To the scoreboard:
Dow: 22,118.86 +61.49 (+0.28%)
S&P 500: 2,496.48 +8.37 (+0.34%)
AUD/USD: 0.8018 -0.0002 (-0.02%)
ASX200 SPI futures (Sept contracts): 5,770 (+25)
Iron ore benchmark 62% fines: $US76.37/t (+2.5%)
1. Party continues for global stocks: The mood stayed positive on global markets overnight, with the same catalysts as Monday’s session — a reduced North Korean threat which appears to be easing for now, while the damage in Florida from Hurricane Irma was less than feared. It bodes well for Asian markets today, as European stocks rose and the S&P500 closed at a new record high, although UK stocks were weighed down by the stronger pound.
2. UK inflation beats forecasts: That rise in the pound was driven by August CPI figures, which showed that UK inflation rose by 2.9% — the highest level since August last year. The pound subsequently hit a one-year high against the US dollar. In an otherwise mixed night for currencies, the USD gained more ground against the yen and Swiss franc, while the AUD held up above US80 cents, off yesterday’s lows but trading in a narrow range.
3. Dimon joins the Bitcoin bears: JP Morgan CEO Jamie Dimon came out swinging at Bitcoin overnight, calling it a “fraud” and comparing the recent price action to famous asset bubbles of the past. His comments appeared to have some effect as Bitcoin slumped from above $US4,260 to around $US4,100 before gaining back some ground. Here are the overnight moves:
4. Bond yields rise again: In keeping with more of a risk-on theme this week, bonds were sold again overnight with the yield on benchmark US 10-year treasuries — which move inversely to their price — up another four basis points to 2.17%. And while we’re on bonds, Goldman Sachs unveiled plans at a conference overnight to improve its fixed income trading division, which has noticeably under-performed the market this year.
5. Data today: At 10:30am AEST Australia has the monthly Westpac/Melbourne Institute consumer confidence index, which is currently on its worst streak since 2008. Later tonight there are finalised CPI figures for Germany, and the Eurozone has employment figures for the June quarter and industrial production data.
6. Major commodities push higher: Benchmark crude closed back near a four-month high at $54.27 a barrel, and as usual there’s plenty happening behind the scenes with talk of another extension to the OPEC production cuts, although the FT reported that Nigeria will resist such a move. Iron ore lifted sharply following its recent decline, amid reports that Chinese producers are shunning lower-grade stock demand for shipments of higher grade ore.
Enjoy your day, I’m on Twitter @Mr_SamJacobs.