US bond yields rose again last night making it difficult for bargain hunters to unleash their animal spirits on the stock market.
Potential buyers are aware that a recovery rally could easily gain momentum on the back of the relative value created by the sell-off in stocks. However, rising US bond yields were the catalyst for the recent savage sell-off and buyers may be cautious if the bond-selling trend re-establishes.
The US Dollar was assisted by news that the US Senate has avoided a government shutdown. However, Dollar strength along with rising bond yields may also indicate that markets are continuing to adjust to last week’s news of improving US wage growth.
US shale oil producers have proven good to their word, increasing production to take advantage of the recent rally in the oil price. This may leave the mid-$60 range as a cap on the US oil price at this stage.
The Australian profit season is now underway in earnest with several major companies reporting today. NAB produced a steady quarterly report that included early progress on its productivity investment program but demonstrated that the major banks are finding it difficult to achieve significant underlying revenue growth in the current environment. Click here for further comment on the NAB result.
Disclaimer: CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.