Originally published by Rivkin Securities
It was another quiet night for US stock markets with both the Dow Jones and S&P 500 trading within a very narrow range and closing almost unchanged while in European markets the DAX and FTSE, both closed moderately higher. With little data out last night there were few cues for markets to work from.
Bond prices were stable overnight after sharp falls in the prior trading sessions. The Australian 10-year bond yield is up 0.34% over the last month to 2.73% but is still shy of the 2.97% year-to-date high reached in March. The increase in bond yields appears to be a delayed reaction to the rate hikes, as well as the prospect of future rate hikes in the US. In Australia, economists are split on whether the RBA’s next move will be a cut or hike although the majority expect the current level of rates to remain throughout 2018.
Oil prices have failed to rally despite recent draw-downs in US inventories. Traders are worried that increasing supply from Nigeria and Libya, both of which are recovering from internal conflict, will continue and further undermine the output caps agreed to by OPEC and Russia. Nigeria and Libya were originally exempt from the cuts although OPEC appears to want to bring them in on the agreement to limit further supply increases.
ASX 200 futures are pointing to a flat open this morning.
Data releases:
- NAB Business Confidence 11:30am AEST