What happened
The ASX 200 gained 4 points (+0.05%) on Monday, breaking a four-day losing streak despite softness in heavyweights BHP, Rio Tinto, and NAB. Healthcare gained 1.3% while Tech and Materials fell. Brent crude rose 3.3% to US$107.79 a barrel, and the Australian 10-year bond yield eased 3 basis points to 5.35% following a sharp multi-session surge.
Why it matters here
UBS noted that inflation worries and elevated bond yields cap the outlook for Australian equities. High bond yields erode equity valuation multiples, particularly for growth and resource sectors, while elevated oil prices maintain upward pressure on broader consumer price figures, increasing the likelihood of prolonged restrictive monetary policy from central banks.
What to watch
Track Australian bond yield movements and upcoming domestic inflation prints closely ahead of the Reserve Bank of Australia's upcoming interest rate review on 29 September.
Source
marketindex.com.au