Good morning. Wall Street opened the third quarter lower, with the S&P 500 down 0.2% to 7,483 and the Nasdaq down 0.7% to 26,040 as bank stocks rose and chipmakers fell. Federal Reserve chair Kevin Warsh, speaking at the European Central Bank's forum in Sintra, said inflation risks have come down but declined to signal the Fed's next decision, and Treasuries sold off: the 10-year yield rose 6 basis points to 4.44% and the 2-year 4 basis points to 4.14%. The US dollar index firmed 0.2% to 101.42. Brent crude fell 2.4% to US$71.14 as more oil moved through the Strait of Hormuz. Gold added 0.5% to US$4,045 and bitcoin rose 3.1% to US$60,370, back above US$60,000 after Warsh's remarks.
The overnight data was mixed ahead of tonight's US June payrolls. ADP's private-payrolls count rose 98,000 in June, below the 118,000 economists expected and down from 122,000 in May, while the ISM manufacturing index eased to 53.3 from 54.0 and stayed above the 50 line. Eurozone inflation fell more than expected to 2.8% in June, a fourth month above the ECB's 2% target. The United States declined to renew its USMCA trade agreement with Canada and Mexico, starting a countdown to expiry with annual reviews in the meantime.
Locally, the ASX 200 closed the prior session down 0.5% at 8,779 and the Australian dollar eased 0.2% to US68.99 cents. The Reserve Bank's cash rate sits at 4.35% and the 10-year bond yield at 4.77%. KPMG analysis reported by the Guardian put Australia's national mortgage burden above its 1989 peak, when lending rates reached 17%. The Reserve Bank and Transport for NSW warned that rapid demand for AI data centres could compete with housing and logistics for industrial land. Iron ore held at US$100.20 a tonne, steadying the large miners.
Markets continue to price steady policy near term after the RBA's June minutes struck a hawkish tone.
Urban economist Terry Rawnsley said higher house prices and larger loans outweigh today's lower interest rates.
Some are calling for new data-centre approvals to be paused until stronger protections are considered.
Treasuries sold off, the 2-year yield rising 4 basis points to 4.14% and the 10-year 6 basis points to 4.44%, with futures still pricing the risk of a rate rise this year.
Planned layoffs fell 53% and the ISM manufacturing index eased to 53.3 from 54.0, staying above the 50 expansion line; June non-farm payrolls are due tonight AEST.
It was a fourth straight month above the European Central Bank's 2% target.
The move points to renewed institutional appetite for retail property, the segment listed through Scentre Group, which operates the Westfield centres, and Vicinity Centres.
The price has stayed above US$100 through the past week, down 0.3% over five sessions.
Bullion has recovered 1.4% over five sessions after a weak June quarter.
Oil is down 3.5% over five sessions as crude flows through the Strait of Hormuz recover.
The ruling can be appealed; PriceRunner is the price-comparison business at the centre of the case.
Enbrel is one of Amgen's larger-selling products, and the ruling halts a closely watched state-level pricing experiment.
The plan would let outside developers run models on Meta's existing AI infrastructure, a revenue line alongside its advertising business.
The pledge comes as memory-chip prices climb on AI-server demand, after Micron reported record quarterly earnings last week.
Goldman Sachs, JPMorgan and Jefferies underwrote the deal; Uber holds a stake in the company.
“Inflation risks have come down, but there is more work to be done, and we will deliver price stability.”
“Canada's economy remains soft, and inflation is still running clearly above target.”
“The United States did not agree to renew the USMCA in its current form.”
“Coding agents now author 27% of committed code in the engineering teams using these tools, with rollout continuing across the organisation.”
“The consumer is going to continue to be pressured. We expect them to be more deliberate in how and where they shop, buying more on promotion and less on everyday prices, all with value at the forefront.”
“I am equally confident that fiscal 2027 will be a better year for General Mills, with our base price investments behind us and our focus shifting toward innovation and renovation.”
For wholesale clients only. Prepared by Arc Point OCIO Pty Ltd (ACN 693 569 765), Corporate Authorised Representative (CAR 1319046) of Capella Advisory (AFSL 550125), for wholesale clients within the meaning of the Corporations Act 2001 (Cth); it is not intended for, and should not be relied on by, retail clients. This note is factual market reporting and general information, with any arcpoint view clearly labelled as such. It is not personal advice and does not take into account any person's objectives, financial situation or needs. Information is drawn from sources believed to be reliable but its accuracy and completeness are not guaranteed. Past performance is not a reliable indicator of future performance.
Sources: Yahoo Finance, FRED, RBA, company filings.