Global Markets Update
- U.S. equity markets closed higher overnight, as speculation the Federal Reserve will tighten policy at a gradual pace outweighed concern about the central bank’s hawkish pivot, however, sentiment was kept in check following comments by former Treasury Secretary Lawrence Summers and billionaire investor Ray Dalio that the U.S. is headed for a period of overheating and inflation that could threaten the economic recovery. The Dow Jones was up +1.8%, the S&P 500 up +1.4% and NASDAQ closed +0.8% higher.
- Long-dated U.S. treasury yields were higher, with the 2-Yr yield at 0.256% and the 10-Yr yield at 1.490%.
- European markets. European equity markets closed higher overnight, with the Stoxx Europe 600 up +0.7% and U.K. FTSE 100 closing +0.6% higher, as M&A action in the U.K. grocery sector outweighed recent worries over a more hawkish stance by the U.S. Federal Reserve. German DAX gained +1.0%.
- Asian markets. Asian equity markets closed mostly lower overnight, with the Shanghai Composite up +0.1%, after China announced it is tightening its grip on the supply of steel and coal, measures that at the very least run counter to the broader effort to tame commodities inflation. The Hang Seng was down -1.1% and KOSPI closed -0.8% lower. Nikkei 225 declined -3.3%, amid concerns including Japan’s late vaccination drive and murky prospects for the Tokyo Olympics this summer.
- WTI oil is trading at US$73.57 a barrel. Iron ore price is at US$215.79 per ton. Spot gold is trading at US$1,783 per oz.
ASX Market Update
- ASX performance. The ASX 200 closed -1.81% lower yesterday, led by declines in Banks (-3.73%) stocks, which slumped the most in over a year after a hawkish pivot by the Federal Reserve dented the global reflation trade. Australia’s retail sector boomed in May, with retail sales increasing +0.1% month-on-month, as cashed up and confident households spent up big.
- NRW Holdings Ltd (NWH) declined -7.0%, despite getting letter of intent for $526m mining services contract for Karara Iron Ore mine.
- Today’s trading. No major data is to be published.