To the scoreboard:
- Dow: 26,049.64 +259.29 (+1.01%)
- S&P 500: 2,896.74 +22.05 (+0.77%)
- AUD/USD: 0.7348 +0.0023 (+0.32%)
- ASX200 SPI futures (September contracts): 6,264 (+28)
1. ASX futures are pointing higher after the US and Mexico reached a preliminary deal on a modernised version of the NAFTA trade agreement. The deal still needs to pass Congress but optimism on trade helped push US stocks to new record highs.
2. The recent run of US dollar weakness continued, as the euro and pound continued to push higher. Commodity bloc currencies including the AUD also gained ground along with the Mexican peso following the NAFTA trade deal, but the Turkish lira slumped amid the ongoing feud between Ankara and Washington.
3. And US 10-year bond yields pushed a little higher to 2.85%. That’s created a bit of breathing space — for now — on the yield spread between US 2-year and 10-year bonds, which caught the market’s attention yesterday when it fell below 20 basis points.
4. It was another good night for commodities, as oil continued to push higher while the US dollar’s fall gave gold another boost and copper edged higher. But iron ore bucked the trend, as prices slumped on a possible unwind of bullish positions on steel futures.
5. Elsewhere on trade, the Trump administration held a final round of hearings on proposed 25% tariffs targeting an additional $US200 billion worth of Chinese imports. Companies testified last week that more tariffs would raise costs and reduce access to foreign markets. And here’s what would happen to the UK markets in the event of a no-deal Brexit.
6. And while Amazon and Walmart are set to battle it out in the $4 trillion US retail market, Warren Buffett has made his first foray into India with an investment in Paytm, the largest mobile-payment company in India.
It’s a quiet day of data in Australia but here’s a look at the global calendar
- Eurozone loan growth and money supply data.
- US trade data.
- US Case-Shiller house price index and the Richmond Fed manufacturing index.
Have a great day.
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