To the scoreboard:
Dow: 21,987.56 +39.46 (unchanged)
S&P 500: 2,476.55 +4.90 (unchanged)
AUD/USD: 0.7946 +0.0001 (+0.01%)
ASX200 SPI futures (Sept contracts): 5,691 (+11)
Iron ore benchmark 62% fines: $US77.86/t (+1.3%)
1. It’s quiet out there: With US markets closed for a holiday, it was quiet overnight on global markets although traders are still cautious about the tensions with North Korea. Safe haven currencies the Japanese yen and Swiss franc saw more demand, and gold pushed above $US1,340 an ounce for the first time in a year. The US dollar index dipped slightly and the euro rose.
2. RBA day: The Reserve Bank’s monthly interest rate decision with be announced at 2:30pm AEST. David Scutt’s 10-second guide has everything you need to know. There’s also Ai Group’s Service PMI index (9:30am AEST) which has been strong in recent months, and the ABS has Australia’s current account balance for the June quarter at 11:30am AEST.
3. Aussie drifts lower: With a big day of data ahead, the Aussie dollar moved slight lower overnight amid more of a risk-off tone on global currency markets. Iron ore started the week with a fall but base metals remain elevated, with copper still trading around three-year highs while nickel and zinc prices also rose overnight.
4. Missile threat grounds Asian stocks: The North Korean crisis weighed on Asian markets yesterday, with China’s Shanghai Composite the only index to rise while Japanese and South Korean stocks both fell by around 1%. Selling extended to the ASX200, which eventually found support below 5,700. Futures traders expect the index to stay within its recent 5,650-5,800 range and have priced the index to bounce back this morning.
5. China rocks the crypto-world: Chinese regulators banned Initial Coin Offerings (ICOs) last night, on the grounds that they constitute illegal fund-raising and the ban may even extend to all cryptocurrencies. Not surprisingly prices fell and the sell-off extended to Ethereum — the most popular blockchain for new ICOs — which lost around 15% against the USD. Bitcoin is holding at around $US4,500 after briefly hitting $US5,000 over the weekend.
6. Is there a digital D-Day coming for Aussie banks? ASIC chairman Greg Medcraft thinks so. Medcraft told the AFR that banks are living on “borrowed time” and need to re-position themselves smartly, as the adoption of digital currencies will reduce the role of traditional banking in the transaction process.
Have a great day, I’m on Twitter @Mr_SamJacobs.