The broad markets were relatively quiet on Monday due to the public holiday in the US stocks markets. Market sentiment remains fragile after a three-week drop on Wall Street amid a resurgence in the global bond yields, the EU energy crisis, and China’s renewed Covid lockdowns. The RBA rate decision is due in today’s Asian session, which will be followed by the BOC meeting on Wednesday, and ECB on Friday.
- US stock markets closed on Monday due to the labor public holiday, with equity futures slightly higher in thin liquidity. The Dow Jones Industrial Average futures were up 0.39%, the S&P 500 futures rose 0.30%, and Nasdaq futures advanced 0.26%.
- The US dollar index hits a fresh 20-year high as the Eurodollar tumbles to a new 2-year low of 0.9877 at a day low against the greenback. EUR/USD bounced back to 0.9931, while USD/JPY topped 140, rising to 140.63 this morning (AEST 7 am).
- OPEC+ decided on an output cut of 100,000 barrels per day in October to stabilize oil prices amid a downgrade in the demand outlook. The WTI futures were up 2.24%, to US$88.82 per barrel. The Brent futures were up 2.92%, to US$95.74 per barrel.
- The conservative party candidate, Liz Truss becomes the new UK Prime Minister, beating her rival Rishi Sunak by 21,000 votes, or 57% vs. 42% in the turnout. The new leader will be facing the challenges of rampant cost-of-living and an imminent winter energy crisis. The British pound jumped 41 pips or 0.36% against the US dollar.
- Asian stocks are set to open higher with all eyes on the RBA rate decision today. ASX 200 futures were up 0.12% after a positive close on Monday. The Reserve Bank of Australia is expected to raise the cash rate by another 50 basis points to 2.35% later today and may keep the hawkish stance to fight inflation.
- Yuan continued to weaken to a two-year low against the US dollar, approaching to a psychological level of 7.0. China vows to accelerate its stimulus measures in the third quarter at a national meeting, aiming to stimulate domestic spending, investment, and labor markets. China’s economy faces severe challenges amid the recent renewed covid lockdowns in some parts, such as Chengdu and Guiyang.