To the scoreboard:
- Dow: 24,706.41 -193.00 (-0.78%)
- S&P 500: 2,711.45 -18.68 (-0.68%)
- AUD/USD: 0.7471 -0.0056 (-0.73%)
- ASX200 SPI futures (June contracts): 6,093 (-7)
1. Bond yields spike: The 10-year US treasury yield jumped by eight basis points to its highest level since 2011. 10-year yields climbed as high as 3.08% on the back of strong economic data.
2. US retail sales rose for a second month in April, with a steady gain of 0.3% while March growth was revised higher to 0.8% from 0.6%. And the New York Fed’s manufacturing index showed the strongest growth since 2011.
3. With higher bond yields and more soft European data (German GDP missed expectations), the euro fell and the US dollar index pushed above 93 for the first time this year. Broader USD strength weighed on the Aussie, which is back under US75 cents ahead of key data today.
4. It’s wages day in Australia, with the quarterly wage price index scheduled for 11:30am AEST. It’s become one of the most important data releases in Australia, given both the Reserve Bank and the federal government are relying on a pickup in wages to drive economic growth. David Scutt’s 10-second guide has everything you need to know.
5. Gold fell through the bottom of its recent trading range and is below $US1,300 an ounce for the first time this year. Brent crude climbed above $US79 a barrel but retreated after US bond yields spiked. And iron ore just had its biggest one-day fall in months.
6. US stocks came under pressure amid the rise in bond yields. AxiTrader’s Greg McKenna said this morning that the charts suggest a further move lower, but the overnight falls were relatively muted and ASX futures traders have only taken seven points off the local index ahead of this morning’s open.
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