To the scoreboard:
- Dow: 24,174.82 -132.36 (-0.54%)
- S&P500: 2,713.22 -13.49 (-0.49%)
- AUD/USD: 0.7388 +0.0047 (+0.64%)
- ASX SPI futures (September contracts): 6,143 (-26)
1. The ASX looks set to open lower after US markets were dragged down by tech stocks in a shortened session before the July 4 holiday. Trade tensions continue to hang over markets with the first round of US tariffs against China set to go into effect on Friday.
2. There was an air of risk-off sentiment in the overnight price action, as US treasuries saw demand with benchmark US 10-year yields falling to 2.83%. Gold also bounced off its recent low to climb back above $US1,250 an ounce and the Japanese yen made a late rally against the US dollar.
3. Broader weakness in the USD saw the Aussie dollar consolidate its gains overnight, after traders in Europe drove the AUD off an 18-month low in the wake of the RBA’s interest rate announcement yesterday.
4. Amid lingering trade tensions, Chinese markets will again be worth watching, after policy makers appeared to step in yesterday to stem the selloff in China’s renminbi currency. Chinese stocks — coming off their worst month in two and a half years — also rallied in afternoon trade.
5. Oil had a volatile session, as US WTI crude initially climbed over $US75 a barrel for the first time since 2014, before reversing. Brent crude — the global benchmark — traded flat while iron ore markets were also quiet despite the ongoing volatility in China.
6. Trader distractions: England and Colombia supporters will probably need an extra coffee this morning, and data shows traders get so distracted by the World Cup that market volumes fall by 40%. As well as that, the heat wave hitting New York right now is slowing down the fastest traders on Wall Street.
A look at the day ahead:
- Australian retail sales for May — a key guide on the outlook for consumer spending (10-second guide is here).
- International trade data for May — forecast is for a monthly surplus of $977 million.
- Services PMIs in Australia and around the world.
- US markets closed for the July 4 national holiday.
Have a great day.
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