Australian shares are poised to open lower. The yield on the US 10-year note rose 8 basis points to 5.2 per cent during New York’s trading day. Oil topped $US107 a barrel amid conflicting headlines about US and Iran talks and more Houthi attacks on Saudi targets.
“Higher Treasury yields are a logical consequence of resilient growth, but the latest moves look overdone,” Pantheon Macroeconomics’ Samuel Tombs said in a note. “The surge in yields clearly is linked partly to the jump in energy prices due to the Iran War, and some less-than-encouraging trends in core inflation, which are difficult to pin on the energy shock alone.”
ASX 200 futures were down 29 points or 0.3 per cent to 8709. In New York, the S&P 500 slipped 0.02 per cent. Utilities and industrials paced seven of the 11 industry sectors lower.
3Fourteen Research’s Warren Pies said the firm was upgrading bonds from “underweight” to “benchmark” within its strategic recommendations. “If we are right, then [bond] yields should at least start calming down and allow equities to focus back on fundamentals.”
“We continue to believe that tech must lead the next leg of the bull market. GPU availability and rental rates remain firm. Our ‘line in the sand’ on this trade is semis.”