To the scoreboard:
Dow: 21,807.64 +54.33 (+0.25%)
S&P 500: 2,465.54 +7.69 (+0.31%)
AUD/USD: 0.8003 +0.0001 (+0.01%)
ASX200 SPI futures (Sept contracts): 5,687 (+13)
Iron ore benchmark 62% fines: $US76.82/t (-2%)
1. Stocks rise as US government extends debt ceiling: Donald Trump sided with the Democrats in postponing a ruling the US debt ceiling until December. That was the main impetus for US stocks to climb higher, and European stocks also rose as the risks around geo-policital tensions with North Korea appear to have subsided for now.
2. Bank of Canada goes again: Citing “stronger than expected” economic data, the BoC raised rates by 25 basis points to take the benchmark cash rate to 1%. The move surprised markets, which weren’t expected the bank to hike rates until next month. Not surprisingly, the Canadian dollar was the start performer overnight with a 1.2% gain against the US dollar. Here’s the sharp move, courtesy of Greg McKenna at AxiTrader:
3. Data deluge continues: A huge week of domestic data continues today with retail sales and balance of international trade data for July, both at 11:30am AEST. Then later tonight, the European Central Bank meeting on monetary policy will be keenly watched by markets, given the recent strength in the euro. Analysts will be focused on whether the bank indicates any shift in forward guidance for its current plans to unwind monetary stimulus.
4. US dollar holds steady: The greenback held its ground against the euro and pound, and climbed off its lows against the yen and Swiss franc as markets were less risk-averse than the previous session. The AUD appeared to get a boost from the strength in the Canadian loonie, climbing from US79.6 cents yesterday to a short time ago be back above US80 cents.
5. Markets take a breather: The broader risk-on tone extended to fixed income and commodities. The debt-ceiling extension saw yields on benchmark US treasuries rose back above 2.1%, and gold fell but is still holding near its 2017 high at above $US1,330 an ounce. Oil is at its highest level since May above $US54 a barrel, while iron ore prices remain choppy and took a sharp fall overnight.
6. Bitcoin Cash just took off: Bitcoin held steady at around $US4,500 overnight, but its off-shoot Bitcoin Cash surged by more than 15%. While that’s not necessarily a huge leap in the crypto-world, the more established cryptocurrencies are bouncing back after China’s ICO crackdown roiled the market. Full overnight crypto wrap is here.
Have a great day, I’m on Twitter @Mr_SamJacobs.