6 things Australian traders will be talking about this morning

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Good morning.

To the scoreboard:

  • Dow: 26,430.57 -56.21 (-0.21%)
  • S&P 500: 2,880.34 -4.09 (-0.14%)
  • AUD/USD: 0.7102 +0.0025 (+0.35%)
  • ASX200 SPI futures (December contracts): 6,020 (-6)

1. Benchmark US 10-year yields retreated overnight, after briefly hitting a new seven-year high of 3.27%. Most of the big US tech stocks snapped a three-day losing streak, but the broader S&P500 edged lower in a cautious night of trade.

2. There was some optimism around Italy’s debt crisis, as Italian 10-year bond yields also fell while stocks in Milan partially reversed the previous day’s losses. Markets are braced for more volatility as the government makes a final decision on the budget later this week.

3. The US dollar fell against most of the major pairs, as the AUD climbed back above US71 cents. Meanwhile, the UK pound rallied strongly following reports of another breakthrough in Brexit negotiations.

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4. Benchmark crude oil prices rose back to $US85 a barrel, while gold was flat after a heavy fall yesterday. Rumours about further stimulus measures in China saw iron ore prices surge to a seven-month high, while copper also rose more than 2%.

5. However, UBS said another stimulus package could see China’s current account balance fall into deficit for the first time in 24 years. Such a scenario would put pressure on China’s currency, which may “trigger panic outflows and risk financial stability”.

6. And shares in Snap fell by another 7% overnight after an analyst said the company is running out of money and will need to do a capital raise. Snap stock has now fallen 63% since Kylie Jenner criticised the app’s redesign.

Here’s a look at the key events on today’s data calendar:

  • Westpac’s monthly consumer confidence index in Australia (10:30am AEST).
  • New York Fed president John Williams speaks on monetary policy at IMF event in Asia (12:10pm AEST).
  • UK trade, industrial production and monthly GDP data.
  • US PPI index for September.

Have a great day.

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