ASX set to fall. SPI futures down 77 points or 0.87%.
Wall St mostly higher as the AI trade bounced. The Dow fell 0.07%, the S&P 500 up 0.41% and the Nasdaq rose 1.11%.
Stocks ended off the best levels. Breadth was negative, with the equal-weight S&P 500 lagging by ~70bp. Discretionary (up 2.73%) and Technology (up 1.19%) were the only sectors to outperform. Utilities (down 1.97%), Real Estate (down 1.17%) and Financials (down 0.79%) were the worst. The VIX fell 7.75%.
Treasuries were weaker, near the worst levels, with a big move at the short end. The 2-year rose 7.0bp to 4.78%, the 10-year 7.1bp to 5.15% and the 30-year 5.4bp to 5.48%. The Australian 10-year rose 4.3bp to 5.29% and the Australian 2-year 3.4bp to 4.93%.
The Technology rebound sapped haven demand and traders rebuilt bets on Fed hikes next year, still pricing a December hike. China cut its Treasury holdings to an 18-year low in August. The Fed is in blackout ahead of the 28 October FOMC. Wells Fargo called it "one of the weakest starts to EPS season in history".
In Europe, markets were sold off - the STOXX 600 fell 0.80%, the FTSE 100 down 1.08%, the DAX down 1.18% and the CAC off 1.11%. French banks and bonds led the losses after a weekend of violent civil unrest, with the French 10-year up 14bp. UK banks fell on budget tax fears. The Euro 10-year rose 3.8bp to 3.47% and the UK 10-year 6.1bp to 5.44%.
The US dollar index rose 0.20% to 101.99. The AUD rose 0.47% to 69.77c. Bitcoin rose 0.39% to $82,000.
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