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US data smashes bonds

Stronger than expected reads on US durable goods orders, manufacturing and housing dumped US ten year bonds to levels not seen since July 2015. Global markets followed suit, and bond yields are higher across the board. The USD surged, making the 2-3% rally in industrial metals all the more impressive.

US shares made further gains, although at that stage closed European markets were in the red. The only factor militating against a further jump in Asia Pacific shares today is the already impressive performance this week. Futures markets are cautious, tipping a meagre 2 point gain for the Australia 200 index, and a fall in Hong Kong. This could lead to a U shaped trading day, with falls at the open giving way to another cash-investor led rally later in the session.

Strength in resources and AGM commentaries could dominate Australian trading. Woolworths, Woodside, Seek and South32 front shareholders today. Nickel miner Western Areas (WSA) is one to watch. The reported short position is 14.8% of issued capital, making it one of the top 5 most shorted stocks on the market. Any positive news at its AGM could see its shares skyrocket.

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