ASX 200 Live Today - Friday, 11th September
The S&P/ASX 200 is set to fall further as Brent surged overnight to US$109 a barrel and US Treasury yields traded even more vertical.
Today’s ASX 200 Updates
Welcome to our live ASX coverage for Friday, September 11. Expect a high volume of posts pre-market and more periodic updates throughout the day. We'll be wrapping the blog up around 2:00 pm AEST. Let us know how we can make it even better.
Copper smashed as White House tariff plan stalls
[9:11 am] Reuters reported the administration has yet to decide on refined copper tariffs, with affordability concerns weighing against the case for supporting domestic supply.
The proposal put to Trump was for a 15% tariff from 1 January 2027 rising to 30% in 2028, with Commerce Secretary Howard Lutnick's recommendation delivered by a 30 June deadline and not disclosed.
Record copper prices had been driven by buyers stockpiling ahead of the expected duties, building one of the world's largest inventories in the US and keeping metal from flowing to international markets.
The US imports roughly half its copper needs and has just two operating smelters, owned by Freeport and Rio, with refined imports up 16-fold since 2015 as production fell 20%.
S&P Global expects AI and defence demand to lift global copper consumption 50% by 2040.
Source: Reuters
Fed rate probabilities decisively shift to hikes
[9:04 am] After the elevated PPI print, surging oil prices and vertical move for bond yields, Fed target rate probabilities are now 71.3% for a 25 bp hike (vs. 49.4% a week ago).
Source: CME Fedwatch Tool
Year-end probabilities now favour two rate hikes, at 48.1% vs. 32.5% a week ago.
Source: CME Fedwatch Tool
US wholesale prices lift Fed hike odds
[9:02 am] August producer prices matched expectations but the energy-driven detail pushed markets closer to pricing a Fed hike next week.
Headline PPI rose 0.4% in August, in line with ests, taking the annual rate to 5.4% from 4.8% in July.
Core PPI rose 0.2% versus ests of 0.3%, while core excluding trade services rose 0.3%, in line with ests.
Energy prices jumped 4.2% after two months of declines, with diesel up 24.1% to record highs and accounting for more than a third of the 1.1% rise in producer goods prices.
Rate pricing moved to about a 70% chance of a 25 basis point hike at the 15 to 16 September meeting, up from 62% before the release, with the benchmark currently at 3.50% to 3.75%.
ECB hikes again as the oil shock feeds through
[8:56 am] The ECB lifted rates for the second time since the Iran war began, and hawkish projections have traders pricing in three more increases.
The deposit rate rose a quarter point to 2.50%, with the main refinancing rate to 2.65% and the marginal lending facility to 2.90%, all effective 16 September.
Traders are now fully pricing three further increases by October 2027, putting the ECB ahead of the Fed and Bank of England, both of which have yet to respond to the war and may hold again next week.
Fresh projections have headline inflation averaging 3.0% this year before easing to 2.5% in 2027 and 2.1% in 2028, with the 2026 growth forecast upgraded to 0.9% after a 0.6% expansion in the June quarter.
Euro zone inflation ran at 3.3% year on year in August with oil above US$105 a barrel and European gas costs back at levels last seen after Russia's invasion of Ukraine, though underlying inflation, services prices and wage pressures all eased.
Christine Lagarde called the hike "a no brainer", said it was unanimous and robust against all three of the ECB's scenarios, and flagged that higher energy costs will feed gradually into core and food inflation, keeping headline above target into the first half of 2027.
Lagarde also said the Council did not discuss the future path, that she has been surprised by the economy's resilience with post-cutoff data pointing to even stronger 2026 growth, and that the ECB is watching the long end of the bond market closely, describing AI-related financing needs as a key driver of the move in yields.
Source: Bloomberg
Trump promises a $5,000 dividend if Republicans hold Congress
[8:55 am] The pledge, made at the Republican midterm convention in Dallas, carries a price tag above $1tn at a time when US borrowing costs are already climbing.
The payment would go to every adult citizen if Republicans win both the House and Senate, with roughly 245.3m US adult citizens putting the total cost above US$1.2tn, more than was distributed under Covid-era stimulus.
Fiscal backdrop is stretched, with US debt passing US$40tn last month, the deficit nearing US$1.8tn in the fiscal year to date at around 5.8% of GDP, and debt at 122.6% of GDP in the first quarter.
Interest costs have already reached nearly US$1.3tn in the fiscal year to date, roughly comparable to the size of the proposed payout and just below the almost US$1.4tn committed to defence spending in 2026.
Tariff revenue does not cover it, with the Penn Wharton Budget Model estimating about US$300bn collected between January 2025 and July 2026 and more than US$100bn refunded since February after the Supreme Court struck down a swath of the duties.
Legislative path is unresolved, requiring congressional approval, with Senator Bernie Moreno saying he would prepare a bill after the election and Freedom Caucus member Chip Roy questioning how it would be funded.
Vice President JD Vance narrowed the proposal to the middle class and pointed to tariff revenue as the funding source, though Trump's claim of US$21tn in US investment sits nearly US$10tn above the figure on the White House's own website.
Oil surges past US$107 as the Iran war opens a second front in the Red Sea
[8:54 am] Brent posted its biggest one-day gain in months as Houthi forces seized Yemen's port of Mocha, Saudi output collapsed to a 36-year low and the conflict spilled into rates, fuel prices and US politics.
Brent is up more than 75% this year but remains below the April wartime peak of US$126, with Dated Brent, the physical benchmark, priced at US$120 on Thursday as fresh Asian buying tightens supply.
Saudi crude production fell 1.9m barrels a day to 6.238m barrels a day in August, the lowest since 1990, with tanker tracking showing exports down about a third to roughly 3m barrels a day and supply to market of 7.122m barrels a day pointing to an inventory drawdown.
OPEC cut its 2026 demand growth forecast to 380,000 barrels a day, the fifth consecutive downward revision, while group output fell 640,000 barrels a day in August as Saudi exports were disrupted and a US blockade cut Iranian shipments.
The Houthis took Mocha on Thursday and are advancing south toward Dhubab, putting them in reach of Bab al-Mandeb, which at 29km is narrower than the 34km Strait of Hormuz. Defence analyst Wolfgang Pusztai said the group could control the waterway with artillery alone, without needing missiles or drones.
US refined product markets are tightening fast, with diesel futures above US$5 a gallon for the first time since April 2022, retail diesel nearing US$6 a gallon and European gasoil approaching US$200 a barrel. The EIA projects US diesel inventories will fall this month to the lowest in more than two decades.
Positioning is stretched, with Kpler data showing trend-following CTAs flipped to 100% maximum long in Brent on Thursday and 91% long in WTI, suggesting buying capacity has largely been exhausted.
Trump said oil prices will not fall until after the November midterms and that the war will end "immediately after the election", a rare acknowledgement that neither the conflict nor the price pressure is likely to ease near term. GasBuddy's Patrick De Haan said he sees no guarantee of that outcome.
Warren Patterson of ING said rising prices are a concern heading into the midterms and that a further significant leg higher would require the recent escalation to translate into renewed disruption of flows through Hormuz.
Source: Bloomberg
BNP calls the end of the credit bull market
[8:47 am] BNP Paribas has reversed a three-year constructive call on corporate credit, arguing AI-related borrowing is about to overwhelm investor demand.
Hyperscaler issuance of roughly $400bn is expected from Amazon, Alphabet, Microsoft and peers next year, on top of the billions already raised in 2026.
Net fixed income supply is forecast to reach a record $3.7tn next year, with credit becoming oversupplied at the same time as government bonds.
Spread forecasts have euro investment-grade six basis points wider and dollar investment-grade seven basis points wider by the end of 2026, driven by steep valuations, tighter monetary policy and rising debt loads.
Viktor Hjort, BNP's global head of credit strategy, wrote that "AI is driving credit markets from bond scarcity to bond abundance", with no clear demand driver over the next few quarters able to keep pace with supply.
JPMorgan flagged last month that the scale of the bond sales is testing investor tolerance, with the bank's head of European investment-grade finance framing placement as a question of price rather than capacity.
Source: Bloomberg
Bond yields trade even more vertical
[8:42 am] Things are starting to spiral out of control, though all things considered, US markets traded relatively calm (VIX up 8% to 17.8, but still well-below panic levels).
US bond yield charts (Source: TradingView)
As Coolabah's Christopher Joye puts it:
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Source: X
Treasury selloff accelerates on oil and buyback disappointment
[8:48 am] US yields surged across the curve on Thursday as a four-month high in oil and an underwhelming Treasury buyback compounded a selloff that has been building for six months.
Two-year yields rose 15 basis points to 4.58%, the biggest one-day move since the April 2025 tariff meltdown, with traders now wagering the Fed could start raising rates as soon as next week.
Ten-year yields climbed 11 basis points to the cusp of their late 2023 peak, while 30-year yields rose 7 basis points to 5.36%, a fresh 19-year high.
Treasury bought $5.19bn of 10 to 20 year debt in its first expanded buyback, below the $6bn maximum announced and despite receiving $10.5bn of offers, with government bonds cheapening versus swaps most at the 20-year tenor.
Brent crude rose above US$107 a barrel on attacks around the Strait of Hormuz and no sign of US and Iran de-escalation, with a wholesale prices gauge also showing building inflation pressure.
George Catrambone of DWS Americas said Treasury Secretary Scott Bessent is "bringing a squirt gun to a firefight" and that the operation is not enough to compress the premium investors demand on 30-year debt given debt, deficit and inflation concerns.
Bessent said on Thursday that Treasury only buys bonds back cheap and that holders appear reluctant to part with long-dated paper, with TD Securities noting Treasury may need to accept less competitive bids if it wants to fill future operations in full.
Source: Bloomberg
Good morning!
[8:30 am] ASX 200 futures are down 78 pts (-0.89%). Here's what happened overnight:
A fourth straight down day on Wall Street, as Brent surged 7.6% to US$109 a barrel, US Treasury yields shot up 7-15 bps across the curve to fresh multi-year highs and next week's Fed decision now overwhelmingly favours a hike
S&P 500 (-0.58%), Nasdaq (-0.65%), Dow (-0.61%), Russell 2000 (-1.04%)
US 2-year up 15 bps to 4.58%, highest since Jul-24
US 10-year up 11 bps to 4.96%, highest since Oct-23
US 30-year up 7 bps to 5.36%, highest since Jun-07
Crude was the main catalyst after Houthi forces seized Yemen's port of Mocha and attacks from Yemen widened to Saudi energy infrastructure
Carnage across commodity markets, with platinum, silver, palladium and zinc down more than 5%, copper tumbled 4.8% after the US copper tariff plans stalled amid affordability concerns
