Markets Overview

  • ASX SPI 200 futures down 0.9% to 8,733.00
  • S&P 500 down 0.7% to 7,553.68
  • Dow Average down 1.2% to 50,687.07
  • Aussie down 0.7% to 0.7127 per US$
  • US 10-year yield rose 5.1bps to 4.4946%
  • Australia 3-year bond yield rose 3 bps to 4.56%
  • Australia 10-year bond yield rose 3.1 bps to 4.91%
  • Gold spot down 1.2% to $4,434.33
  • Brent futures up 1.9% to $97.80/bbl

Economic Events

  • 10:30: (AU) Australia to Sell A$1 Billion 77-Day Bills on June 4
  • 10:30: (AU) Australia to Sell A$1 Billion 126-Day Bills on June 4
  • 11:00: (AU) Australia to Sell A$100 Million 0.25% 2032 Linkers on June 4
  • 11:30: (AU) April International Trade Balance, est. A$1.6b, prior -A$1.84b
  • 11:30: (AU) April Exports MoM, prior -2.7%
  • 11:30: (AU) April Imports MoM, prior 14.1%
  • 15:00: (AU) RBA’s Bullock-Senate Testimony

RBA Governor Michele Bullock appears before the Senate Economics Legislation Committee. New Zealand house prices have stalled as rising home-loan interest rates and the impact of the global energy shock from the Iran war spook buyers.

Asian stocks were poised for losses on Thursday as renewed clashes between the US and Iran added strain to a fragile ceasefire.

Equity-index futures for Japan and Hong Kong signaled losses at the start, putting a regional benchmark on track to end a four-day rally that carried it to a record. After the close, Broadcom Inc. shares tumbled in post-market action as its outlook failed to impress investors.

Contracts for the S&P 500 Index fell 0.5%, after the underlying gauge pulled back from a peak and snapped a nine-day winning streak. That came after the US and Iran exchanged fire overnight, drawing Kuwait and Bahrain into one of the most serious flare-ups since a ceasefire took effect in early April.

In some relief for markets, American crude declined 0.8% to $95.23 a barrel and US bond futures inched higher after the US announced a ceasefire between Israel and Lebanon. Elevated oil prices and signs of resilience in the US labor market sent Treasuries lower Wednesday, as traders increased bets that the Federal Reserve’s next move will be to raise interest rates.

The moves followed days of rising tensions in the Middle East, including Israeli operations against Hezbollah in Lebanon, that risk derailing US-Iran talks and undermining a fragile ceasefire. While the AI-driven rally has propelled equities to record highs, a fresh wave of geopolitical risks is testing investors’ willingness to look past higher oil prices.

“We are no longer watching a delicate ceasefire, instead what is occurring is more akin to a low-intensity conflict,” said Chris Beauchamp, chief market analyst at IG. “This simply leaves the vital issue of oil supplies unresolved, and the clock continues to tick down towards doomsday for oil inventories and the global economy.”

Some investors also warned that the booming artificial-intelligence market is showing signs of a bubble that will eventually burst.

“All great technology changes produce bubbles,” billionaire investor Ray Dalio, the founder of Bridgewater Associates, said in a Bloomberg Television interview Wednesday.

Elsewhere, the dollar, the haven of choice during the Middle East conflict, gained the most in two weeks during the New York session. Non-interest-bearing gold fell 1.2% to $4,434 an ounce.

In Asia, the yen hovered near the 160-per-dollar level after comments from Bank of Japan Governor Kazuo Ueda that make an interest rate hike this month sound likely but not certain.

Attention also turned to the US labor market, where data showed companies added the most jobs since January 2025, suggesting hiring momentum remains intact despite higher energy costs. If confirmed by Friday’s payrolls report, the figures may reinforce expectations that the Fed is more likely to raise rates in the months ahead.

Investors will get another read on the labor market on Thursday with weekly jobless claims, ahead of the government’s monthly employment report on Friday.

Fed Bank of Dallas President Lorie Logan said policymakers may need to raise rates later this year to bring inflation back to target. Separately, New York Fed President John Williams told Yahoo Finance that the outlook for rates remains uncertain.

“If incoming US data continue to surprise positively, investors may increasingly express a more hawkish Fed view through renewed dollar strength, particularly against lower- and zero-yielding currencies and commodities like the Japanese yen and gold,” said Fawad Razaqzada at Forex.com.

While Ueda’s comments in Japan reinforced expectations for a rate hike on June 16, they were less explicit than remarks that preceded the BOJ’s previous two increases.

Pressure on the yen has mounted as negotiations over a permanent US-Iran ceasefire show little sign of a breakthrough. The wide interest rate gap between the US and Japan is also weighing on the Japanese currency after the BOJ held rates steady in April.

“The BOJ appears to be on track for a June hike,” said Yusuke Miyairi, a currency strategist at Nomura International Plc. “Since the BOJ’s June hike is much priced in, Ueda’s speech won’t change the trend of the dollar-yen pair.”