Daily Update 10 August, 2021

Global Markets Update

U.S. equity markets closed mostly lower overnight, with the Dow Jones down -0.3%, NASDAQ up +0.2% and S&P 500 declining -0.1%, with investors rotating into defensive sectors, as new coronavirus cases in the U.S. surged to the highest weekly level since early February, fueled by the highly transmissible delta variant with deaths rising by +49%, the biggest weekly increase since December.

Long-dated U.S. treasury yields were higher, with the 2-Yr yield at 0.218% and the 10-Yr yield at 1.325%.

European markets. European equity markets closed mostly higher overnight, with the Stoxx Europe 600 up +0.2%, U.K. FTSE 100 up +0.1% and German DAX declining -0.1%.

Asian markets. Asian equity markets closed mostly higher overnight, with the Shanghai Composite up +1.1%, after PBOC reiterated it will keep monetary policy prudent and increase the autonomy of macro policies, and said inflation pressures in the economy are “controllable,” however, flagged risks to the growth outlook pointing “the recovery of the domestic economy is still not solid and remains unbalanced…small businesses are particularly hard hit due to surging commodity prices and noted there’s pressure on bad assets and shadow banking to rebound.” KOSPI was down -0.3%, after Moderna Inc announced it will supply South Korea with less than half the planned number of vaccine doses in August due to production problems. The Hang Seng was up +0.4% and Nikkei 225 was closed for a holiday. China’s PPI surged +9% yoy in July as commodity prices climbed, while CPI increased +1% yoy and core CPI (which strip out volatile food and fuel costs) rose +1.3% yoy, the most in 18 months.

WTI oil is trading at US$66.79 a barrel. Iron ore price is at US$170.90 per ton. Spot gold is trading at US$1,730 per oz.

ASX performance. The ASX 200 closed flat yesterday, after RBA Governor Philip Lowe stated he cannot rule-out Australia slipping back into recession amid new lockdowns.

Suncorp Group Ltd (SUN) was up +7.8%, after reporting FY21 cash profit of A$1.06bn, up +42% over pcp, and announcing an on-market buyback of as much as A$250m and special dividend of A$0.08.