To the scoreboard:
- Dow: 26,828.39 +54.45 (+0.20%)
- S&P 500: 2,925.51 +2.08 (+0.07%)
- AUD/USD: 0.7102 -0.0083 (-1.15%)
- ASX200 SPI futures (September contracts): 6,152 (+9)
1. The Dow hit another all-time high overnight, and the S&P 500 flirted with a record close, as Wall Street eyed robust economic data. US government bond yields surged, with the 10-year rising 13 basis points to 3.18% — the highest level since July 2011.
2. The spike in bond yields was the catalyst for a renewed round of USD strength, and the Aussie dollar got belted overnight. It’s trading just off multi-year lows at the start of Asian trade this morning.
3. Employment numbers in the US flew past expectations last month. Private payrolls notched their largest gain in seven months in September, an ADP employment report showed, with companies adding 230,000 jobs. The upbeat data comes a day after Amazon announced it would raise its minimum wage to $US15 an hour, another sign of a tight labour market.
4. And activity in the US services sector rose to the highest level on record. Boosted by increased spending leading up to the end of the fiscal year, the Institute for Supply Management said its nonmanufacturing activity index surged to 61.6 in September (A reading above 50 indicates expansion, while a reading below 50 indicates contraction).
5. Oil prices jumped to near four-year highs. As the US prepares to enact oil sanctions against Iran in November, some analysts think prices could hit $US90 a barrel as global supply tightens. Crude had tumbled in earlier trading after the Energy Information Administration reported the largest buildup of US crude this year.
6. Italian bond yields fell back sharply from their weekly high, amid ongoing volatility as negotiations continue around the new government’s fiscal budget. Analysts said the government’s pledge to slightly reduce its 2019 deficit forecast should be enough to avoid triggering emergency measures by the EU.
And a look at the upcoming economic calendar:
- International trade data for August in Australia (forecast surplus of $1.4 billion in August).
- Jobless claims and factory orders in the US.
Have a great day.
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