Daily Market Briefing, Asia Pacific

• Holding on. Markets take the latest US shutdown in stride. US equities edged up while bond yields slipped back. USD & AUD tread water.• US shutdown. No real sense of urgency to strike a deal quickly. US shutdown could drag out. This might be a negative for US growth & the USD.• Data void. US government shutdown also means US economic data, such as Friday’s non-farm payrolls report, may be put on hold. Global Trends The latest US Government Shutdown kicked off yesterday and financial markets have so far taken it in stride. European equities registered solid gains (EuroStoxx600...

• Holding firm. US equities ticked up overnight, while bond yields consolidated & USD weakened. AUD rose with AUD also outperforming on the crosses.• RBA holds. No change by RBA. Comments leant more ‘hawkish’. Sticky inflation & improving growth means another rate cut isn’t guaranteed.• US shutdown. Without a last minute deal another US government shutdown will kick off today (~2pm AEST). We think this may be a drag on the USD. Global Trends Modest moves across markets overnight with another US government shutdown looking likely to kick off today (see below). US and European equities ticked up with the...

• Risk uptick. US equities ended a 3-day losing streak on Friday. USD eased back. AUD & NZD tick up. No change expected by RBA this week.• US shutdown. US politics in focus with another shutdown looming. Last minute deal needed. A shutdown could see US data releases put on hold.• Event Radar. In addition to the risk of a US government shutdown the RBA meets (Tues). China PMIs also out (Tues) as is Eurozone CPI (Weds). Global Trends A more positive tone across markets at the end of last week. US and European equities rose on Friday with the...

• Market swings. US equities dipped again, while US yields & USD rose. NZD remains on backfoot. AUD unwound yesterday’s CPI induced gains.• AU CPI. Inflation hotter than expected in August. Data raises doubts about further RBA rate cuts. Relative policy trends can be AUD supportive. Global Trends There were a few more market wobbles overnight with US equities declining modestly for the second straight session (S&P500 -0.3%), US bond yields ticking up ~2-4bps across the curve, and the USD clawing back ground. The EUR (the major USD alternative) slipped down towards ~$1.1740 (the lower end of its ~2-week range),...