6 things Australian traders will be talking about this morning

(Matthias Hangst / Getty Images)

Good morning.

To the scoreboard:

  • Dow: 25,379.45 -327.23 (-1.27%)
  • S&P500: 2,768.78 -40.43 (-1.44%)
  • AUD/USD: 0.7102 -0.0007 (-0.10%)
  • ASX SPI futures (December contracts): 5,871 (-51)

1. US stocks fell for a second straight day, with the selloff accelerating overnight as markets continued to assess whether the US Fed will tighten monetary policy at a faster rate than expected. Lingering trade fears and further doubts over Italy’s government debt also clouded sentiment.

2. The risk-off tone, along with the prospect of continued Fed rate hikes, helped bolster the US dollar. Money also flowed into the safe-haven Japanese yen, while emerging market currencies got sold off sharply against the greenback. The AUD found buyers in London trade before falling back.

3. US 10-year bond yields continued to consolidate in a higher range, climbing to 3.217% before easing back to around 3.17%. And Italian 10-year yields rose to a four-year high as the EU warned Italy’s draft budget was in breach of Eurozone fiscal spending rules.

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4. Oil’s slide continued, as brent crude fell back below $US80 a barrel following the mid-week report which showed US oil inventories rose for a fourth straight week. Iron ore’s rally rolls on while Bitcoin and the other major cryptos lost some ground.

5. Before the overnight selloff on the S&P500, Chinese stocks tanked again yesterday and have now fallen to the lowest level since 2014. Prices collapsed into the close as the Shanghai Composite finished 2.94% lower, with falls led by the energy sector.

6. And if the current turmoil in stocks doesn’t phase you, then the explosion of leveraged loans in the global financial system just might. It’s on the radar of central banks, and JP Morgan says the “seeds of a distressed environment are being sown”. BI’s editor Paul Colgan has more here.

Today’s economic calendar:

  • China Q3 GDP and retail sales data.
  • Japanese inflation.
  • Canada inflation and retail sales.
  • Speech from Bank of England governor Mark Carney at Economic Club of New York.
  • Speeches from Kaplan and Bostic of the US Fed.

Have a nice weekend.

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