To the scoreboard:
Dow: 22,761.07 -12.60 (-0.06%)
S&P 500: 2,544.73 -4.60 (-0.18%)
AUD/USD: 0.7754 +0.0002 +0.03%
ASX200 SPI futures (December contracts): 5,704 (-15)
1. Currencies jockey for position: The US dollar index tracked sideways overnight, and it was a similar story for the Aussie despite a slightly more risk-off tone in global markets. The pound was the best performer among major currencies as tensions within the ruling conservative party appear to have subsided for now. And the Turkish lira crashed by 6% after the US suspended non-immigrant visas, but rallied back this morning:
2. US stocks looking expensive: Stocks in the US and UK fell slightly and ASX futures traders are expecting the two-day rally for the local index to come to an end. US stocks remain elevated near record levels ahead of the upcoming earnings season. And the S&P500 has just ticked over 70 on the relative strength index, which historically has been a sign that the market is overbought. US bond markets were closed for the Columbus Day holiday.
3. Bitcoin scales back to the mountaintop: Demand for Bitcoin is well and truly back after a rough September. A short time ago, the world’s biggest cryptocurrency was closing in on a new record high. Meanwhile, the former chief economist of the International Monetary Fund thinks blockchain technology is here to stay, but the price of Bitcoin will eventually collapse.
4. Data today: This morning at 9:30am there’s ANZ’s weekly consumer confidence measure, then NAB’s monthly business confidence index at 11:30am AEST. RBA deputy governor Guy Debelle will speak this afternoon, and there’s also aggregate financing and new loans data for September out of China. Later tonight the UK has industrial production and trade balance figures and US Fed committee member Neel Kashkari will give a speech.
5. Gold may be poised for a fall: Gold edged slightly higher overnight as geo-political concerns weighed on risk appetite, although analysts at Goldman said the recent rally missed a key technical support level and gold could now fall to $US1,100 an ounce. Iron ore also edged higher although Deutsche Bank think more falls are in store, while oil was little-changed.
6. It’s still about the central banks: Analysts from Macquarie argue that the global economy is still heavily dependent on “financialisation” by global central banks, despite the pending withdrawal of monetary stimulus. Instead of private sector investment or the Trump administration’s policy proposals, Macquarie expects central bank decisions to remain the driving force for the global economy.