6 things Australian traders will be talking about this morning

(Ben Hoskins / Getty Images for IAAF)

Good morning.

To the scoreboard:

  • Dow: 25,119.89 +55.53 (+0.22%)
  • S&P500: 25,119.89 +55.53 (+0.22%)
  • AUD/USD: 0.7420 +0.0001 (+0.01%)
  • ASX SPI futures (September contracts): 6,180 (+222)

1. Federal Reserve Chair Jerome Powell said the central bank should keep “gradually” raising rates “for now.” In a testimony before a Senate committee, he highlighted a “considerably stronger” economy and seemed to downplay growing trade tensions.

2. US stocks rose, with the Nasdaq hitting an all-time high while energy stocks rebounded as oil prices steadied. Bond yields also edged higher after Powell’s testimony. The probability of a fourth 2018 rate hike in December has now increased to 58.6%, according to CME Group.

3. The UK pound had a rough session amid another day of Brexit chaos in British politics. Despite climbing off overnight lows, sterling fell by almost 1% against the greenback. Broader strength in the USD following Powell’s comments drove the AUD back below US74 cents.

4. And a stronger dollar also weighed on gold, which fell through recent support at $US1,240 to slip below $US1,230. Meanwhile, bitcoin — which some call digital gold — is rocketing higher amid institutional interest and more regulatory developments on US trading exchanges.

5. US earnings season is underway, as Goldman Sachs beat analyst expectations, but said legal and regulatory costs jumped. The company also named its new CEO, investment banker David Solomon. Netflix pared early losses to finish 5% lower after reporting disappointing subscriber growth.

6. Japan and the European Union have signed a trade deal amid mounting US protectionism. The agreement gets rid of nearly all bilateral tariffs on products, creating one of the biggest free-trade zones in the world. The EU and Japan were “sending a clear message that we stand together against protectionism,” European Council President Donald Tusk said.

Here’s a look at today’s economic calendar:

  • Australia has the Westpac leading index economic indicator.
  • Inflation data for the UK and the Eurozone.
  • Building permits and housing starts data are out in the US, along with the US Fed’s Beige Book.

Have a great day.

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