To the scoreboard:
- Dow: 24,099.05 -64.10 (-0.27%)
- S&P 500: 2,654.80 +6.75 (+0.25%)
- AUD/USD: 0.7490 -0.0042 (-0.56%)
- ASX200 SPI futures (June contracts): 6,000 (+7)
1. The US dollar has broken above its 200-day moving average and is trading at its highest level since January 9. Ahead of the US Fed’s interest rate announcement tonight, analysts at JP Morgan still aren’t entirely sure why the greenback has rallied so much.
2. CBA currency strategist Elias Haddad attributed recent US dollar support to the prospect of higher inflation. Although US manufacturing data missed expectations overnight, the prices paid sub-component rose to its highest level in seven years. US 10-year bond yields held steady at 2.96%.
3. The RBA looks set to keep rates on hold for the foreseeable future, and combined with renewed strength in the greenback, the Aussie collapsed to below US75 cents overnight — its lowest level since June 2017. The euro is back below $US1.20 while the UK pound fell further against all the major pairs after more disappointing economic data.
4. In stocks, Apple is surging in after-hours trade after posting a huge earnings beat. Tthe S&P500 recovered from an early fall overnight to close higher, and futures traders are betting the ASX will hold its ground after it climbed above 6,000 for the first time in seven weeks yesterday.
5. Oil prices fell sharply, as brent crude dipped by around 2% from its recent high above $US75 to close at $US73.13 a barrel. BP’s CFO said overnight that prices look “frothy“, while markets continue to assess the possible extension of US sanctions against Iran.
6. Analysts at Morgan Stanley think the next cyclical bear market for US stocks has already begun, with earnings growth set to deteriorate in the second half of the year. But Goldman Sachs remains bullish on commodities, despite recent evidence of a slowdown in global growth.
Have a great day.
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