6 things Australian traders will be talking about this morning

Photo: Joshua Lott/ Getty.

Good morning.

To the scoreboard:

Dow: 23,580.78 +22.79 (+0.10%)
S&P 500: 2,601.38 -1.04 (-0.04%)
AUD/USD: 0.7604 -0.0012 (-0.16%)
ASX200 SPI futures (December contracts): 5,987 (-4)

1. Aussie can’t break higher: Most of the action was in currencies in a relatively quiet night of global trade. Commodity currencies were mixed, as the AUD hit an overnight high above 0.7640 US cents but was quickly sold off while the Kiwi broke higher through resistance. The Japanese yen hit a 10-week high as markets anticipate more policy tightening by the Bank of Japan.

2. Stocks mixed: The Europeans STOXX600 index fell by 0.46% after more wobbles in Chinese stocks yesterday, and investors will be watching Shanghai when markets open at 12:30pm AEDT. US stocks traded flat, as new homes sales data beat expectations. Meanwhile, Morgan Stanley is forecasting that rising interest rates and high company debt loads set the stage for more volatility on the S&P500 next year.

3. Big week for the USD: The US dollar index is trading at a two month low, ahead of some key events this week starting today as US Fed Chair nominee Jerome Powell appears before Congress. Then current Fed Chair Janet Yellen testifies before a Senate inquiry on Wednesday. There’s also tax cut developments to monitor, and PCE inflation figures on Thursday night.

4. Yield curves still flat: US bonds saw demand across the curve overnight, as yields fell amid a mild tone of caution on global markets. That keeps the spread between 2-year and 10-year bond yields hovering near decade lows. Chinese 10-year bond yields are holding steady at 3.98% as traders watch for more signs of jitters on Chinese markets.

5. Commodities lower: Iron ore saw its stellar winning streak come to an end, falling by 1% from a four-month high on Friday. Oil also fell as traders assess the competing forces of an extension to OPEC supply cuts and a potential increase in US shale oil production.

6. Bitcoin still elevated: Prices have steadied in the $US9,500 range after threatening to climb above the $US10,000 barrier. And if you think it’s overvalued there are ways to short the currency but it’s risky, according to Bloomberg.