ASX 200 Live Today - Friday, 4th September

Welcome to our live ASX coverage for Friday, September 4. 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.

Waller says August CPI will decide his vote

[8:48 am] Fed Governor Christopher Waller signalled he could back holding rates if inflation keeps improving, softening market expectations for a September hike.

• Waller tied his vote to the 11 September CPI print, saying he is willing to support holding the policy rate if there is continued progress toward 2%, but would consider a hike if inflation comes in hot

• He described policy as only slightly restraining the economy, adding that it may not take much acceleration in inflation to nudge him into supporting tighter policy

• Waller expecting reasonable consumer and producer price readings over the next month because higher energy costs have not spilled broadly into other prices

• Fed funds futures moved during his remarks, with the probability of a hike at the 15 to 16 September meeting dialled back to about 50%

• The committee remains split, with Michael Barr open to hiking this month if inflation fails to subside, John Williams seeing inflation continuing to ease as tariff effects fade, and three members having dissented for a quarter-point hike in July

Trillion-dollar dislocation sits beneath calm credit markets

[8:45 am] Bloomberg analysis finds a large pocket of high-grade bonds trading well wide of where their ratings suggest, even as headline spreads sit near multi-decade lows.

• About $1trn of non-financial high-grade bonds are trading at spreads unusually wide relative to their credit rating, split between roughly $580bn in the US and almost $400bn in Europe

• Headline spreads show none of it, with the US high-grade index averaging 0.78 percentage points and Europe 0.79 percentage points, both close to their lows, and 60-day volatility in global high-grade spreads around a five-year low

• Hyperscalers now make up about 5% of the US high-grade index, double their share of two years ago, forcing managers to rebalance to avoid concentration and distorting pricing in names well beyond the AI leaders

• Dislocations run across sectors, with carmakers marked down on Chinese competition, software names on AI disruption risk, and insurers on private credit exposure

• Ratings bands are breaking down, with bonds of 25 single-A rated US borrowers across five sectors indicated wider than the triple-B spread curve in late August, and more high-grade debt trading wider than junk equivalents this summer

Source: Bloomberg

US high-grade bond supply on track for record September

[8:47 am] Wall Street dealers are positioning for a potential record month of US investment-grade issuance as surging yields push companies to lock in funding early.

• September issuance forecasts sit at about $215bn on an informal Bloomberg dealer poll, against the $207.5bn record set for the month last year, with some predictions running to $250bn

• Average US high-grade yields are above 5.5%, the highest in more than two years, giving treasurers reason to pull 2027 funding needs forward into 2026

• Spreads remain tight at below 0.8 percentage points for much of the week, and the risk of waiting is that heavier supply later in the year weakens corporate debt relative to Treasuries

• Supply has set records in four of 2026's eight months including the past three, with volume tracking 7.6% above 2020's pandemic-fuelled annual record

• Bank of America is more cautious, forecasting about $190bn as big tech potentially sits out September after recent jumbo deals, which would still be the second-largest September on record

Source: Bloomberg

Good morning!

[8:35 am] ASX 200 futures are up 25 pts (+0.27%). Here's what happened overnight:

• Fed Governor Waller said he could back a September hold if August inflation cools, driving Treasury yields and hike odds sharply lower and lifting major US benchmarks

  • S&P 500 (+1.06%), Equal-weight S&P 500 (+0.66%), Nasdaq (+1.40%), Dow (+1.18%) and Russell 2000 (+0.51%)

• Nvidia bought Hugging Face for $12.93bn in its second-largest deal ever, while Snowflake's beat-and-raise quarter powered a broad software rally

• Energy remains the inflation problem as Iran struck US bases in Kuwait and the UAE, Brent held in the mid-$90s and US retail diesel reached a four-year high just below its all-time record