New York markets closed with modest gains for the S&P 500 and Nasdaq Composite, as bond yields surged amid heightening expectations of continued interest rate increases. The yield on the 10-year note climbed 7 basis points to 5 per cent by late US trading. Bitcoin experienced a significant rally, topping US$81,000 with a more than 6 per cent rise, reflecting a dynamic global market environment.
Economists at Bank of America have reaffirmed their forecast that the Federal Reserve will lift rates in October and December, with strategists at the bank advising investors to prepare for rates potentially rising above 5 per cent. Angelo Kourkafas, senior global strategist of investment strategy at Edward Jones, commented on the situation, stating, “While the latest move by the Fed isn’t likely one-and-done, it also doesn’t look to us like the start of an aggressive rate-hiking cycle.” He added that the Fed is not as far behind the curve as it was in 2022.
Closer to home, ASX 200 futures are pointing down 57 points, or 0.7 per cent, to 8711, signalling a cautious opening for the Australian market. The immediate focus for local investors is the release of August’s jobs data on Thursday, the last major data print before the Reserve Bank of Australia’s September 29 policy meeting. NAB economists expect employment to rise by at least 20,000, leaning towards an unemployment rate of 4.4 per cent, while consensus looks for 4.5 per cent.
Next week will also feature a series of public appearances by central bank officials following recent policy meetings. RBA assistant governor Sarah Hunter is scheduled to appear on The Pay Off 9Now Podcast with Sylvia Jeffreys on Tuesday at 5am AEST. Later that day, at 1pm AEST, RBA governor Michele Bullock will participate in a fireside chat with the Committee for Economic Development of Australia (CEDA) in Sydney.
