To the scoreboard:
Dow: 21,408.52 -5.82 (-0.03%)
S&P 500: 2,427.43 +2.25 (+0.09%)
AUD/USD: 0.7607 +0.0001 (+0.01%)
ASX200 SPI futures (Sept contracts): 5,676 (-1)
Iron ore benchmark 62% fines: $US64.05 (2%%)
1. Serenity now: Markets remain quiet, with US stocks little changed on low volumes ahead of earnings season which kicks off on Friday. S&P500 companies are forecast to report profit growth of 6.3% in the second quarter. A combination of low unemployment and low inflation is providing a sweet spot for US stocks, as analysis by Citi shows that institutional investors are holding record-low levels of cash. The Euro Stoxx Index rose by 0.4% and the ASX is poised to open flat.
2. Major currencies jockey for position: The Aussie dollar was little changed against G10 currencies. The US dollar index rose slightly, and USD/YEN briefly reached a 2-month high above 114 after the Bank of Japan’s pledge on Friday to maintain monetary stimulus. The Canadian dollar slipped slightly against the greenback ahead of this Wednesday’s interest rate announcement, with analysts split on the Bank of Canada’s decision although money markets have priced in the chance of a rate increase at over 90%.
3. Bond yields retreat: Yields on Australian and US government bonds fell slightly across the curve overnight following last week’s steep rise. German 10-year bond yields also fell back to 0.54%, after rising by 30 basis points in two weeks. With US 10-year treasuries hovering at around 2.37%, bond market investor Jeff Gundlach from DoubleLine Capital said that 2.42% is the next key support level.
4. Data today: ANZ has its weekly consumer confidence reading at 9:30am AEST. At 11:30am AEST there’s the NAB business survey, which has pointed to generally strong business conditions in 2017 although business confidence fell in May. Also at 11:30am, house lending data from the ABS where the focus will be on the impact of recent macro-prudential restrictions on investor lending.
5. Commodity wrap: Iron ore had another strong session overnight. Benchmark crude oil fluctuated but closed up 0.4% at $US46.88 a barrel, as the global supply glut keeps oil prices compressed below $US50. Gold is up slightly this morning at $US1,213 an ounce, but analysts from Citi said the precious metal has broken through its technical support range, and predict a fall towards $US1,130.
6. Rough night for the cryptos: Buckle up on the crypto roller-coaster. Ethereum got crushed overnight, falling by 10% with further losses in early trade this morning taking it to just above $US200 from a high in mid-June of $US390. Bitcoin didn’t fair much better, crashing by 8% overnight from above $US2,500 to $US2,340.