Good morning and happy Friday.
To the scoreboard:
- Dow: 26,191.22 +10.92 (+0.04%)
- S&P 500: 2,805.62 -8.27 (-0.29%)
- AUD/USD: 0.7256 -0.0019 (-0.26%)
- ASX200 SPI futures (December contracts): 5,902 (-11)
1. US stocks took a breather overnight in the wake their post-election rally. The US dollar had a modest gain and treasury yields edged higher following the Federal Reserve’s monetary policy announcement.
2. The Fed maintained its forward guidance of “further gradual increases in the target range for the Federal funds rate”. It still described the economy as “strong”, but noted a slowdown in business investment. CME’s Fedwatch tool ascribes a 71.4% probability of another rate hike in December.
3. The AUD eased back slightly amid some strength in the US dollar, but is still holding above 0.7250 US cents this morning ahead of the Reserve Bank’s quarterly Statement on Monetary Policy. The RBA is expected to upgrade its forecasts for GDP growth and the unemployment rate in today’s announcement.
4. Oil prices fell by another 2% and are now trading at 3-month lows, while iron ore reversed the previous day’s fall to climb back towards fresh cyclical peaks. Gold fell slightly and Bitcoin prices edged back from their weekly high.
5. Elon Musk is stepping down as Chair of Tesla. Musk will be replaced by Australia’s Robyn Denholm, who is currently the chief financial officer at Telstra. Shares in Tesla initially rose more than 2% on the news. Here’s 10 things you need to know about Denholm.
6. And while uncertainty about Brexit continues to weigh on UK financial markets, two Amercian billionaire families have taken advantage of the volatility to snap up some prime London real estate. Will Martin has more here.
Today’s economic calendar:
- ABS housing finance data (11:30am — focus will be on slowdown in investor loans).
- RBA quarterly SoMP (11:30am).
- Chinese inflation data.
- UK GDP/industrial production/trade data.
Have a great weekend.