To the scoreboard:
- Dow: 25,952.48 -12.34 (-0.05%)
- S&P500: 2,896.72 -4.80 (-0.17%)
- AUD/USD: 0.7178 -0.0036 (-0.50%)
- ASX SPI futures (September contracts): 6,262 (-18)
1. US markets reopened overnight and the USD got back on the move, as manufacturing activity in the US surged to its highest level in 14 years in August. The greenback rose against all the major pairs and the AUD is back under US72 cents ahead of today’s Q2 GDP report.
2. It’s GDP day: The ABS will release Australia’s economic report card for the June quarter at 11:30am AEST. Quarterly growth is forecast at 0.7% (down from 1% in March), which will leave annual growth at 2.8%. David Scutt’s 10-second guide has the full preview.
3. It was another rough session for emerging markets, as MSCI’s EM currency index had its biggest decline since early August. Falls were led by the Argentinian peso and South African rand, as GDP data showed South Africa has fallen into recession.
4. Base metals got hammered overnight, as copper and silver both fell by around 2.5% while strength in the USD weighed on gold. Iron ore held its ground but global mining stocks fell amid the sharp selloff. The US is now expected to follow through with tariffs on roughly $US200 billion worth of Chinese goods this week.
5. ASX futures are pointing lower, as trade fears and EM worries weighed on European markets. US stocks bounced off their lows to finish flat, as markets returned from holiday. Amazon edged higher and has now followed Apple into the $1 trillion club, as measured by market capitalisation.
6. Despite the falls in Europe, bank stocks in Italy shot higher and Italian bond yields fell equally sharply, after government officials said Italy would abide by EU budget rules. Benchmark US 10-year bond yields rose five basis points to 2.9%.
Here’s a look at the key events on today’s economic calendar:
- Q2 GDP in Australia.
- Global services PMIs, starting with Australia, China and Japan in Asian trade.
- European retail sales.
- US trade data.
- Bank of Canada interest rate announcement (rates forecast to stay on hold at 1.5%).
Have a great day.
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