6 things Australian traders will be talking about this morning

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Good morning.

To the scoreboard:

  • Dow: 24,924.89 +224.44 (+0.91%)
  • S&P 500: 2,798.29 +24.27 (+0.87%)
  • AUD/USD: 0.7406 +0.0041 (+0.56%)
  • ASX200 SPI futures (September contracts): 6,241 (+24)

1. All three major US indices rose overnight, with tech stocks lifting the Nasdaq Composite index to a record high, as markets shook off an escalating trade war and eyed earnings season. That bodes well for the local market, with ASX futures pointing higher to end the week.

2. Consumer prices in the US rose last month at the fastest pace in six years. Inflation jumped 2.9% from a year ago in June, partly bolstered by rising gasoline costs, while core inflation growth rose to 2.3% — an 18-month high.

3. The US dollar was flat or negative against most of the major pairs, with heavier falls against emerging market currencies. But it posted a solid gain against the safe-have Japanese yen, while the AUD is back above US74 cents this morning amid the improved risk-off sentiment.

4. Iron ore caught a bid on the back of higher steel prices, while copper rose off its recent lows — which appeared to be driven by a mysterious large-scale seller. Crude oil climbed by around 1% after a big unwind of bullish positions saw prices slump by 5% in the previous session.

5. Despite signs of higher inflationary pressures in the US economy, US bond yields were steady as benchmark 10-year treasury yields edged slightly higher to 2.849%. US 2-year yields climbed faster to 2.59% so the 2-10 yield curve continues to flatten, but here’s why that’s not always an indicator of a recession.

6. And bitcoin is under pressure to end the week, as prices dipped back towards the $US6,000 mark, a fall of more than 3%. As usual, the move in bitcoin prompted a selloff in most of the other major alt-coins.

Have a great day.

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