To the scoreboard:
- Dow: 25,250.55 -89.44 (-0.35%)
- S&P500: 2,750.79 -16.34 (-0.59%)
- AUD/USD: 0.7139 +0.0032 (+0.45)
- ASX SPI futures (December contracts): 5,818 (unchanged)
1. US stocks wavered and then turned negative in the final hour of trade overnight, as concerns around rising rates and trade tensions kept markets on edge. ASX futures are flat, following another sharp selloff yesterday as the big banks came under more pressure.
2. Treasury yields edged higher, with the 10-year at 3.154% and the 2-year at 2.857% this morning. The other major bond market in focus, Italy, was little-changed ahead of this week’s deadline for the Italian government to present its draft budget to the European council.
3. The risk-off tone drove some demand for the Japanese yen, while the US dollar drifted lower as September retail sales missed expectations. The UK pound initially fell on Brexit concerns before clawing back gains, while the Aussie dollar pushed higher amid the USD weakness.
4. Data showed the US government deficit hit its highest level since 2012 this year amid increased spending and tax cuts. According to the Treasury Department, the federal budget deficit surged by about 17% to $779 billion in fiscal 2018.
5. Oil initially jumped on tensions between the US and Saudi Arabia over the disappearance of journalist Jamal Khashoggi, before prices retreated in afternoon trade. Gold edged higher, while Bitcoin spiked back above $US6,500 as the value of crypto “stable-coin” Tether fell to an 18-month low.
6. And US economist Gary Shilling has warned that Fed tightening has caused a recession 11 out of 12 times since the World Wars, but he said there’s no immediate catalyst for a crash. In an interview with Business Insider, Shilling said his main investment advice is to be long the US dollar. Read the full transcript here.
Here’s a look at the key events on today’s economic calendar:
- New Zealand inflation data this morning.
- RBA board minutes (11:30am AEST).
- ZEW business survey in Germany.
- UK unemployment rate.
- US industrial production, capacity utilisation, job openings and housing market index.
Have a great day.
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