ASX to slip, Fed decision and Powell's comments awaited
Meta and Microsoft are set to report results after Wall Street's closing bell at 6am AEST.
US government bond yields were higher after the Treasury Department signalled it will rely more on the shortest-dated securities to fund the gaping federal deficit at least until 2026.
The S&P 500, coming off its best streak of gains since 2020, is about to enter what has historically been its toughest stretch of the year.
Over the past three decades, the benchmark has performed the worst in August and September, losing 0.7 per cent on average in each month, compared with a 1.1 per cent gain on average across other months, data compiled by Bloomberg show.
The US economy expanded an annualised 3 per cent pace in the June quarter, however economists were wary of reading too much into the print.
'We retain our outlook for a slowdown in US GDP growth in 2024, as restrictive trade and immigration policies outweigh the benefits from fiscal policy and deregulation,' Morgan Stanley's Michael Gapen wrote in a note.
'Prior to this report, we were forecasting Q4/Q4 growth of 0.8 per cent in 2025; we now expect 1.0 per cent, reflecting the stronger 2Q out turn but no extrapolation into later quarters. We continue to expect 1.1 per cent growth in 2026.'
Market highlights
ASX futures are pointing down 7 points or 0.1 per cent to 8708.
All US prices near 2.30pm New York time.
*Bloomberg pricing
Today's agenda
Quarterly reports expected on Thursday from Beach Energy, Liontown Resources and Origin Energy.
RBA deputy governor Andrew Hauser will participate in a fireside chat at the Barrenjoey Economic Forum, Sydney at 9.20am AEST.
A wave of data is set for release at 11.30am AEST, including June retail sales, building approvals, private sector as well as import and export price data. NAB said its retail transactions data suggests a strong rise in the month and 'we have pencilled in a 1.0 per cent month-over-month increase'.
As for overseas, Japan will release June retail sales and industrial output, China will release manufacturing and non-manufacturing PMIs for July and the Bank of Japan will hold a policy meeting. Later, the US will release June personal spending and core PCE price data, a quarterly employment cost index and weekly jobless claims.
On the BoJ decision, TD Securities said: ' US-Japan trade deal was struck, but we expect the BoJ to stand pat this month, holding the target rate at 0.5 per cent.
'After the poor showing of the ruling coalition in the Upper House elections, PM Ishiba is facing calls to step down and Japan is likely to enter a phase of political uncertainty. That said, Governor Ueda may signal a hike in October is still on the table as inflation is running at a 30-year high and we will get more clarity on both trade and politics then.'
Top stories
Rio Tinto boss defends lithium push as earnings slump cuts dividend | The country's biggest iron ore exporter will pay its lowest dividend since 2018 after lower prices and weaker sales volumes hurt its half-year bottom line.
| India 'is our friend', the US president said on his Truth Social platform, but its tariffs 'are far too high' on US products.
Atlassian gang back together as Farquhar hits Canberra to spruik AI | The billionaire co-founders of the software giant reunited at the National Press Club, setting aside long speculation of a rift in their relationship.
| A broader push for higher taxes at the productivity roundtable in August could soften hostility towards the proposed super tax, the government believes.
| Commonwealth Bank held the rights to sponsor Cricket Australia for four decades – then Westpac CEO Anthony Miller stole it from under their nose.
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