Global Market Report: dollar slips as bonds rise
The local market is set to open higher despite a sell-off on Wall Street as the yield on the US 10-year Treasury note nears 3 per cent.
Australia
The local market is set to open higher despite a sell-off on Wall Street as the yield on the US 10-year Treasury note nears 3 per cent. Notable too was a 7 per cent fall in aluminium, its biggest one-day drop in eight years, on news that the US has extended the deadline for companies to wind down business with sanctions-hit Russian producer Rusal.
At 7.35am (AEST), the Australian share price futures index was up six points, or 0.1 per cent, at 5874. The dollar is nearing US75c amid growing US bond yields. Online comparison site iSelect posted a 55.5 per cent loss as it failed to meet guidance expectations and its CEO Scott Wilson quit. Embattled insurance giant AMP fell 3 per cent.
Out today: ABS inflation figures for the March quarter. ANZ-Roy Morgan weekly consumer confidence survey due out. RBA Assistant Governor (Financial Markets) Christopher Kent speaks at a Housing Industry Association function. Fortescue Metals releases March quarter production report.
Asia
Asian stocks dipped on Monday as investors braced for a bevy of earnings from the world’s largest corporations, while monitoring higher US bond yields.
Traders await surveys on global manufacturing for April to see if economic softness in the first quarter is a passing phase linked to poor weather and the Lunar New Year holidays.
The first reading from Japan was tentatively upbeat with its PMI firming to 53.3 in April as output and domestic demand picked up.
In stock markets, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.4 per cent, with South Korea off 0.2 per cent.
Japan’s Nikkei eased 0.3 per cent and China blue chips 0.6 per cent as tech stocks continued to struggle with a warning on waning demand for mobile phones.
Europe
The FTSE 100 ended the session up 0.4 per cent at 7398.87 points, its highest level in seven weeks, pulling into positive territory following a muted start to the day’s trading.
The rise in bond yields helped boost shares in financial stocks.
Shares in HSBC, Lloyds and Barclays were all up by between 0.4 per cent and 1.1 per cent.
More broadly, fading worries over global trade and geopolitics helped lift sentiment.
North America
Wall Street ended mixed as concerns about soft smartphone demand weighed on tech stocks and pulled the Nasdaq lower while earnings optimism protected against deeper losses.
Tech stocks dragged on both the S&P 500 and the Nasdaq ahead of a big week of earnings for the sector. Chipmaker shares dropped after the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing, cut its full-year revenue target because of softer demand for smartphones.
Yields on 10-year US Treasuries rose to their highest level since January 2014 amid concerns over the growing supply of government debt and accelerating inflation.
Earnings provided a bright spot, with 18 per cent of the companies in the S&P 500 having reported, 78.2 per cent of which have beat consensus estimates.
Google parent Alphabet was up slightly after posting a 73 per cent jump in profits in the first quarter. UBS posted highest Q1 profit in three years as its investment banking arm beat expectations. The Dow Jones Industrial Average fell 14.25 points, or 0.06 per cent, to 24,448.69, the S&P 500 gained 0.15 points, or 0.01 per cent, to 2670.29 and the Nasdaq Composite dropped 17.53 points, or 0.25 per cent, to 7128.60.
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Lex Hall is a Morningstar content editor, based in Sydney
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