To the scoreboard:
Dow: 24,772.01 -20.19 (-0.08%)
S&P 500: 2,682.02 -8.14 (-0.30%)
AUD/USD: 0.7664 +0.0002 (+0.03%)
ASX200 SPI futures (March 2018 contracts): 6,013 (-6)
1. US bonds get sold off: Benchmark US 10-year bond yields rose 7 basis points to 2.46% — near the highest level since March. The move came in the wake of more strong data, as new home construction rose by 3.3% in November to a 13-month high. As bond markets reassess the outlook for US growth and inflation, rising yields will be a key theme to watch in 2018. This chart from Greg McKenna shows the structural downtrend in US 10-year bond yields since 1990:
2. US dollar still out of favour: Despite more strong data and the Republican tax bill passing through US parliament, traders remain hesitant to drive the US dollar higher — particularly against the euro. The Aussie had a relatively quiet session overnight and is holding steady this morning slightly below its 200-day moving average.
3. Stocks cool off: Markets in the US and Europe dipped after strong gains in recent days, with heavier falls in the tech-focused NASDAQ index. And as the end of the year approaches, traders are increasingly betting on a long-awaited return to market volatility.
4. Data today: Domestic data today will be led by Westpac’s leading index of economic growth. Looking abroad, there’s New Zealand trade data and China is set to announce its growth blueprint for 2018. Then later tonight there’s US existing home sales.
5. Bitcoin Cash is on the move: Bitcoin Cash — the result of a hard fork of the Bitcoin blockchain in August — rose strongly overnight as Bitcoin prices fell. And as institutional money begins to chase crypto gains, a survey of fund managers shows they think Bitcoin is the most crowded trade. Meanwhile, a crypto company that made an Aussie man a billionaire — on paper — has been suspended from trading until January 3.
6. Wall Street bragging rights: Preliminary results for the 2017 investment bank league tables have been released, with JP Morgan on track to retain its mantle as the top overall investment bank. Here’s a breakdown of the leaders in each banking category.
Have a great day.