. Judo Bank Australia PMI Servic, prior 46.7
- 09:00: (AU) Aug. Judo Bank Australia PMI Compos, prior 47.1
- 11:30: (AU) 2Q Net Exports of GDP, est. 0.3, prior -0.2
- 11:30: (AU) 2Q BoP Current Account Balance, est. A$8b, prior A$12.3b
- 14:30: (AU) Sept. RBA Cash Rate Target, est. 4.10%, prior 4.10%
Asian stocks are set to open lower Tuesday, as traders return their focus to China’s efforts to halt its economic malaise after markets in the US were shut for the US Labor Day holiday.
Futures in Japan and Australia point to shares easing on Tuesday, while Hong Kong’s Hang Seng index — which jumped more than 3% Monday before paring gains — is also set to fall. That comes after European shares failed to provide a strong lead for investors, with the Stoxx 600 gauge closing little-changed in low-volume trading after rising as much as 0.8% earlier.
China’s beleaguered property sector is getting a boost from the announcement that down-payment thresholds across the nation would be lowered, with Shanghai and Beijing seen as benefiting the most. A Bloomberg gauge of Chinese developers jumped as much as 8.7% on Monday, with sentiment improving further after news of a weekend surge in home sales in two of its biggest cities, an early sign that government efforts to cushion a record housing slowdown is helping.
On Monday, Europe’s consumer, travel and leisure and mining shares — sectors with exposure to China — advanced. Danish drugmaker Novo Nordisk A/S rose to a new record high, having just become Europe’s most valuable firm. Carmaker Mercedes Benz Group AG added 1% after unveiling a new, longer-range electric vehicle.
Markets got a boost from a US jobs report on Friday that showed a steadily cooling labor market, offering the Federal Reserve room to pause rate increases this month. Some investors are convinced the Fed won’t hike rates further this cycle, bets that were reinforced after last week’s jobs data. At the same time, this year’s US stock market rally is strong enough to withstand another leg higher for bond yields, according to the latest Markets Live Pulse survey.
Some investors are convinced the Fed won’t hike rates further this cycle, bets that were reinforced after last week’s jobs data. At the same time, this year’s US stock market rally is strong enough to withstand another leg higher for bond yields, according to the latest Markets Live Pulse survey.
While Treasury markets were closed, bond yields inched higher in the euro zone, with rate-setters seemingly divided on whether policy needs to be tightened further this month, given above-forecast inflation and sluggish growth. In a speech in London, European Central Bank President Christine Lagarde avoided signaling whether policymakers will raise or hold interest rates next week.
Other News
Australia and China will resume high-level government talks next week following a three-year hiatus, in a further step toward stabilizing the relationship between the two nations.
The Australia-China High Level Dialogue will be held in Beijing on Thursday and serves as a platform for senior representatives from industry, government, academia and other areas to discuss issues ranging from trade and investment to regional and international security, Foreign Minister Penny Wong said in a statement on Saturday.
It’s the latest sign that ties between Australia and its top trading partner are on the mend following the election of a center-left Labor government in Canberra a bit over a year ago. Beijing has lifted some restrictions on Australian goods and Prime Minister Anthony Albanese has been invited to visit.
(Bloomberg)
