Australian shares are set to edge lower at the open. Shares in New York shook off morning weakness to turn positive late, despite concern about a potential US federal government shutdown.

While gains were modest on the final day of September on Wall Street, the benchmark S&P 500 and the tech-heavy Nasdaq and the Dow all gained for the second quarter in a row, Reuters reported. For the S&P 500 and the Dow, it also marked their fifth straight monthly gain while the Nasdaq registered its sixth straight monthly gain

Monica Guerra, head of US policy at Morgan Stanley Wealth Management, said historically shutdowns have had limited economic impact. “However, economic effects could be magnified this time since a full shutdown is more likely than a partial one, and federal job cuts could be higher than usual.”

In what could be among the last data points this week, the Labor Department’s Bureau of Labor Statistics said job openings, a measure of labour demand, rose 19,000 to 7.227 million by the last day of August, bolstering the case for a rate cut later this month.

BHP recovered from an early drop in London to finish 1.9 per cent lower after Bloomberg said China’s state-run iron ore buyer has told major steelmakers and traders to temporarily halt purchases of all new BHP Group cargoes. A Chinese steel mining news site disputed the report.

Market highlights

ASX 200 futures are pointing down 7 points or 0.1 per cent to 8866.
All US prices near 4.15pm New York time.

  • AUD +0.6% to US66.14¢
  • Bitcoin +0.02% to $US$114,389
  • On Wall St: Dow +0.2% S&P +0.4% Nasdaq +0.3%
  • VIX +0.06 to 16.18
  • Gold +0.6% to $US3855.04 an ounce
  • Brent oil -1.4% to $US67.02 a barrel
  • Iron ore +0.5% to $US103.55 a tonne
  • 10-year yield: US 4.15% Australia 4.29%

Today’s agenda

Other than NZ August building permits, Wednesday’s local calendar is light.

Overseas, the focus is on Washington and the potential federal government shutdown, which would shut the door temporarily on US data prints, and could lead to thousands of employees permanently losing their jobs.

Elsewhere, manufacturing PMI reports are scheduled in Japan, the UK, France, Germany, the EU and Canada.

As for post RBA meeting analysis, TD Securities said the bank’s statement hints at the potential for no further rate cuts this year.

“The Bank highlighted stronger than expected growth and inflation, a firm housing market and the risk of persistent price pressures. The messaging was more hawkish than last week’s RBA’s commentary to the House of Representatives Economics Committee.”

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