ASX set to rise on RBA day, Wall Street erases losses; $A stronger
After recovering from an initial jolt, US stocks, bonds and the value of the US dollar drifted through a quiet Monday following the latest reminder that the US government may be hurtling toward an unsustainable mountain of debt.
The S&P 500 edged up by 0.1 per cent after Moody's Ratings became the last of the three major credit-rating agencies to say the US federal government no longer deserves a top-tier 'Aaa' rating. The Dow Jones added 137 points, or 0.3 per cent, and the Nasdaq composite inched up by less than 0.1 per cent.
The Australian sharemarket is set to advance, with futures at 6.35am AEST pointing to a rise of 66 points, or 0.8 per cent, at the open. The ASX lost 0.6 per cent on Monday. The Australian dollar strengthened. It was 0.7 per cent higher at 64.52 US cents at 5am AEST.
The Reserve Bank announces its interest rate decision at 2.30pm AEST, with a 0.25 percentage point cut expected.
In the US, Moody's pointed to how the US government continues to borrow more and more money to pay for its expenses, with political bickering making it difficult to either rein in Washington's spending or raise its revenue in order to get its ballooning debt under more control.
Loading
They're serious problems, but nothing Moody's said is new, and critics have been railing against Washington's inability to control its debt for many years. Standard & Poor's lowered its credit rating for the US government in 2011.
Because the issues are so well known already, investors have likely already accounted for them, according to Brian Rehling, head of global fixed income strategy and other analysts at Wells Fargo Investment Institute. They're expecting 'limited additional market impact' following the initial reactions to the Moody's move.
Stocks and US government bond prices at first fell sharply early in Monday's trading, but they trimmed their losses as the day progressed. The S&P 500 went from a loss of 1.1 per cent to a modest gain of 0.2 per cent before drifting through the afternoon.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Sydney Morning Herald
2 hours ago
- Sydney Morning Herald
‘Most complex': Inside the 24 hours that brought Qatar's airspace to a close
Adding to the situation, some of Qatar's flight crews had exceeded their legal operating hours which restricted their movement, he wrote. That meant most of the fleet, including A380s carrying more than 450 passengers each 'were now out of position, some grounded at airports with curfews'. Other flights had to wait for clearance to re-enter restricted airspace. 'Every part of the operation had to adapt in real time – without precedent, and without pause.' Hamad International Airport in Qatar is a major hub for Qatar Airways, on the popular long-haul route that crosses from Asia into Europe via the Middle East. Flights in and out of Dubai International Airport, the world's busiest hub, were also temporarily suspended. After Qatari airspace reopened some five hours later, the diverted aircraft began returning to Doha. The number of passengers at the airport surged from 10,000 to more than 22,000 by 5.00am. More than 4600 customers were housed in about 3200 hotel rooms across Doha, 35,000 meals were distributed, as well as water, 'comfort kits, and reassurance were offered face to face, flight by flight'. On Tuesday, 390 flights operated, rising to 578 the next day, Meer said. Qatar runs nine daily flights from Australia's capital cities to Doha, four of them operated in partnership with Virgin Australia. It owns 23.4 per cent of the Australian carrier. Iran attacked the US in retaliation for a US aerial mission that aimed to destroy Iran's nuclear capabilities.
Sky News AU
12 hours ago
- Sky News AU
‘Protect our national interests': Albanese resists pressure to boost defence spending
ANU National Security College's Jennifer Parker says the Australian government must address defence spending to 'protect our national interests'. 'Australia could do that to be politically creative, and it might take some of the pressure off us,' Ms Parker told Sky News Australia. 'I think we've got to think about why do we need to increase defence spending, and it's not just because our allies are requesting it, it's actually because we don't have the capabilities that we need to protect our national interest. 'We must address defence spending to address our own national interest.'
Sky News AU
15 hours ago
- Sky News AU
NSW Labor picks former Liberal premier Dominic Perrottet for top government position
NSW Labor Treasurer Daniel Mookhey has recruited former Liberal Premier Dominic Perrottet to bolster the government's investment strategies. The Saturday Telegraph revealed Mr Perrottet, a former Treasurer and later Premier would serve as the newest member of the NSW Treasury Corporation board known as T-Corp. The call was made by NSW Treasurer Daniel Mookhey. Mr Perrottet served as the state's 46th Premier from 2021-23 following the resignation of former Premier Gladys Berejiklian. He is currently working in Washington DC for Australian multinational mining and metals corporation BHP as head of corporate and external affairs. TCorp is the financial services partner to the NSW public sector, providing investment management and financial management solutions and advice to the government. With $117bn of assets under its management, TCorp also serves as the NSW government's sovereign investment manager. TCorp further acts as the central borrowing authority for the state with a balance sheet of $198bn. Mr Perrottet is the only former politician on the board, with the majority of members coming from a banking, superannuation and auditing background. It is believed Mr Perrottet will sit on the board while continuing his role at BHP. Mr Mookhey met with the former premier during his trip to Washington DC four months ago, with Mr Perrottet writing on his LinkedIn at the time that the two spoke about matters that were 'critical to both the US and Australia.' 'Yesterday I had the privilege of hosting NSW Treasurer Daniel Mookhey at the BHP Washington DC office for an important and timely discussion about issues that are critical to both the US and Australia,' Mr Perrottet wrote. 'It was a great opportunity for us to bring together business and opinion leaders as well as policymakers at a dynamic time to discuss the trends shaping the US market, the importance of critical minerals in the energy agenda, and the global competition for capital investment. 'The event underscored the importance of international collaboration and strategic engagement in navigating economic challenges and opportunities. It was a valuable platform for exchanging ideas and building partnerships that will benefit both countries.' However, Mr Perrottet is not the only former NSW Liberal figure to take up a post with a Labor government, with ex treasurer and energy minister Matt Kean appointed as chair of the federal Climate Change Authority by Prime Minister Anthony Albanese last year. Mr Kean who passed legislation to cement NSW's net zero emissions reduction targets said the CCA was 'close' to handing down its recommendation to the federal government on the highly anticipated 2035 carbon reduction targets.
