To the scoreboard:
Dow: 26,460.65 -156.06 (-0.59%)
S&P 500: 2,852.48 -20.39 (-0.71%)
AUD/USD: 0.8095 -0.0015 (-0.18%)
ASX200 SPI futures (March contracts): 5,989 (-21)
1. Bond selloff picks up steam: Benchmark US 10-year bond yields remain above the 30-year bull market trend line, as more selling saw yields peak at 2.73% overnight — the highest level since April 2014.
2. Stocks wobble: US markets cooled off as risk-appetite declined overnight. The S&P500 has notched up 14 record highs in the month of January, but Macquarie analysts said traders should prepare for volatility this year as global central banks continue to withdraw liquidity. And Goldman Sachs say there’s a “high probability” of a market correction in the months ahead.
3. US dollar stabilises: The greenback finally found some buyers overnight, posting gains against the major currencies with the UK pound the worst performer amid some concerns over Brexit while the AUD hung tough.. A stronger session for the USD may have been partly due to rising bond yields, although Business Insider’s David Scutt pointed out yesterday that the connection between the USD and treasury yields isn’t as strong as it once was.
4. The day ahead: Local data will be led by NAB’s widely-read monthly business survey, which declined sharply in December. Japan has retail sales and unemployment data, then tonight the focus will turn to Europe with Q4 GDP figures for the Eurozone and German inflation data. There’s also speeches by Bank of England Governor Mark Carney and ECB board member Yves Mersch, while it’s a quieter day ahead in the US.
5. Most major cryptocurrencies declined overnight, although the moves were relatively limited by crypto standards and Bitcoin is holding in its recent range above $US11,000. The global head of Deutsche Bank’s asset management division says there’s a realistic risk Bitcoin investors could lose all their money, but that hasn’t stopped more than one million people signing up to the trading app Robinhood since it added crypto-trading to its service.
6. A stronger US dollar was one of the factors that drove oil lower overnight, with prices for benchmark crude closing 1.6% lower to fall back below $US70 a barrel. Strength in the USD also weighed on gold prices, while iron ore fell for the second straight session although futures markets are pointing higher for the day ahead.
Have a great day.