6 things Australian traders will be talking about this morning

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Good morning.

To the scoreboard:

Dow: 21,892.43 +27.06 (+0.12%)
S&P 500: 2,457.59 +11.29 (+0.46%)
AUD/USD: 0.7905 +0.0002 (+0.03%)
ASX200 SPI futures (Sept contracts): 5,651 (+1)
Iron ore benchmark 62% fines $US76.08/t (-0.67%)

1. US dollar catches a bid as data tide turns: The second reading of US Q2 GDP data was revised upwards to 3% (forecast 2.8%) — a detailed breakdown is here. And ADP payroll numbers showed a healthy gain of 237,000 jobs in August. US data has been broadly improving in recent weeks, with Citi’s economic surprise index now at -21.5 from a low beneath -60. The data prints helped drive the US dollar index off its recent lows as the greenback gained ground against all major currencies.

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2. It’s capex day: The ABS releases private capital expenditure data for the June quarter at 11:30am AEST. David Scutt’s 10-second guide has everything you need to know. There’s also private sector credit for July, showing the monthly growth in housing and business credit. Looking abroad, there’s official government PMIs from China. Then later tonight Europe has employment figures for July and a preliminary read for August inflation, while the US has July personal income and expenditure data (including the closely-monitored PCE inflation index).

3. AUD treading water: The Aussie dollar is hovering above US79 cents ahead of a big day of domestic and Chinese data. The Aussie got swept up in the broad strength of the US dollar overnight, after pushing towards US80 cents when building approvals fell less than expected. That saw the euro move off its two-and-a-half-year high above $US1.20 to fall below $US1.19, while the US dollar is buying more than 110 yen for the first time since August 18.

4. Global stocks rebound: Risk-off sentiment around tension with North Korea further declined and there was solid economic data in Europe and the US. European stocks clawed back the previous day’s losses and US stocks also edged higher. Domestically, futures traders are forecasting a quiet open after Australian stocks traded flat yesterday. The ASX200 remains slightly down for the year so far.

5. Risk-off — but not all the way off: The yield on US 10-year treasuries rose to around 2.14%, but remain their level from late-June. That was after briefly dipping below 2.1% on Monday for the first time since November. Similarly, gold eased back as riskier assets saw more demand but remains near its November highs above $US1,300 an ounce.

6. Too much Trump-bashing?: Maybe, according to Paul Sheard, the chief economist at S&P Global. In an interview with the Australian Financial Review, Sheard said that despite the US president’s sometimes erratic nature, there are signs that the Trump administration is starting to steady the ship and markets could still benefit from pro-growth policies such as tax reform.

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