Good morning team, Chris Conway your Chief Market and Trading Strategist here with your First Look.
SPI futures are pointing to a 15-point fall on the open, after US markets sharply reversed course in the overnight session.
At 4:30am this morning, the Dow was up 140 points but ended down 40.
The release of the minutes from the Federal Reserve’s March policy meeting, which signalled a pending balance sheet policy shift, was the cause of the reversal.
There was a discussion that the US central bank could start to pare its balance sheet later this year and that in turn could slow the pace of interest rate hikes going forward. Fed policymakers also talked about the bull market rally in equities, and whether it was over done.
Some participants viewed equity prices as quite high relative to standard valuation measures. It was observed that prices of other risk assets, such as emerging market stocks, high-yield corporate bonds, and commercial real estate, had also risen significantly in recent months.
What’s on today:
Local data: RBA deputy governor Debelle speaks in Sydney
Overseas data: China Caixin Services PMI March; Japan Consumer Confidence March; ECB account of latest monetary policy meeting, ECB’s Draghi speaks in Frankfurt, ECB’s Praet speaks in Frankfurt, ECB’s Constancio speaks in Malta, German Factory Orders February; Fed’s Williams speaks in Frankfurt, US weekly initial jobless claims
China’s Xi Jinping meets with Donald Trump in Florida for two days of talks
SPI futures down 15 points 0.3% to 5844
AUD +0.1% to 75.68 US cents (Overnight range: 75.60 – 75.87)
On Wall St, Dow -0.2%, S&P 500 -0.3%, Nasdaq -0.6% (earlier the S&P 500 was up 0.8%)
In New York, BHP +0.7%, Rio -0.7%
In Europe, Stoxx 50 -0.3%, FTSE +0.1%, CAC -0.2%, DAX -0.5%
Spot gold -0.5% to $US1249.99 an ounce
Brent crude +0.3% to $US54.35 a barrel
Iron ore (Metal Bulletin) +2.6% to $US81.54 a tonne
Dalian iron ore +0.4% to 567 yuan
LME aluminium +1.2% to $US1961 a tonne
LME copper +2% to $US5895 a tonne
10-year bond yield: US 2.34%, Germany 0.25%, Australia 2.60%
What happened overnight: