The ASX Today
The ASX is tipped to muscle up further, but its daily gains could be hinged on an economic drop later today.
The ASX is tipped to muscle up further, but its daily gains could be hinged on the drop of the RBA minutes later today.
SPI traders have added another seven points overnight after a strong session yesterday.
They didn't exactly rally, but US stocks did hit new records – recent gains there have been put down to Trumponomics and elsewhere central bank decisions. The S&P 500 finished 0.14 per cent higher, nudging a record, and the Dow closed 0.28 per cent higher at 22,331 points. The tech-tilted Nasdaq closed just six points higher at 6,454 points.
Given interest rate moves and central bank discussion overseas, our financials sector could fare better today, although traders will pay close attention to the RBA's minutes for direction.
- Aussie dollar down 0.5 per cent overnight to US79.61c, likely to move further on RBA minutes later today
- Q2 house price index data drop – forecasted 1.2 per cent growth against 2.2 per cent the month prior
- Weekly consumer confidence data published
- A mixed day ahead for resources
- Financial sector preparing for a strong session
- Gold moves lower on ‘no news being good news'
Commodity prices largely fell overnight, but basic materials ended higher on Wall Street. Currency exposure should win out here and the local materials sector is tipped to have a strong day. BHP was way higher in overseas trade and looks like it could easily gain 1 per cent this morning. And while iron ore's spot price declined, Dalian iron ore futures gained around 1.3 per cent.
Although, like many other traders, Greg McKenna, the chief market strategist at AxiTrader, is focusing more closely on our financials sector. There's been mixed moves in materials that don't seem enough to shift the spotlight from financials.
Recent economic data drops have suggested the Australian economy is heading in the direction the RBA outlined and this should be confirmed today. Minutes are likely to focus on discussion around balancing support for the labour market and risks to household debt, and we already know this month's special RBA topic is the Chinese economy.
“If rate rises get priced into interest rate markets it will also see a re-pricing of expectations about bank Net Interest Margins (NIM) which is usually positive for financials,” said McKenna.
“Today's RBA minutes might be very interesting – and not just for forex traders.”
McKenna has a near-term target of US78.5c for the Australian dollar, not only in light of the above, but also based on stocks rallying, metals retracing and traders selling off bonds.
Slow news flow overseas set the scene for a more relaxed state of affairs, which seemingly worked against gold overnight. The precious metal is now at $US1,310, having lost $14, with the next area for technical support at $US1,299.
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