Trading in Australia will be dominated by local factors today, as analysts pore over this morning’s quarterly result from ANZ and await the RBA’s interest rate decision this afternoon. Gains in industrial commodities and shares overnight could see a positive but cautious start to the session.
ANZ reported a 4.6% lift in underlying profit, a welcome relief after Westpac’s flat result yesterday. The growth is good for ANZ and also the broader market, as it casts Westpac’s result as one hit by its competitors, rather than a broader industry slowdown. Overseas earnings played a key role in lifting ANZ over its peer, and may become more of a strategic focus for bank boards. Domestic earnings also grew significantly, with NZ the major negative.
Share and interest rate markets are now pricing a high probability of an RBA cut, meaning the most likely spur for a market move would be no change in rates. Curiously, the AUD is rising, possibly indicating the currency markets are oversold. Below the bank dominated headlines, materials and energy stocks look set for another market leading performance today.
For further comment from Michael McCarthy at CMC Markets please call 02 8221 2135.