Australian bond yields have decreased, following the trend of their US counterparts, in response to signals from Federal Reserve officials that the central bank is unlikely to raise interest rates further. The three-year Australian bond yields reached a four-week low of 3.88%, trading at 3.93%, while the 10-year yields dropped by 5 basis points to 4.46%. In the US, the benchmark 10-year yields experienced their most significant daily decline since July, settling at 4.66%, and two-year yields had their biggest daily drop since late August, at 4.97%.
The lower US Treasury yields are primarily attributed to reduced expectations of the Federal Reserve tightening monetary policy rather than being driven by safe-haven demand due to Middle-Eastern events, as stated by Ray Attrill, the head of FX strategy at NAB. Fed futures suggest a 30% probability of the Fed raising the policy rate by December.
Meanwhile, traders are assigning a 42% probability that the Reserve Bank of Australia will increase the cash rate to 4.35% by early next year.
The S&P/ASX 200 is currently 0.47 per cent higher at 7,073.70.
The SPI futures are pointing to a rise of 38 points.
Best and worst performers
The best-performing sector is Materials, up 1.21 per cent. The worst-performing sector is Consumer Staples, down 0.43 per cent.
The best-performing large cap is Pilbara Minerals (ASX:PLS), trading 3.91 per cent higher at $4.115. It is followed by shares in Lynas Rare Earths (ASX:LYC) and Mineral Resources (ASX:MIN).
The worst-performing large cap is TPG Telecom (ASX:TPG), trading 1.8 per cent lower at $5.185. It is followed by shares in Pro Medicus (ASX:PME) and Boral (ASX:BLD).
Talon Energy (ASX:TPD) and TMK Energy have agreed to consolidate ownership of the Gurvantes XXXV Project. In response, Talon’s Managing Director, Colby Hauser, commented: “This consolidation is a logical transaction and compelling opportunity to create value for both sets of shareholders by unlocking important synergies in the exploration and development of the Gurvantes Project.” Shares are trading 2.17 per cent lower at 22.5 cents.
Besra Gold (ASX:BEZ) announced that it has received US$10,000,000 from Quantum Metal Recovery. In response, Besra’s Executive Chair, Dato’ Lim Khong Soon, said “Coming on the second anniversary of Besra’s listing, the transfer of the first US$10,000,000 underscores the progress Besra has made since listing and sets the Company up well for its move back into commercial production, unlocking the undoubted potential of our exciting Bau project.” Shares are trading 22.2 per cent higher at 16.5 cents.
King River Resources (ASX:KRR) announced the completion of its 2023 Geophysics program in the Tennant Creek Region and the allocation of a $2M drilling budget to test resulting targets, commencing 10 November 2023. KRR will generate more drill targets as the processing and interpretation of the 2023 geophysical results continues for the remaining project areas and the market will be updated on these progressively. Shares are trading 20 per cent higher at 1.8 cents.
Commodities and the dollar
Gold is trading at US$1874.60 an ounce.
Iron ore is 2.0 per cent lower at US$114.05 a tonne.
Iron ore futures are pointing to a 0.54 per cent rise.
One Australian dollar is buying 64.40 US cents.