To the scoreboard:
Dow: 23,541.14 -49.69 (-0.21%)
S&P 500: 2,598.78 -0.25 (-0.01%)
AUD/USD: 0.7615 +0.0037 (+0.49%)
ASX200 SPI futures (December contracts): 6,006 (+6)
1. Dovish Fed drives USD lower: Minutes from the US Federal Reserve’s November meeting showed committee members still have doubts about a rise in inflation. A December rate hike is still on the cards, but the outlook for further rate hikes in 2018 is now more uncertain which may add to downside pressure on the USD ahead of the Fed’s next meeting on December 13.
2. Bonds react: US government bonds saw demand in the wake of the Fed minutes, with yields on benchmark 10-years and shorter-term 2-year debt both falling by 4-5 basis points. US durable goods orders also missed expectations. The synchronised fall means the US 2-10 yield curve remains near a 10-year low at less than 60 basis points.
3. Oil on the move: Both benchmark crude and US WTI are up by 1% with sources suggesting to Reuters that Saudi Araba will successfully lobby for a nine-month extension to the OPEC supply cuts next Thursday. In addition, weekly inventory data from the US showed oil stocks fell by 1.85 million barrels last week with only a small rise in refined gasoline inventory.
4. Global shares calm: Stocks in the US and UK were flat, with little in the UK budget overnight that was of interest to markets. Leveraged stock investments by US hedge funds are at their highest level since 2009, and Goldman has compiled the top 10 hedge fund plays for both long and short positions (via Bloomberg).
5. Iron ore goes on the charge: A pickup in steel prices drove a 4% surge in prices for benchmark 62% fines, which are back above $US65 a ton. And it was a good session for base metals with copper, zinc and nickel all rising. Gold also got a boost from the softer US dollar, rising by 0.8% back over $US1,290 an ounce.
6. The day ahead: It’s quiet on the domestic front, with retail sales data for New Zealand during Asian trade. Then there’s German and UK GDP tonight with US markets on holiday for thanksgiving.
Have a great day. I’m on Twitter @Mr_SamJacobs.