To the scoreboard:
- Dow: 25,317.41 -126.93 (-0.50%)
- S&P500: 2,755.47 -12.31 (-0.44%)
- AUD/USD: 0.7084 -0.0029 (-0.41%)
- ASX SPI futures (December contracts): 5,879 (-12)
1. Global markets remained cautious overnight, following another huge surge in Chinese stocks after last Friday’s policy response by top officials in Beijing. US tech stocks climbed but the broader S&P500 edged lower ahead of a huge week of earnings, with around 160 US companies set to report.
2. Italy still volatile: Italian markets opened higher after Moody’s left Italy’s credit rating in investment grade territory on Friday night, but stocks got sold off and bond yields rose after the government said it will stick with its draft budget plans. The EU is now expected to request a revised budget plan tonight.
3. The UK pound fell back below $US1.30 amid concerns about a leadership challenge against Theresa May, before clawing back some ground as May appeared to get some breathing space for an extension in Brexit negotiations. Broader strength in the US dollar saw the AUD fall back below US71 cents.
4. US energy stocks sank more than 1% as Halliburton lowered its outlook for the rest of the year. Oil rebounded after the Trump administration outlined requirements for waivers on the pending Iran sanctions. Prices had earlier fallen after Saudi Arabia said it would not roll out an oil embargo amid tensions with Washington.
5. US 10-year bond yields held steady at around 3.2% overnight. “Transitions occurring in interest rates, and in the way trade is conducted globally, are causing investor sentiment to become unsettled,” John Stoltzfus of Oppenheimer Equity Research said.
6. Gold edged lower amid strength in the USD, while Bitcoin continues to hold steady at around $US6,500 following last week’s controversy around the Tether stable-coin, with lingering doubts among crypto investors that Tether is actually 100% backed by US dollars.
It’s a quiet data calendar today. Here’s a look at the main events:
- Weekly consumer confidence data from ANZ.
- Michelle Bullock and Guy Debelle from the RBA speak on a panel in Sydney.
- Bank of England governor Mark Carney speaks at a conference in Toronto.
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