“The run of recent data – Q2 wages, retail sales, employment and monthly CPI have come in below expectations and provide no compelling reason for the RBA to hike.”
St George economist Jameson Coombs said: “We will be looking for any signs that the Board has changed its assessment of the risks, as this will be key to policy moving ahead.”
Today’s agenda
Local: Second quarter current account at 11.30am; RBA board meeting decision at 2.30pm
Overseas data: China Caixin services PMI August at 11.45am; Markit services PMI for Eurozone, UK; Eurozone July PPI at 7pm; US July factory orders and durable goods orders
Other top stories
Burke to entrench Fair Work powers over business The Albanese government’s next wave of workplace changes will put the onus on business to prove they’re not caught by the tough wide-ranging laws.
PM defiant on Qantas as WA joins Labor split Anthony Albanese declared Australia had the most competitive airline market in the world and shrugged off a growing split in Labor over blocked Qatar Air flights.
Liontown, Bald Hill lithium deals cement US critical minerals alliance Albemarle’s improved Liontown offer and Mineral Resources’ bid to snatch the Bald Hill lithium mine from a Chinese-linked suitor could entrench the US alliance.
Market highlights
ASX futures down 19 points or 0.26% to 7277 near 7.15am AEST
- AUD +0.1% to 64.60 US cents
- Bitcoin -1% to $US25,770 at 7.15am AEST
- US markets closed for Labor Day
- Stoxx 50 -0.1% FTSE -0.2% CAC -0.2% DAX -0.1%
- Spot gold -0.1% to $US1938.62/oz at 1.46pm in New York
- Brent crude +0.5% to $US89.00 a barrel
- Iron ore +0.5% to $US114.60 a tonne
- 10-year yield: US 4.18% Australia 4.09% Germany 2.57%
- US prices as of 4.24pm in New York
United States
US stock investors have gotten so confident that it’s concerning strategists at JPMorgan Chase & Co.
“There is complacency in sentiment evident, VIX is near record low and positioning has increased” to above-average levels, a team led by Mislav Matejka wrote in a note. “There is no more safety net” and FOMO — the fear of missing out — is in full swing.
The 12-month forward price-to-earnings ratio of 19 times for the MSCI USA Index is stretched at these levels, especially versus higher real yields, his team wrote. While multiples show a positive correlation with earnings-per-share momentum, earnings revisions might turn lower again, they said.
Europe
European shares ended flat on Monday as gains driven by optimism around China’s stimulus measures to revitalise its economy fizzled out, while Danish drugmaker Novo Nordisk’s shares touched record highs.
The pan-European STOXX 600 index held steady at 457.96 points at close after touching near four-week highs earlier in the day.
Europe’s technology sector gained 0.5 per cent as shares of Dutch semiconductor equipment maker ASML rose 0.8 per cent.
Miners finished up 0.6 per cent after rising nearly 2 per cent intraday, as iron ore futures rallied on optimism over top steel producer China’s policy support for its struggling property sector.
Commodities
An initiative to boost Africa’s carbon credit production 19-fold by 2030 drew hundreds of millions of dollars in pledges on Monday, as Kenyan President William Ruto opened the continent’s first climate summit.
In one of the most anticipated deals, investors from the United Arab Emirates (UAE) committed to buying $US450 million of carbon credits from the Africa Carbon Markets Initiative (ACMI), which was launched at Egypt’s COP27 summit last year.
“We must see in green growth, not just a climate imperative but also a fountain of multi-billion dollar economic opportunities that Africa and the world is primed to capitalise,” Ruto told delegates.
African leaders are pushing market-based financing instruments, such as carbon credits, or offsets, which can be generated by projects that curb emissions, usually in developing countries, such as planting trees, or switching to cleaner fuels.
