To the scoreboard:
- Dow: 25,027.07 -799.36 (unchanged)
- S&P 500: 2,700.06 -90.31 (unchanged)
- AUD/USD: 0.7268 -0.0071 (-0.97%)
- ASX200 SPI futures (December contracts): 5,674 (+11)
1. Global stocks remained under pressure overnight after Tuesday’s sharp selloff. European and UK markets both fell more than 1%, amid lingering fears over US-China trade and a flattening US yield curve. US markets were closed to mark the funeral of former President George H.W. Bush.
2. China’s ministry of commerce described trade talks with the US as “very successful”, and pledged to push forward with negotiations over the next 90 days. It followed an announcement by authorities to apply punishments for intellectual property theft — a key concern of the US. But CBA analyst Richard Grace remains “sceptical of the US-China handshake agreement”.
3. With US markets closed, the spread between 2-year and 10-year US bond yields remains at an 11-year low of 12 basis points. History suggests when it inverts a recession follows, although for the last five US recessions, stocks didn’t peak until an average of 19 months after the inversion.
4. The Australian dollar remains under pressure following a sharp fall in the wake of yesterday’s weak GDP print. Weakness in the Aussie was exacerbated by a sharp fall in the Canadian dollar, after dovish commentary on the inflation outlook from the Bank of Canada. source=”Investing.com” nocrop=”true”]
5. In commodities, oil prices edged higher as markets await further commentary from OPEC on output cuts. Gold was little changed, while Goldman Sachs thinks iron ore markets will be boring next year. Bitcoin lost some more ground and is trading at around $US3,700 this morning.
6. It’s retail sales day: October retail sales data is out at 11:30am AEST. Today’s report takes on extra significance, after a soft September quarter for retail sales was reinforced by lower domestic consumption growth in yesterday’s Q3 GDP print. David Scutt’s 10-second guide has everything you need to know.
Here are the other key events on today’s economic calendar:
- Australian trade balance for October (11:30am AEDT).
- RBA’s Guy Debelle gives a speech called “Lessons and Questions from the GFC” (8:05pm AEDT).
- US factory orders and durable goods orders.
- Fed voting committee member Raphael Bostic speaks on the outlook for the US economy.