Global Markets Update
- U.S. equity markets closed lower overnight, with the Dow Jones down -0.5% and both NASDAQ and S&P 500 down -0.6%, amid new signals that the Federal Reserve may rein in ultra-loose monetary policy soon with non-voting members of the FOMC making hawkish monetary comments, urging the Fed to start tapering its asset purchase program. U.S. economic growth in 2Q21 was revised slightly higher with inflation-adjusted GDP increasing at a 6.6% annualized rate during the period, compared with an initially reported 6.5%, reflecting stronger business investment and exports than previously estimated. Applications for U.S. state unemployment rose for the first time in five weeks, with initial unemployment claims increasing by 4k to 353k in the week ended August 21, though still near pandemic lows.
- Long-dated U.S. treasury yields were mixed, with the 2-Yr yield flat at 0.239% and the 10-Yr yield higher at 1.348%.
- European markets. European equity markets closed lower overnight, with the Stoxx Europe 600 down -0.3% and both the U.K. FTSE 100 and German DAX declining -0.4%, as markets turned cautious after two explosions in Afghanistan outside Kabul’s international airport killed 12 U.S. service members and at least 13 Afghans and wounded dozens.
- Asian markets. Asian equity markets closed mostly lower overnight, with both the Hang Seng and Shanghai Composite down -1.1%. KOSPI declined -0.6%, after South Korea’s central bank raised interest rates by +25bps to 0.75% and indicated more hikes remain in the pipeline as financial risks pose a bigger threat to the economy than the latest virus outbreak. Nikkei 225 closed +0.1% higher.
- WTI oil is trading at US$67.86 a barrel. Iron ore price is at US$145.92 per ton. Spot gold is trading at US$1,792 per oz.
ASX Market Update
- ASX performance. The ASX 200 closed -0.54% lower yesterday.
- Appen Ltd (APX) slumped -21.4%, after flagging a hit to its FY21 profit from investments. Blackmores Ltd (BKL) surged +15.4%, after announcing it remains on track to deliver strong sales growth in international and China units. The A2 Milk Co Ltd (A2M) declined -11.8%, after reporting FY21 net income of NZ$80.7m, down -79% y/y and scrapping dividend.
- Today’s trading. In Australia, retail sales data is to be published.