To the scoreboard:
Dow: 22,268.34 +64.86 (+0.29%)
S&P 500: 2,500.23 +4.61 (+0.18%)
AUD/USD: 0.7996 -0.0008 (-0.10%)
ASX200 SPI futures (Sept contracts): 5,708 (+16)
Iron ore benchmark 62% fines: $US72.97/t (-1.02%)
1. Positive start for Aussie stocks? The ASX200 looks set for a better opening this morning after a rough session on Friday. A strong lead from the US appears to be giving futures traders confidence, although last week the local index struggled to rally despite gains in the US market. US stocks remain buoyant, with the S&P500 edging higher for the fourth time in five session to end the week above 2,500 for the first time.
2. Pound breaks higher again: The US dollar index struggled again on Friday after retail sales and industrial production data missed forecasts. The UK pound rose strongly for the second straight day, hitting its highest level since last year’s Brexit vote following more bullish comments from Bank of England (BoE) members on the outlook for interest rates. The AUD has dipped just below US80 cents this morning but was broadly unchanged in Friday’s session. Here’s the move in the pound:
3. Bond yields on the move: The yield on UK 10-year notes rose by almost 30 basis points over the course of last week to close above 1.3%. While those moves were driven by a more hawkish BoE, it was part of a broader move across major markets as the imminent North Korea threat appears to have faded and central banks remain on track to tighten monetary policy. Benchmark US 10-year treasuries are back above 2.2% for the first time since early August.
4. Bitcoin rallies back: Following a price-crash last week stemming from a regulatory crackdown in China, Bitcoin staged an impressive 15% rally over the weekend. While we’re on cryptos, if initial coin offerings (ICOs) have you intrigued, concerned or even bemused, this is interesting — a lot of the funding may be coming from Bitcoin millionaires who don’t want to pay any tax.
5. The week ahead: It’s a quieter week of data ahead in Australia, with most of the focus on the RBA. There’s the minutes from the bank’s September meeting tomorrow, and speeches from assistant governor for economics Luci Ellis (Wednesday) and governor Philip Lowe (Thursday). Internationally it’s a busier week, led by the US Federal Reserve’s interest rate decision on Wednesday night. The full calendar is here.
6. Iron ore dips again: Thursday’s mediocre data prints in China continued to weigh on iron ore futures on Friday, and spot prices for benchmark 62% fines closed another 1% lower. Base metals were also down as last week’s copper sell-off continued after it had reached a 3-year high. Oil continued its recent climb and is trading around its highest level since April, with benchmark crude closing the week at $US55.62 a barrel.
Have a great week, I’m on Twitter @Mr_SamJacobs.