6 things Australian traders will be talking about this morning

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Good morning.

To the scoreboard:

  • Dow: 25,758.69 +89.37 (+0.35%)
  • S&P 500: 2,857.05 +6.92 (+0.24%)
  • AUD/USD: 0.7342 +0.0034 (+0.47%)
  • ASX200 SPI futures (September contracts): 6,311 (-3)

1. US bond yields fell sharply overnight, following reports that President Trump had criticised the Federal Reserve for its commitment to hiking rates. Trump later confirmed his views in an interview with Reuters.

2. Benchmark US 10-year bond yields fell 5 basis points to 2.82%, leaving the spread with 2-year bonds at just 23 basis points. On Friday, leading bond investor Jeff Gundlach noted there was a record amount of short positions on US 10-years, which could cause a short squeeze if the positions are forced to be unwound.

3. The US dollar drifted lower overnight amid various Trump headlines. In addition to his Fed criticism, the President also said he doesn’t expect much from this week’s China trade talks and accused China of manipulating its currency.

4. The Aussie dollar rose again amid broader US dollar weakness, and it’s holding its ground in early Asian trade amid reports from the AFR that momentum is building for Peter Dutton to challenge Prime Minister Malcolm Turnbull ahead of a critical party room meeting today.

5. US stocks rose again before closing below their intra-day highs. European markets were more buoyant after catching up with a strong US lead from Friday night, while ASX futures traders are more circumspect ahead of this morning’s open after the local index struggled for traction yesterday.

6. The NASDAQ edged lower and shares in Tesla traded flat at $US308, although JP Morgan has a price target of $US195 after the bank realised no funding had been secured for Tesla’s privatisation. Some auto industry suppliers are also concerned about Tesla going bankrupt.

Here are the key events on today’s economic calendar:

  • RBA minutes from August meeting.
  • Speech from RBA Governor Philip Lowe.
  • BHP, a2 Milk, Super Retail Group report earnings

Have a great day.

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