To the scoreboard:
Dow: 21,703.75 +29.24 (+0.13%)
S&P 500: 2,428.37 +2.82 (+0.12%)
AUD/USD: 0.7936 +0.0009 (+0.11%)
ASX200 SPI futures (Sept contracts): 5,684 (+4)
Iron ore benchmark 62% fines $US79.93/t (+2.55%)
1. All calm for the eclipse? It’s more likely that markets are awaiting this week’s annual meeting of central bankers at Jackson Hole — but either way there was little action overnight, with the main moves seen in more selling of the US dollar. Markets are still unsure about the future direction of the greenback, as the euro climbed back above $US1.18 and the yen strengthened. The Aussie dollar lost ground against most major currencies but ticked higher against the USD.
2. Calm, with a pinch of risk-off: In addition to demand for the yen (USD/YEN is under 109 — back near 2017 low), gold also moved higher. A short time ago it was trading at $US1,297 an ounce, after briefly clearing $US1,300 last week for the first time since before the US election. Yields on benchmark US treasuries remain anchored just below 2.2%.
3. US stocks go nowhere: And if you think a correction on the S&P500 is imminent, Goldman Sachs’ technical strategists beg to differ — their charts are telling them that the current market still has a way to run before a correction of 10% or more. Futures traders have the local market little changed as earnings season continues, with BHP’s annual results set to be the headline act today.
4. The iron ore herd is stampeding: Benchmark 62% fines have surged by 9.5% in three days, and prices have now climbed by 50% from their low of $US53.36 a tonne on June 13. Analysts from Westpac and CBA expect that iron ore’s gains unlikely to run much further. Either way the recent rally makes for a nice 2017 roller-coaster chart:
5. Crypto-capital changing hands: Bitcoin’s rally has paused for the moment, with prices dipping back below $US4,000 overnight. Traders appear to be booking gains, as off-shoot Bitcoin Cash also fell heavily after it surged over the weekend. While Bitcoin cooled off, money moved back into Ethereum which climbed from its recent range below $US300 to as high as $US340 overnight.
6. Dalio voices concern: Billionaire hedge fund manager Ray Dalio published a post overnight to voice his concern about the current state of the US political climate — and markets should beware. Dalio wrote that the deep societal divisions are unlikely to be handled well, and the prospect of a socio-political crisis “will have a greater effect on the economy, markets and our overall well-being than classic monetary and fiscal policies”.
Bonus item: Goldman Sachs CEO Lloyd Blankfein used the occasion of the solar eclipse to fire off a cryptic tweet.
Enjoy your day, I’m on Twitter @Mr_SamJacobs.