The Australian stock market is likely to start its day relatively flat, as investors cautiously await the next rise in Reserve Bank interest rates.
ASX futures remained stable at 6,539 points at 9:10 am EAST.
Virtually every bank and economist predicts the RBA will raise rates this afternoon as it desperately tries to ease cost-of-living pressures in Australia.
The country’s overall inflation rate rose to 5.1% in the March quarter (its highest level in 21 years) and is expected to rise to 7% in December.
According to market prices, the most likely outcome today is a double-rate rise of 0.5 percentage points, which would bring the RBA’s cash rate target to 1.35 percent.
The Australian dollar was buying 68.7 US cents, after rising 0.7% overnight. However, the local currency is still trading near its two-year low.
“The RBA is expected to increase the cash rate by 50 basis points (0.5 percentage points), which is almost entirely set by the markets,” Commonwealth Bank foreign exchange strategist Carol Kong said.
“As a result, the Australian dollar could rise modestly if the RBA raises the cash rate by 50 basis points as we expect.”
Cash gold was trading at $ 1,809.12 an ounce. It was a significant improvement over last week, when the precious metal hit a six-month low ($ 1,784).
“Extremely convincing rise”
Abroad, Wall Street was closed for public holidays Monday (local time).
A jump in oil prices led to an increase in European energy stocks. This increased the British Stoxx 600 and FTSE indices by 0.5 and 0.9 per cent, respectively.
Brent crude oil futures rose 2% to $ 113.83 a barrel.
“Some markets are starting to find their starting point, but right now there’s a lot of volatility,” said Sebastien Galy, senior macro strategist at Nordea Asset Management.
However, asset manager Nuveen sees room for optimism after the sharp falls in the market in the first half.
“Downtrodden public markets offer extremely compelling upside potential in the short term,” the company’s Global Investment Committee wrote in its forecasts for mid-2022.
ABC / Reuters
Posted 1 h ago 1 hrs Mon July 4, 2022 at 21:51, updated 12 m ago 12 minutes ago Mon. July 4, 2022 at 11:15 p.m.