ASX 200 Live Today - Thursday, 10th September

Welcome to our live ASX coverage for Thursday, September 10. 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.

Bond yields are sizzling

[8:58 am] If you're looking for a bullish chart, look no further than bond yields (of any duration). You've got the Australian 3-year breaking out of its six-month trading range to the highest since June 2011. While the US 2-year continues to steadily trend higher, closing at 4.43% overnight, the highest since July 2024. (Also, Australia focuses on the 3-year as its the RBA's chosen benchmark for its explicit yield target, while the US 2-year is the cleanest proxy for the expected path of the fed funds rate over the near-term).

The US 30-year reminded Bessent who the 'house' is, up 4 bps to 5.29%, still slightly below the 17 August high of 5.31% but still pressing uncomfortable levels. While the Aussie 30-year jumped 5 bps to 5.73% overnight, a record high since the bond's inception in 2016.

Key Australian bond yields (Source: TradingView)

Key US bond yields (Source: TradingView)

Traders price four hikes from the ECB and BOE as oil surges

[8:49 am] Swaps markets have ramped up European tightening bets as the Iran war lifts energy costs, though several analysts think the pricing has gone too far. The ECB's interest rate decision is tonight at 10:15 pm, where consensus expects a 25 bp hike to 2.65%.

• ECB pricing at about 90 basis points of increases by December 2027, the most in the current tightening cycle, implying three quarter-point hikes and a 60% chance of a fourth

• BOE seen raising by roughly the same amount, which would take Bank rate to its highest since February 2025

• Two-year German yields hit 3.08%, the highest since June 2024, as short-dated bond yields across the region jumped on Wednesday

• Energy import exposure is the driver, with Allspring's Lauren van Biljon noting oil back above US$100 and the UK and Europe still very much tied to energy prices, alongside a more resilient euro-zone economy

• Policymakers less committed than markets, with ECB Governing Council member Joachim Nagel signalling a hike at Thursday's meeting but staying wary on what follows, and BOE Governor Andrew Bailey downplaying the chance of an imminent move

• Bank of America recommends fading front-end ECB pricing citing limited evidence of broader inflationary pressure, while CG Asset Management's Emma Moriarty calls four UK hikes unlikely given the weak economy

Source: Bloomberg

Bessent's upsized buyback fails to stem Treasury yield rise

[8:44 am] The US Treasury tripled the size of its first enlarged long-dated buyback operation but bond yields kept climbing, with Bessent also daring currency traders to test him.

• Buyback capped at US$6bn of longer-dated debt, triple the US$2bn originally scheduled, landing at the top of the US$5bn to US$6bn range Wrightson ICAP had flagged as the likely starting point

• Ten-year yields rose 5 bps to 4.84, the highest since Nov-23, with the Treasury then selling US$39bn of 10-year notes at 4.834%, the highest yield at a 10-year auction since 2007

• Forward calendar unchanged with the six remaining long-dated operations this fiscal quarter still guided at US$4bn or more, offering no signal of further escalation

• Bessent said "I am the house now" on Tuesday in reference to Treasury's parallel yen support, which is aimed at deterring the Bank of Japan from selling from its US$1.1trn Treasury holdings, the largest foreign position

• Analyst reaction sceptical with Deutsche Bank's Steven Zeng saying Treasury has created a monster it must keep feeding, Evercore ISI reading the announcement as Bessent accepting a limited role for buybacks, and BMO's Ian Lyngen warning the activist approach risks the credibility of Treasuries as an asset class

• No obvious ceiling according to Neuberger Berman's Joseph Purtell, who sees scope for tens of billions, though others estimate a practical limit near US$10bn, against US debt above US$40trn and a deficit headed past US$2trn

Source: Bloomberg

Brent tops US$101 as US-Iran tanker strikes escalate

[8:41 am] Brent settled above US$101 a barrel for the first time since July after the US destroyed five Iranian tankers and Iran pledged to intensify attacks, with the EIA now flagging a tighter distillate market.

• Brent up 2.3% to US$101.74 a barrel, now up 18% since 25-Aug

• Eight Iranian tankers destroyed since Sunday including four in the Gulf of Oman and one near Kharg Island, though only one of the latest five was a very large crude carrier, limiting the near-term hit to Iranian export capacity

• Oil at sea down more than 150m barrels since mid-July on Vortexa data, with Chinese buying resuming this month after a hiatus that had capped prices, and TD Securities noting the market remains tight overall despite stabilising dark flows

• EIA lifted its Q4 retail diesel forecast 14% to US$5.55 a gallon and expects US distillate inventories below 100m barrels in September, staying under the five-year low through much of 2027 as global distillate output runs below last year

• EIA forecasts Brent averaging US$90/b in 2H26 before easing to US$74/b in 2027, assuming Middle East export constraints persist to year-end and regional crude output stays below pre-conflict averages until 2Q27

• Trump said relief will not come before the 3 November midterms, forecasting petrol below US$2 a gallon only afterwards with the national average currently above US$4.22, while European gas trades at its highest since 2023 heading into winter

Apple unveils foldable iPhone Duo at US$1,999

[8:40 am] Apple's first foldable handset headlined the September hardware event, with new CEO John Ternus making his debut and Pro pricing rising US$100.

• Duo priced from US$1,999 for 256GB and up to US$3,199 for 2TB, well below IDC's expectation of US$2,500 or more and in line with JPMorgan's US$1,999 call, with preorders from 16 October in more than 70 countries and availability 23 October

• iPhone 18 Pro up US$100 to US$1,199 and the Pro Max to US$1,299 amid the global memory shortage, following price rises on Macs, iPads, last year's iPhone Air and the 17e

• A20 Pro is the first high-volume smartphone chip on TSMC's 2nm node, with a 20% faster CPU, 40% faster GPU and 50% more memory bandwidth, and Apple has committed to producing some iPhone chips at TSMC's Arizona fabs

• C2 modem debuts in the Duo, Apple's second in-house design, running 50% faster at 15% lower energy, with analyst Ben Bajarin expecting Qualcomm content to be eliminated entirely from the iPhone 19 line

• No entry-level iPhone 18 launched, with that model shifting to a spring release alongside the 18e and iPhone Air 2, changing the seasonal revenue cadence

RBC sees growing risk of 10% pullback in US stocks

[8:32 am] RBC Capital Markets says the odds of a garden-variety correction have risen heading into a seasonally weak stretch and the US midterms.

• Pullback risk of 5% to 10% has grown, with strategist Lori Calvasina noting concerns over inflation and interest rates are overshadowing recent improvement in consumer confidence

• September seasonality is unhelpful, with the S&P 500 having fallen in the month in five of the past 10 years

• Midterm cycle and Iran war are flagged as additional volatility sources, with political backlash against AI emerging as a campaign issue

• Downside likely contained given post-GFC pullbacks have generally held within the 5% to 10% band absent serious recession or rate-shock concerns

• Target held at 8,150 for the S&P 500 over the next 12 months, implying about 6% upside from Tuesday's close

Source: Bloomberg

S&P 500 earnings growth lifts to 32% on AI build-out

[8:32 am] Full-year profit estimates for the S&P 500 have been revised sharply higher after a stronger-than-expected second-quarter reporting season.

• Earnings growth of 32% is now projected for the S&P 500 this year, up from the 24% gain expected before second-quarter reporting began

• Beat rate of 86% across the near-complete reporting season is the highest since 2021, with the largest beats among AI-linked names including Amazon and Alphabet

• Communication services saw the largest upward revision, with earnings now seen up 51% this year versus 26% at the start of the second quarter, helped by Alphabet ad revenue and AI monetisation

• Consumer discretionary estimates now imply 32% growth versus about 12% previously, with Target, Walmart, TJX, Ross Stores and Estée Lauder all beating on EPS and raising guidance

• Energy upgrades followed record Chevron earnings and a roughly US$3.7bn boost to Exxon from higher crude tied to the Iran war, while Baker Hughes lifted full-year guidance as industrial and energy technology orders doubled to a record US$7.1bn

• Cost headwinds building with Apple's sales outlook disappointing on rising memory prices and supply constraints, and Nvidia warning of narrowing margins on memory costs

Source: Bloomberg

Good morning!

[8:24 am] ASX 200 futures are down 88 pts (-0.99%). Here's what happened overnight:

• Wall Street fell for a third straight session as Brent crude broke through US$100 a barrel and the US 10-year Treasury yield pushed to its highest level since Oct-23, leaving energy and rates in charge of equities

  • S&P 500 (-0.48%), Equal-weight S&P 500 (-0.96%)

  • Nasdaq (-0.64%), Dow (-0.77%), Russell 2000 (-1.32%)

  • US 2-year yield up 3 bps to 4.43%, US 10-year up 5 bps to 4.84%, US 30-year up 4 bps to 5.29%

• The US escalated on two fronts, banning a broad swathe of Canadian imports from later this month while Trump conceded the Iran war and higher petrol prices will likely run past November's midterms

• Apple delivered the session's big corporate set piece, unveiling a US$1,999 foldable iPhone Duo in John Ternus's first outing as chief executive, with tonight's ECB expected hike and US producer prices the next catalyst