Consumer discretionary as well as real estate and utilities were up.

Today’s agenda

Local: February retail at 11:30 a.m.; Federal budget at 7:30 p.m. AEDT

Overseas data: US FHFA house prices, January S&P CoreLogic CS housing prices, March consumer confidence index

Market Highlights

ASX futures up 7 points or 0.1% at 7384 around 4:05 a.m. AEDT

  • AUD -0.3% to 74.91 US cents
  • Bitcoin on bitstamp.net +5.6% to US$47,415.57 as of 4:15 a.m. AEDT
  • On Wall St around 1:15 p.m.: Dow -0.6% S&P500 -0.2% Nasdaq +0.1%
  • In New York: BHP -0.5% Rio -1.8% Atlassian +3.4%
  • Tesla +7.5% Apple -0.4% Amazon +1%
  • In Europe: Stoxx 50 +0.5% FTSE -0.1% CAC +0.5% DAX +0.8%
  • Spot gold -1% to $1939.24 an ounce at 1:10 p.m. PT
  • Brent crude -6% to $113.40 a barrel
  • US Oil -6% to $107.10 a barrel
  • Iron ore +0.1% to $152.40 per tonne
  • 2-year yield: United States 2.32% Australia 1.76%
  • 5-year yield: United States 2.53% Australia 2.67%
  • 10-year yield: United States 2.45% Australia 2.90% Germany 0.57%
  • US prices at 1:12 p.m. in New York

From today’s financial review

Record unemployment numbers to spur strong wage growth: Tuesday’s federal budget projects an unemployment rate of 3.75%, which the government says will be the strongest wage growth in a decade.

Conflict looms over ASX’s CHESS delay: Significant governance issues plague the project thanks to a strong past connection between a non-executive director and senior executive, writes Tony Boyd.

For better coverage of the federal budget, Click here.

United States

President Joe Biden unveiled a $5.8 trillion budget request intended to appease moderate Democrats, with a proposal that emphasized deficit reduction, additional funding for police and veterans and the flexibility to negotiate new social spending programs.

Congress has always set aside presidential budgets, but they are a key messaging tool.

Biden is asking for more than $2.5 trillion in tax hikes for the wealthy and big business over a decade, on top of the nearly $1.5 trillion in increases included in the House version of the Build plan Back Better.

Proposal adds a minimum tax of 20% on unrealized capital gains for households worth at least $100 million, a political win for progressives who pushed Biden to target the mega-rich .

AMC Entertainment CEO Adam Aron says the movie theater chain will embark on more “transformational” deals to capitalize on interest from retail investors following its bet on a gold and silver miner operator. troubled money.

HP said it would buy audio and video device maker Poly for $1.7 billion in cash as it seeks to capitalize on a boom in demand for electronics led by hybrid working.

Europe

European stocks gained on Monday, led by automakers and defensive sectors, as hopes for a peace deal between Russia and Ukraine boosted sentiment, while a drop in crude prices weighed on pressure on oil stocks.

The pan-European STOXX 600 index gained 0.1%. The benchmark is about 8% off its all-time high from early January.

Rating agency S&P Global cut its eurozone growth forecast for the year to 3.3% from 4.4% previously, saying rising energy prices would affect household purchasing power.

German chemicals giant BASF gained 1.6% after HSBC upgraded the stock to “buy”, saying “resilient demand” will likely help first-quarter earnings.

French utility EDF fell 0.3% after saying it was expected to announce further delays and cost overruns for its Hinkley Point C nuclear power plant project.

UK lender Barclays fell 4.1% after disclosing a loss of around £450m on mismanaged structured products.

Carlsberg rose 3.5% after the Danish brewer announced it would leave Russia with brewing giant Heineken.

Britain’s Ted Baker said he rejected two unsolicited takeover proposals from private equity firm Sycamore Partners Management because they significantly undervalued the fashion retailer.

Asia

Chinese blue chips closed lower on Monday after a lockdown in Shanghai to curb the spread of COVID-19 infections raised fears of an economic slowdown.

The blue-chip CSI300 index fell 0.6% to 4148.47, while the Shanghai Composite Index gained 0.1% to 3214.50 points.

In Hong Kong, technology propelled stocks higher to start the week. The Hang Seng index rose 1.3% to 21,684.97, while China’s corporate index gained 1.5% to 7,396.25 points.

Meituan jumped 11.6% after the food delivery giant reported better-than-expected fourth-quarter revenue growth on Friday.

Hong Kong-listed tech companies gained 2.6%, with Alibaba Group and Tencent Holdings up 3.5% and 2.8%, respectively.

Currencies

Federal Reserve Chairman Jerome Powell, relying on the steep slope of the short-term Treasury yield curve to justify possible half-point rate hikes, “ignores that forward curves are deeply reversed,” signaling recession risk, according to Citigroup strategist Jason Williams.

“In our opinion, Powell is overly trusting the wrong yield curve,” and “not getting the clear he thinks,” Williams wrote. Based in part on the deeply inverted Eurodollar forward curve from June 2023 to June 2024, Citigroup calculates that the risk of a US recession in the next twelve months has risen to 20% from 9% in February. .

The dislocation between the spread Powell is focusing on and the Eurodollar curve is the largest since 1994, when a series of aggressive Fed rate hikes were followed by cuts the following year, according to Citigroup.

**

Over the past two decades, global government bonds posted a median total return of 1.1% in April, more than any other month, wrote Morgan Stanley strategists led by Matthew Hornbach in a note.

Soaring yields have reduced the pile of negative-yielding government bonds globally to just $2.9 trillion, or 7% of total outstanding, from 50% in August 2019, according to Morgan Stanley .

“Hope seems lost for global government bonds,” Morgan Stanley strategists wrote. “But as the saying goes, ‘It’s always darkest before dawn.’ The calendar suggests cloud clearing ahead.

Morgan Stanley advises its clients to bet on a flatter US yield curve. Strategists also warned that even after the recent spike in yields, US Treasuries still “don’t look attractive” to overseas investors after hedging currency risk.

Merchandise

Dalian iron ore hit a seven-week high on Monday and the Singapore Stock Exchange’s benchmark rebounded above $150 a tonne as traders cheered China’s decision to raise its injection of short-term funds to counter any possible shortage of liquidity in the market.

Other steel ingredients traded on the Dalian Commodity Exchange and steel prices on the Shanghai Futures Exchange also rose, despite risk aversion sentiment in other assets amid heightened COVID-19 restrictions in China.

The most-traded Dalian iron ore, for September delivery, ended the day up 4.4% at 870 yuan ($136.52) a tonne, after hitting 882.50 yuan, its all-time high. since August 30.

The most active iron ore contract in May on the Singapore Stock Exchange rose 0.4% to $154.80 a tonne, at 0721 GMT.

**

OPEC and its allies have signaled they still see no need to adjust their oil supply plans even as the Russia-Ukraine dispute threatens the biggest market disruption in decades.

“We will not add resources if the market is balanced and the resources are in the market,” UAE Energy Minister Suhail Al-Mazrouei told a conference in Dubai. OPEC+ is not focused on whether the specific loss of Russian shipments causes an imbalance, he added.

A number of delegates said privately that they expected the Organization of the Petroleum Exporting Countries and its partners to stick to their long-standing plan and ratify another modest increase in supply when of their meeting on Thursday.

Australian Sharemarket

BHP leads ASX to small gain: The S&The P/ASX 200 index added just 6.2 points or less 0.1% to 7,412.4; BHP Group rose 2.3% to $50.92.

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