To the scoreboard:
- Dow: 25,191.43 -125.98 (-0.50%)
- S&P500: 2,740.69 -15.19 (-0.55%)
- AUD/USD: 0.7085 +0.0013 (+0.18)
- ASX SPI futures (December contracts): 5,815 (no change)
1. US stocks fell sharply in the first hour, before clawing back ground in a volatile session overnight. Investors bought the dips amid rising fears over a slowdown in global growth and Italy’s debt crisis.
2. It followed a rough session on Asian markets, as the two-day rally in Chinese stocks ran out of steam. Falls extended to the UK and Europe and the Euro STOXX600 fell to its lowest level since December 2016. ASX futures are pointing flat after the local index lost over 1% yesterday.
3. The European Union has rejected Italy’s draft budget. In an unprecedented move, the EU said it had “no alternative” because the current budget is in breach of spending rules. Italian bond yields jumped following the news, and Goldman Sachs has warned that the market turmoil in Italy could get worse from here.
4. Oil had its biggest one-day fall since July, as prices slumped almost 5% after Saudi Arabia pledged to boost oil output more quickly if needed. Copper prices lost ground while iron ore continues to march higher.
5. US industrial companies 3M and Caterpillar — both seen as key benchmarks for economic activity — fell sharply following Q3 earnings updates, with Caterpillar warning that tariffs would push up its costs.
6. Safe-haven assets found demand, as US 10-year bond yields fell as low as 3.11% in the initial stock selloff before rising back to 3.17%. Gold edged higher along with the Japanese yen, while the AUD traded in a tight range against the greenback.
Here’s a look at today’s economic calendar:
- October PMI surveys for Japan, Europe and the US.
- Bank of Canada rates announcement (expected to hike rates to 1.75%).
- US Fed Beige Book.
- New homes sales data in the US.
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