Australian shares are expected to open lower following a modest decline in New York. The focus of investors is on the Federal Reserve’s policy statement, scheduled to be released on Thursday. While no rate change is expected, market participants are eager for any indications of what lies ahead for the November meeting.
ASX futures were down 0.1% to 7190, indicating a slightly negative start for the market. The local currency was 0.3% higher, and the Bloomberg dollar spot index was relatively unchanged.
In the US, Instacart surged more than 40% on its debut, ending the day up 12%. However, the Dow, S&P, and Nasdaq were all slightly lower. Among the notable stocks, BHP was down 0.7%, Rio and Atlassian were both up 0.2%, Tesla and Apple gained 0.5% and 0.6% respectively, while Amazon was down 1.7% and Meta (formerly known as Facebook) was up 0.8%.
In the bond market, the US five-year yield rose to the highest level since 2007, driven by higher-than-expected inflation data in Canada and rising oil prices. The yield on the US 10-year note also increased by 6 basis points to 4.36%. Canadian yields also surged, with the 10-year yield rising by 12 basis points to 3.86%.
The Institute of International Finance reported that global debt climbed by $10 trillion in the first half of 2023, reaching a record level of $307 trillion. This increase comes after a period of decline as a share of the world economy. The rise in debt has been driven by resurgent inflation.
Overall, investors are cautiously awaiting the Federal Reserve’s policy statement for any hints on future rate changes and economic outlook. The outcome of the statement could have an impact on global markets, including Australian shares.