Australian shares are set to rise this morning as Wall Street rebounded from Thanksgiving celebrations with a subdued session overnight. Perhaps traders were still in a food coma as the Dow Jones slipped 0.2%, the S&P 500 lost the same amount and the Nasdaq fell 0.1%.
ASX futures showed a slight rise of 0.1% to 7,104 this morning. The increase won’t do much to offset yesterday’s 0.8% decline, but the index is still poised for a 3.8% rise in November, marking its second-largest monthly growth in 2023 – a slow year.
In contrast, global bond yields, oil prices and the dollar experienced notable moves. Gold prices broke through $2,000 an ounce, while the Australian dollar climbed to over 66 US cents, a high not seen since August.
Black Friday and Cyber Monday influence sales data
Investors’ focus in Australia now shifts to October retail sales, which are due to be released at 11.30am this morning. National Australia Bank (NAB) forecast retail sales to fall 0.4%, versus a consensus estimate of a 0.2% increase.
This forecast reflects evolving consumer spending habits influenced by Black Friday and Cyber Monday sales. NAB warns against over-interpreting the potentially subdued October result as it points to changing trends in year-end retail spending.
In European markets, currency movements against the US dollar presented a mixed picture. The euro experienced a slight decline, falling from $1.0957 to $1.0924 before stabilizing at $1.0955 in US trading. This fluctuation reflects broader market reactions to economic indicators, including the decline in U.S. Treasury yields due to weaker-than-expected U.S. home sales data.
Changes in US Treasury yields, with the 10-year US Treasury yield falling 10 points to 4.38% and the 2-year Treasury yield falling 7 points to 4.89%, also contributed to the momentum of the foreign exchange market at.
These changes in currency values are a sign of investor caution and the interplay of various economic factors in the European financial landscape.
Currencies and raw materials
In financial markets, US Treasury yields fell after monthly US home sales data fell significantly. The U.S. Treasury Department’s sale of $54 billion of two-year notes and $55 billion of five-year notes received mixed reactions, with yields settling at 4.887% and 4.42%, respectively.
The foreign exchange markets developed differently against the US dollar. The euro fell slightly from $1.0957 to $1.0924 and closed near $1.0955.
The Australian dollar’s rise to 66.13 US cents was fueled by a weakening US dollar, supported by the prospect of US interest rate cuts next year and a stronger Chinese yuan.
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The Japanese yen rose to 148.53 JPY from 149.31 yen per US dollar and closed at 148.65 JPY.
Oil prices continued their downward trend, influenced by concerns about oversupply and muted expectations of OPEC production cuts.
Brent crude fell 0.7% to $79.98 a barrel and U.S. Nymex crude fell 0.9% to $74.86 a barrel. West Texas Intermediate settled below $75.
In the metals market, prices for base metals, including copper and aluminum, fell after Chinese industrial firms’ profits fell.
Meanwhile, gold futures rose 0.5% to $2,012.40 an ounce, with spot gold trading near $2,014 at the close in the U.S., reflecting increased investor interest in the precious metal amid broader reflects market uncertainties.
What happens with small caps?
The S&P/ASX Small Ordinaries closed at 2,671.30 yesterday, down 0.47% from the previous day.
Make news this morning that you can read more about throughout the day with Proactive:
Read more about Proactive Investors AU
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