Markets Overview
- ASX SPI 200 futures up 0.3% to 8,852.00
- S&P 500 up 0.5% to 6,664.36
- Dow Average up 0.4% to 46,315.27
- Aussie down 0.2% to 0.6597 per US$
- US 10-year yield rose 2.2bps to 4.1274%
- Australia 3-year bond yield rose 4.2 bps to 3.42%
- Australia 10-year bond yield rose 4.9 bps to 4.24%
- Gold spot up 1.1% to $3,685.30
- Brent futures down 1.1% to $66.68/bbl
Economic Events
- 11:00: (AU) RBA’s Bullock-Testimony
RBA Governor Michele Bullock appears before the House of Representatives Standing Committee on Economics in semi-annual testimony. Australia’s private credit sector must improve standards around valuations, governance and liquidity to align with global practices and boost investor confidence, regulator says in a report.
US equity futures nudged lower as traders weighed the tech industry impact from the sharp increase in H-1B skilled worker visa application fees.
S&P 500 and Nasdaq 100 equity futures both slipped 0.1% in early trading, while the dollar was steady. Asian equities may start the week mixed, with contracts in Australia and Japan closing higher, while those in Hong Kong slid.
US President Donald Trump on Friday called for a sweeping overhaul of the H-1B visa program, including a $100,000 application fee. The move rattled companies that have long depended on the program to recruit global talent, particularly in California’s tech-heavy economy, where employers rely on skilled computer programmers, data analysts and engineers.
The move may inject fresh uncertainty into global markets that have seen equities rally to a record high. Pressure may be most acute in India and its $280 billion IT sector that’s already grappling with sluggish growth and tensions between Prime Minister Narendra Modi and Trump.
It’s “hard to escape the idea it’s not aimed at Modi and India,” said Tony Sycamore, an analyst at IG in Sydney.
Elsewhere, Reserve Bank of Australia Governor Michele Bullock will give her semi-annual testimony in the nation’s parliament Monday. Focus will be on any indication the central bank will cut rates into next year after a mixed jobs report and internal documents suggesting its estimate of the neutral cash rate is lower than previously thought.
“A dovish re-pricing of the RBA cash rate will be limited in our view because we expect Bullock to sound optimistic on the outlook for the Australian economy,” Commonwealth Bank of Australia strategists including Joseph Capurso wrote in a note to clients.
China’s one-year and five-year loan prime rates, which are expected to remain steady for a fourth month, will also be in focus on Monday. Commercial banks are waiting for guidance from the People’s Bank of China, which may be reluctant to ease policy to support a sluggish economy to avoid stoking a hot stock market, according to David Qu, an analyst at Bloomberg Intelligence.
Traders this week will parse a swath of data including activity readings in Europe and the Federal Reserve’s preferred measure of inflation. Fed Chair Jerome Powell is also due to speak on the outlook of the economy on Tuesday, after he pushed back against expectations of rapid rate cuts after the central bank eased policy last week.
In commodities, oil edged higher after Trump renewed his call for European countries to stop buying oil from Russia to halt the war in Ukraine. Gold was also up slightly.
