To the scoreboard:
Dow: 25,007.03 -171.58 (-0.68%)
S&P 500: 2,765.31 -17.71 (-0.64%)
AUD/USD: 0.7857 -0.0003 (-0.04%)
ASX200 SPI futures (March contracts): 5,934 (-34)
1. Geo-political concerns weighed on markets overnight following news that US secretary of state Rex Tillerson had been unceremoniously ousted from his post. And there are continuing reports that Trump is looking to up the ante in a potential trade war with China over allegations of intellectual property theft. Technology and energy stocks led falls in US markets.
2. Stocks initially edged higher while bond yields fell as CPI data for February showed inflationary pressures in the US remain relatively benign. Benchmark US 10-year bond yields are around three basis points lower this morning at 2.84%.
3. The Tillerson news appeared to weigh on the USD overnight, which fell sharply against the yen as the US dollar index remains stuck below 90. The heightened political risk drove a move into safe havens overnight, which was bad news for the Aussie dollar as it fell from its overnight highs after almost climbing above US79 cents.
4. The day ahead: Domestically there’s Westpac’s monthly consumer confidence survey this morning, after NAB’s business survey hit a record high yesterday. In Asian trade, there’s the Bank of Japan minutes, while China has retail sales, industrial production and urban investment. And tonight, markets will be focused on German inflation data and a speech from ECB president Mario Draghi.
5. The recent narrative around increased US shale production continued to weigh on oil prices overnight, while iron ore slipped for the eighth straight session — its worst streak in three years — but the slide appears to be slowing. In base metals, gold found a bid in the risk-off environment while copper also rose.
6. US markets get a reprieve: If you’re an investor enjoying nice returns from the combination of steady economic growth and low inflation, this may come as welcome news. In addition to this morning’s data —
which showed US inflation forces remain muted — new figures from the US labour department reveal that US wages (net of inflation) are actually weakening, not strengthening.
Have a great day.