Originally published by Rivkin Securities
While European stock indices were flat, US stocks managed to rally with the S&P 500 closing 0.37% higher. The FTSE 100 appears to be struggling due to a rising pound which is benefiting from optimism about a Brexit deal being signed in the next couple of months. The pound is currently at a one month high against the US dollar. Apple's (NASDAQ:AAPL) share price climbed 2.5% as the new iPhone launch event will occur today although interestingly, Apple is now the US’s most shorted company. The company market capitalisation recently exceeded US$1tn and traders are obviously betting that this won’t last.
Oil prices jumped overnight as American Petroleum Institute inventory data showed a large drawdown in inventories although this was partially offset by a rise in gasoline inventories. The WTI oil price is currently US$69.83, just below the $70 level that has proven to be a resistance level since mid-July.
US bond yields have climbed substantially over the last month, currently at 2.98%, and are ready to make another pass at breaking through the 3.0% level. So far the yield has failed to hold above this level for an extended period of time as it has tended to break down shortly after rising above it. Over the past month, the 2-year yield has risen even more than the 10-year yield which has further flattened the yield curve. The spread between 10-year and 2-year government bonds is now just 24 basis points, representing an extremely flat yield curve.
ASX 200 futures are currently down 14 points.
Data Releases:
- US PPI 10:30pm AEST