To the scoreboard:
- Dow: 25,444.34 +64.89 (+0.26%)
- S&P500: 2,767.78 -1.00 (-0.04%)
- AUD/USD: 0.7121 +0.0022 (+0.31)
- ASX SPI futures (December contracts): 5,911 (-12)
1. US stocks closed flat on Friday, in a cautious session which capped off a volatile week of trade. Tech stocks dragged the index lower, led by falls in Atlassian which slumped by over 14%.
2. ASX futures closed slightly lower, and there’s some political uncertainty to start the week following the Wentworth by-election on Saturday. With the result still a little too close to call, postal votes and recounts will decide whether Independent Kerry Phelps wins, which would see the Coalition lose its one-seat majority in the lower house.
3. US bond yields climbed back to the 3.2% mark on Friday night. Italian bond yields rose to their highest level since February 2014, before falling sharply after EU officials said they were maintaining dialogue with Italys’ government over its draft budget. Italy’s response to the EU’s initial rebuke of the budget is due tonight.
4. The week ahead: It’s a quiet one on the data front, both here and abroad. Domestically, RBA speakers will be in focus early in the week while the central banks of Canada and Europe are scheduled to make policy announcements. The full calendar is here.
5. The developments in Italy drove demand for the euro as the US dollar lost a bit of ground to end the week. The AUD was steady against the greenback, and it’s slightly higher this morning as currency traders don’t seem too concerned about the prospect of a minority government.
6. And Chinese markets will be in focus today after the Shanghai Composite surged by almost 3% to end the week following a coordinated display of positive rhetoric from key policymakers. But the index is still down by 30% for the year, and there’s a $US600 billion reason why it could still get worse.
Have a great week.
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