Australian Shares

Asian share markets are having a rough start to the trading week as the combination of lower trading volumes heading into the end of the calendar year combined with a lot of movement expected around central bank meetings this week increase volatility across the complex.

Friday night saw a large selloff on Wall Street due to tech stocks getting out of sync with reality on earnings while some hawkish talk by Fed officials saw more bond selloffs as Treasury yields pipped higher again.

Asian share markets are doing quite well in the final but relatively quiet session of the trading week with the USD falling overnight on the bad but good initial jobless claims showing a soft US labour market helping supporting the risk taking.

A wobbly night on Wall Street due to Oracles earnings but also a “normalised” US initial jobless claims print proving the labour market is soft as the Fed claimed in its rate cut the previous session.

Wall Street loved the rate cut from the Fed last night and the apparently neutral not hawkish future position espoused by Fed Chair Powell.

The latest Chinese inflation numbers were slightly higher than expected which has seen the potential for a BOC RRR cut next year move lower, also pushing mainland shares down as well.

Wall Street remained in a hold pattern overnight as everyone awaits the FOMC meeting with a selloff in Treasuries keeping USD somewhat supported, particularly against Yen while European shares also went nowhere.

All eyes on the RBA in its last meeting of the year today with a hawkish hold the expected outcome which gave the Aussie dollar a small boost but stocks didn’t like the result.

Overnight action on stock markets was muted given the selloff in bonds across most sovereign markets with Treasuries falling back following hawkish comments from all sides on inflationary pressures.

The latest Japanese GDP figures were the biggest catalyst here in Asia while a boost in tech stocks is seeing Chinese shares lift higher in afternoon trade.

Friday night saw modest gains across both sides of the Atlantic as Wall Street awaits this week’s FOMC meeting and the long expected rate cut from the Fed.

The Market Ear on some growing crosscurrents for stocks.

Wall Street had another slow session overnight with an unclear picture of the US labour market weighing on high expectations that the Fed will cut in next week’s FOMC meeting.

Risk markets here in Asia are pivoting more on BOJ rate hike speculation amid near certainty that the Fed’s upcoming December meeting next week will result in a cut, with tonight’s US initial jobless print in the balance given the very poor ADP private numbers recently.

The Market Ear on Santa or bust.

A slowing or deep diving US labour market (not that we would know given the lack of NFP prints) saw a lot more weakness in USD overnight as markets anticipate a full rate cut by the Fed in next week’s meeting.

The Market Ear. It doesn’t matter… …until it matters. Note the latest short term gap between the US 10 year (inverted) and SPX.

Some stability returned last night to risk markets with both Wall Street and European stocks making modest gains after scratch sessions across Asian markets yesterday.

A little bit of volatility across some risk markets here in Asia but generally equities finished where they started with the weak overnight lead from Wall Street as traders anticipate the upcoming rate cut at the Fed’s December meeting.

Overnight saw what could be the beginnings of a risk off mood as Wall Street was unable to get moving after the weekend, helped along by a dumping of crypto as Bitcoin made new lows.

As a new trading month gets underway Asian equity markets are quite mixed across the region as Japanese inflation and Chinese manufacturing contraction concerns overshadow the potential invasion of Venezuela by the Trump regime.

The Market Ear kicks us off.

Friday night saw Wall Street return from its short Thanksgiving break and aside from some technical difficulties trading was bullish across the major indicies, with European stock markets also lifting into the month end.

The Market Ear on stocks and fear. Panic gone The extreme VIX vs SPX gap is gone. Chart shows SPX vs VIX (inverted).