Fresh US data on Wednesday indicated the Fed’s persistent rate hikes are serving their purpose, but a recession may still be at bay. Sales of previously owned US homes fell for a 10th-straight month in November. But US consumer confidence rose by more than forecast to the highest since April as inflation eased and gasoline prices dropped.
“Investors are excited by the prospects of buying improving fundamentals at a cheaper price, following the past week’s selloff on Fed concerns,” said Mike Bailey, director of research at FBB Capital Partners. “In terms of macro data, improving consumer confidence is also adding to the favourable move in investor sentiment. However, I think inflation, the job market and earnings are top of mind for most investors at the moment.”
Treasuries steadied, as the 10-year yield was about 3.68 per cent after piercing 3.70 per cent on Tuesday. The yen fell against the dollar, after posting its biggest daily rally since 1998 on Tuesday. The dollar rose after falling for two days against a basket of currencies.
Dust is also starting to settle on Japan’s decision to raise the upper limit of its 10-year bond yield, though the move has set in motion bets that the BoJ will join its peers next year in raising interest rates. Surging yields have already shrunk the worldwide stock of negative-yielding debt to about $US686 billion, from an $US18.4 trillion peak reached two years ago.
Elsewhere, oil price gains extended into a third day after a report showed a drop in US crude inventories.
Other top stories
Inside the Optus hack that woke up Australia The telco’s CEO, Kelly Bayer Rosmarin, gives her first interview about the cyberattack that caused a political storm and made Australians aware of the power of their personal data.
Magellan, Perpetual, Pendal: The year funds management ate itself Australia’s once high-flying funds management sector rode the super wave for a decade. But in 2022 it crashed.
How Brookfield and EIG courted Origin Energy in deal of 2022 An August 8 letter to Scott Perkins, Origin Energy’s chairman, set the scene for a deal that has buoyed the conversation around Australia’s energy transition.
Business expects China to lift trade bans quietly, slowly As business waits for a breakthrough, Foreign Minister Penny Wong also wants economic dialogue re-established with China as well as annual leaders’ meetings.
Gas project hits pause as NSW introduces huge fines for coal companies The Albanese government is turning its attention to large-scale energy infrastructure and generation projects, saying the short-term price issues are sorted.
Today’s agenda
Local: 10.30am – Westpac leading index November 11.30am – ABS Data: Tourism Satellite Accounts: quarterly tourism labour statistics, Australia, experimental estimates
Overseas data: 8pm – UK retail sales
Market highlights
ASX futures were up 42 points or 0.6 per cent to 7112 near 6am AEDT.
- AUD +0.4% at US67.03¢
- Bitcoin -0.3% at $US16,792
- Dow +1.6% S&P 500 +1.4% Nasdaq +1.6%
- FTSE +1.7% DAX +1.5% CAC +2.0%
- Gold flat at $US1817.49 an ounce
- Brent oil +2.6% to $US82.10 a barrel
- Iron ore +3.4% to $US114.25 a tonne
United States
The S&P 500 rose 1.4 per cent as of 12.58pm New York time. The Nasdaq 100 rose 1.5 per cent. The Dow Jones Industrial Average rose 1.5 per cent. The MSCI World index rose 0.2 per cent. The yield on 10-year Treasuries was little changed at 3.68 per cent.
Europe
Germany’s 10-year yield advanced one basis point to 2.31 per cent. Britain’s 10-year yield declined two basis points to 3.57 per cent.
Commodities
West Texas Intermediate crude rose 2.6 per cent to $US78.19 a barrel. Gold futures were little changed.
