US stocks fell overnight ahead of a House vote on Dodd-Frank and as markets ready for the release of the Federal Reserve’s meeting minutes. The dollar fell, and 10-year bond yields held comfortably above 3%.
Here’s the scoreboard:
Dow: 24,834.41 -178.88 (-0.72%)
S&P 500: 2,724.44 -8.57 (-0.31%)
AUD/USD: 0.7579 -0.0002 (-0.03%)
ASX200 SPI futures: (June contracts) 6,043 (-4)
1. US Congress is set to pass a sweeping rollback of post-financial crisis regulations. Regional bank shares rallied ahead of a House vote on the bill, which is expected to easily pass, with Fifth Third Bank gaining nearly 4%.
2. China is sharply cutting import tariffs on automobiles. The Finance Ministry announced it will lower import taxes on most vehicles to 15% from 25% starting July 1. Still, President Trump is reportedly unsatisfied with the deal.
3. Trump also cast doubt on a planned summit with North Korean lead Kim Jong Un. In the Oval Office with South Korean President Moon Jai-in, Trump said there’s a “substantial” chance the June 12 meeting won’t happen.
4. OPEC is reportedly considering easing oil supply cuts in June, to meet production quotas if Iran and Venezuela face potential supply disruptions. Crude oil prices held steady at just below $US80 a barrel, while iron ore remains under pressure.
5. In currencies, the US dollar was sold off early in the session but bounced back to leave most major currency pairs largely unchanged. The Aussie is down slightly this morning after briefly climbing above US76 cents overnight.
6. And investors are still keeping a close eye on Italy’s political situation. Italian stocks bounced off their monthly low overnight as buyers also crept back into the bond market, with the yield on Italian 10-year bonds falling by 5 basis points to 2.32%.
Here’s today’s economic calendar:
- Q1 construction data from the ABS (11:30am AEST).
- Speech by RBA Governor Philip Lowe — “Australia’s Deepening Economic Relationship with China: Opportunities and Risks” (6:05pm AEST).
- Preliminary manufacturing PMIs for Japan, Europe and US.
- UK inflation data.
- Minutes from the May meeting of the US Federal Reserve.
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