To the scoreboard:
Dow: 24,713.98 -54.95 (-0.22%)
S&P 500: 2,720.13 -2.33 (-0.09%)
AUD/USD: 0.7513 -0.0004 (-0.05%)
ASX200 SPI futures (June contracts): 6,122 (+14)
1. Oil briefly cracked $US80 for the first time since 2014. Benchmark crude rose as high as $80.50 a barrel on the back of supply concerns related to a US exit from the Iran nuclear deal and a collapse in Venezualan production.
2. There was more solid US data as jobless claims held near 40-year lows and and the Philly Fed Manufacturing Index rose to 34.4 this month — its highest level in a year. With higher oil prices adding to inflation pressures and the Fed on track to continue its rate hiking cycle, US 10-year bond yields edged higher to 3.12%.
3. And with US 10-year yields having broken above their long-term down trend, experts have turned their attention to longer-term 30 year debt. This tweet from Julian Brigen at Macro Intelligence 2 highlights that US 30-year yields are on the cusp of breaking above their 100-month moving average — a level they haven’t reached since 1985.
4. In addition to higher oil prices and rising yields, President Donald Trump cast doubt on US-China trade negotiations. Also on the geo-political front, House Speaker Paul Ryan’s deadline for a new NAFTA deal passed while North Korea suspended peace talks.
5. But US stocks only finished slightly lower while European markets were more bullish, as the pan-European STOXX600 index rose by 0.66%. In currencies, the USD edged higher as the euro fell back below $US1.18, while the AUD gave back some of yesterday’s gains ahead of a quiet day of data in the Asian session.
6. Continued strength in the USD sent gold prices to a fresh 2018 low. Gold slid as low as $1,285.83 per ounce as the greenback held close to a five-month high on the US dollar index.
Have a great weekend.