Originally published by Rivkin Securities
The Dow Jones closed 0.61% higher overnight after opening up and drifting higher throughout the session. The Nasdaq 100 closed flat even as some of the big tech names closed higher, such as Facebook (NASDAQ:FB) which climbed 1.72%. Tesla (NASDAQ:TSLA) shares bounced almost 5% even as the Department of Justice launches a criminal inquiry into the tweets sent out by Elon Musk declaring that the company would be taken private.
The US 10-year bond yield held above 3% overnight, currently at 3.06% after reaching as high as 3.09% earlier in the day. This is a crucial level for the 10-year yield as from a technical point of view, a break above 3.11% could open the path for significant further upside. The yield curve has steepened slightly although is still very flat by historical standards. The 2-year/10-year spread is currently 27 basis points meaning that the 10 year bond only yield 0.27% more than the 2-year bond.
Oil prices jumped as inventories drew down by more than expected, marking the fifth straight week of draws. US commercial inventories are now at a 3.5 year low although we are now entering the time of year when inventories usually begin to climb as refinery maintenance season begins. There are several factors driving the oil market at the moment, one of which is the expected supply disruption that is expected to result from the sanctions on Iranian oil that are due to begin in November.
ASX 200 futures are down 4 points this morning.
Data Releases:
- UK Retail Sales 6:30pm AEST