To the scoreboard:
Dow: 25,370.07 -15.73 (-0.06%)
S&P 500: 2,748.18 -3.11 (-0.11%)
AUD/USD: 0.7838 +0.0014 (+0.18%)
ASX200 SPI futures (March 2018 contracts): 6,031 (-15)
1. US bond yields jumped again overnight, after Chinese authorities indicated they may scale back their purchases of US treasuries. The yield on benchmark US 10-bonds rose as high as 2.59% before some buyers stepped in. The recent selloff in bond markets is increasingly catching traders’ attention, amid signs the three-decade bull market in bonds may be nearing its end.
2. In currencies, the Aussie rose as high as 0.7868 US cents on the news out of Asia before falling back. Another bond selloff gave added momentum to the safe-haven Japanese yen, which was already stronger following the Bank of Japan’s bond-purchase tapering announcement earlier this week. USD/JPY is now at the lowest level since late November after falling more than 1% overnight.
3. Global equities stall: Moves in stocks were relatively limited, with US and European markets edging lower while London’s FTSE rose amid some weakness in the UK pound. This report in the Financial Times suggests stocks look expensive based on a well-known price-to-earnings indicator, just as analysts around the world are in the process of revising up their earnings forecasts.
4. Today brings the most important data release of the week, with retail sales figures for November from the ABS at 11:30am AEDT. Analysts are forecasting a 0.4% monthly rise, and the report carries extra weight given the poor contribution to Q3 GDP from domestic consumption — the biggest part of the Australian economy. David Scutt’s 10-second guide has the breakdown.
5. Oil rally continues: Oil is at a multi-year high, and prices continued to climb overnight after the US Energy Informatinon Agency’s weekly oil inventory report showed a drawdown of 4.948 million barrels — the eighth straight week of stock reductions. Iron ore was little changed while base metals — including gold, copper, zinc and nickel — rose across the board.
6. To cryptos, and Bitcoin Cash made a sharp move higher — apparently due to a mistake, as huge online retailer Overstock.com mixed up bitcoin and bitcoin cash for payments. Goldman Sachs reckon bitcoin could become a global currency (in theory) — but mainly for countries with weak monetary systems. And Warren Buffett is a bitcoin bear.
Have a great day.