Markets Overview

  • ASX SPI 200 futures down 0.3% to 8,605.00
  • S&P 500 down 0.5% to 6,834.27
  • Dow Average down 0.6% to 47,664.57
  • Aussie down 0.3% to 0.6622 per US$
  • US 10-year yield rose 3.5bps to 4.1702%
  • Australia 3-year bond yield rose 2.6 bps to 4.04%
  • Australia 10-year bond yield rose 2 bps to 4.70%
  • Gold spot down 0.3% to $4,186.57
  • Brent futures down 2.1% to $62.39/bbl

Economic Events

  • 11:30: (AU) Nov. NAB Business Conditions, prior 9
  • 11:30: (AU) Nov. NAB Business Confidence, prior 6
  • 14:30: (AU) Dec. RBA Cash Rate Target, est. 3.60%, prior 3.60%

RBA is expected to keep rates unchanged at 3.6% with a hawkish tone, according to Bloomberg Economics. The Trump administration has endorsed the Aukus security agreement with Australia and the UK, Secretary of State Marco Rubio said.

Wall Street anxiety halted a four-day rally in US stocks while Treasuries joined a global bond slump ahead of the Federal Reserve’s final meeting of 2025. While an interest-rate cut is all but certain, traders are growing anxious about the pace of next year’s cuts.

The S&P 500 slid 0.3% Monday after the equities benchmark closed within spitting distance of an all-time high. A busy merger Monday failed to bolster the mood after President Donald Trump raised potential antitrust concerns on Netflix Inc.’s planned takeover of the Hollywood studios and streaming business of Warner Bros. Discovery Inc. and Paramount Skydance Corp. stepped in with its own hostile bid.

Uncertainty over the pace of easing in 2026 and wariness about the sustainability of an AI-driven rally tempered sentiment. US stocks had rebounded in recent weeks after some Fed officials signaled they intend to cut rates for a third straight time on Wednesday.

“Expectations for a quarter-point rate cut have been cemented by continued signs of weakness in the employment market, although it’s certain to be one of the most contentious rate decisions in recent history,” according to BMO’s Ian Lyngen.

Kevin Hassett, a top candidate to take over the role of Fed chair, said it would be irresponsible for the Fed to lay out a plan for where it aims to take interest rates over the next six months. The White House National Economic Council Director emphasized the importance of following the economic data in a CNBC interview Monday.

Unease that inflation remains too high has also caused divisions among Fed officials, in a rift that’s been exacerbated by the lack of fresh data during the shutdown. After this week’s likely cut, money markets are leaning toward two more moves by the end of 2026, down from three signaled barely a week ago.

Evercore ISI’s Julian Emanuel says December will bring a season of surprises for investors, while “a divided FOMC makes any pronouncement far less credible than usual.”

US bonds have been on the back foot of late, closing out their worst week in eight months last week amid jitters over the pace of future rate cuts. Economic data and officials’ comments suggest Wednesday’s rate decision is unlikely to be unanimous, with dissent expected from both hawks and doves. US Treasuries extended losses, with the 10-year yield rising around three basis points to 4.17%.

“Labor market weakness, whether due to a downshift in the ‘natural rate of breakeven job growth’ from restrictive immigration policies or because the economy is actually slowing could cause Powell to sound more dovish,” Emanuel wrote.