While we’re set to get the RBA’s next rate decision tomorrow – which all big bank analysts think is going to be a hike – the ASX200 has followed Wall Street’s green Friday with a relatively solid day, up +0.3% as at 2pm AEST.
In the background, however, economists and market-watchers alike are nervous around an ongoing global bond-sell off pushing Treasury yields higher.
At the time of writing, the Australian 10Y bond yield has climbed to 5.4% for the first time since mid-2011; over in the states, the US 10Y bond yield has hit 5.2%.
That latter figure sees the US10Y hit its highest yield since 2007 – before the 2008 Global Financial Crisis (GFC). For what it’s worth, Brent Crude is trading at US$106/bbl a/a 2pm AEST.
But it’s the Australian bond yield that’s concerning Treasurer Jim Chalmers on Monday. While the nation somehow found A$6B in savings in a budget revision; Chalmers has today declared the bond yield puts ‘serious’ pressure on the national budget.
All in all, the Federal ALP looks like it’s about to start spending more on interest payments on debt than it does on the national Medicare scheme; at the same time, this government is close to becoming Australia’s highest-taxing in the country’s history.
But, on the local stock market, there were bright spots. Northern Star shares jumped some +7% intraday as the gold miner fielded a takeover offer from South Africa’s Gold Fields Ltd; elsewhere, Dateline Resources jumped some +42% as the US gov’t moved to support a resumption of operations at the company’s gold and REE mine.
Dateline Resources was at one point named by Donald Trump in a Truth Social post which put it back on the map after last October’s AU-US critical minerals supply meeting between Albo and the US President.
The day’s worst performing sector down-under was the tech index, currently down -25% YTD following repeated concerns from the North American tech space where AI companies are now declaring AI an existential risk; helping drag down the XTX is that crown jewel Wisetech Ltd is down -66% YoY.
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