It looks like the Australian share market will open slightly weaker today as US economic and jobs data, not to mention hurricanes Helene and Milton, dampened optimism overnight.
ASX 200 futures were down 0.04%, sitting at 8,256 points, early this morning.
The path of US inflation is still the big driver of uncertainty in the markets, and while the latest consumer price index (CPI) showed a cooling inflation rate – up 0.2% for the month and 2.4% annually, the lowest in three years – it still slightly exceeded economists' expectations.
Annual core inflation was up, sitting at 3.3%, fuelling concerns that it just isn’t easing quickly enough.
Jobless claims up
In contrast, weekly jobless claims came in worse than expected, with economists attributing the surge to disruptions caused by Hurricane Helene, which blew through southern US states last week, and anticipating further impacts from Hurricane Milton, which made landfall on the coast of Florida yesterday.
As a result, market expectations for a rate cut at the US Federal Reserve’s November meeting have softened.
Comments from the Atlanta Fed president, suggesting he might skip a rate cut this year, exacerbated the bearish mood.
The Dow Jones index fell by 58 points (0.1%), the S&P 500 dropped 0.2%, and the Nasdaq shed 0.1%.
Real estate stocks, particularly sensitive to rate hikes, slid by 0.9%, while energy stocks climbed 0.8%, driven by a 3.6% jump in global oil prices.
European markets also closed slightly lower, with the FTSEurofirst 300 dipping 0.1% and the UK's FTSE 100 slipping 0.1%, as several companies, including Tesco (LON:TSCO), traded ex-dividend.
Currencies and commodities
Currencies showed mixed performance against the US dollar during European and US trading.
The Euro declined from US$1.0953 to US$1.0898, ending near US$1.0935 by the US close. The Australian dollar dropped from 67.41 US cents to 67.12 US cents, recovering slightly to trade around 67.40 US cents at the close.
Meanwhile, the yen strengthened from 149.46 yen per US dollar to JPY148.41, before settling near JPY148.55 by the close of US trade.
In commodities, oil prices surged on concerns over US fuel demand and potential supply disruptions due to Hurricane Milton.
Brent crude rose 3.7% to US$79.40 a barrel, while US Nymex crude gained 3.6% to US$75.85 a barrel.
Base metals also benefited from renewed hopes of a Chinese stimulus package, with copper futures up 0.7% and aluminium gaining 2.3%.
Gold futures rose 0.5% to US$2,639.30 per ounce, supported by expectations of a potential US rate cut next month, while iron ore prices slipped 0.7% to US$105.81 per tonne on continued uncertainty around China’s fiscal stimulus plans.
Market snapshot
- Australian dollar: +0.3% to 67.40 US cents
- S&P 500: -0.2% to 5,780 points
- Nasdaq: -0.1% to 18,282 points
- FTSE: -0.1% to 7,237 points
- EuroStoxx: -0.2% to 519 points
- Spot gold: +0.8% to $US2,629/ounce
- Brent crude: +3.3% to $US79.12/barrel
- Iron ore: +1.2% to $US106.10/tonne
- Bitcoin: -1.3% to $US59,630
Source: ABC