6 things Australian traders will be talking about this morning

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Good morning.

To the scoreboard:

Dow: 26,071.72 +53.91 (+0.21%)
S&P 500: 2,810.30 +12.27 (+0.44%)
AUD/USD: 0.7998 -0.0001 (-0.01%)
ASX200 SPI futures (December contracts): 5,980 (+30)

1. The US government shut down on Friday after Congress failed to pass a temporary funding bill. Lawmakers will meet for further debate later today, although Goldman Sachs isn’t too worried about the economic impact. And Germany’s SDP party has agreed to further talks on a ruling coalition. That’s helped to push the euro slightly higher in early trade although the moves have been limited.

2. The week ahead: It’s a quiet schedule domestically, and currency markets will be positioning ahead of the European Central Bank’s Thursday night meeting — where it’s expected to confirm whether or not it will end asset purchases in September. The Bank of Japan’s interest rate decision tomorrow will also get extra attention after it made a surprise bond-purchase tapering announcement earlier this month.

3. US bond yields hit three-year high: Benchmark US 10-year bond yields closed on Friday at 2.66%, which capped a weekly rise of 10 basis points amid mild concern over the government shutdown and increasingly optimistic global growth expectations — and by extension inflation.

4. But US stocks shrugged off both rising bond yields and the risk of a shutdown, climbing to new record highs on Friday as money continues to pile in to start the year. Gains extended to global markets as Germay’s DAX index climbed by more than 1%, and the buoyant mood looks set to extend to the local market today.

5. Iron ore bounced off the mat — helped by higher steel prices — with a 2.5% gain to end the week which offset some of the previous days’ falls. Oil fell by 1% but remains elevated just shy of the $US70 a barrel market — a three year high — while in base metals both gold and copper drifted lower on Friday night.

6. Cryptos start the week in the red: Market volatility continues as Bitcoin pushed well above $US12,000 over the weekend, but has subsequently slumped to around $US11,000 with other major alt-coins also lower. As the looming threat of further government control measures hangs over the market, US regulators announced on Friday they are now analysing cryptocurrencies with a “fine tooth comb“.

Have a great week.

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