To the scoreboard:
- Dow: 25,333.82 -81.37 (-0.32%)
- S&P 500: 2,813.36 -2.93 (-0.10%)
- AUD/USD: 0.7404 -0.0025 (-0.34%)
- ASX200 SPI futures (September contracts): 6,200 (-26)
1. As expected, the US Federal Reserve held its benchmark interest rate unchanged. The central bank noted the economy was growing at a “strong” pace in its latest remarks, and remains on track for another rate hike in September.
2. Global bond yields continued to edge higher in the wake of the announcement, with benchmark US 10-year yields climbing back over 3% this morning. Bond yields in Australia and Japan also rose.
3. There could be another escalation in US-China trade tensions, following reports the Trump administration is preparing to increase the size of proposed tariffs on an additional $200 billion worth of Chinese goods to 25% from 10%.
4. Activity in US stocks was fairly muted, with trade war fears offset by tech gains as Apple rose by almost 6%. Financial stocks also benefited from higher bond yields. Tesla reported a bigger loss than expected and its stock fell in after-hours trade.
5. Brent crude oil fell by more than 2% amid an increase in Saudi production and an unexpected buildup of US oil inventories. Gold dipped to a one-year low, copper fell by 2% and iron ore got hammered. Lower commodity prices weighed on the Aussie which briefly dipped back below US74 cents this morning.
6. And amid escalating trade fears, JP Morgan updated its global manufacturing PMI numbers, following a raft of PMI releases to start the new month. The latest measure fell to 52.7 from 53 — the lowest reading of the year.
Here’s today’s data calendar:
- Australia has trade data, with the market forecasting a $900 million surplus.
- The Bank of England makes its interest rate announcement.
- Factory orders and ISM manufacturing data in the US.
Have a great day.
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