Pre-Open Data
Key Data for the Week
- Tuesday – AUS – RBA Cash Rate Decision – The cash rate was left unchanged at 0.10%.
- Tuesday – US – Trade Balance was little changed at a US$89.2 billion deficit.
- Wednesday – US – FOMC Meeting Minutes
Australian Market
The Australian sharemarket rose 0.2%, despite rising as much as 0.8% during the trading day. The market weakened from its intra-day high, as the Reserve Bank kept rates on hold, and stated an increase in inflation is to be expected.
The Information Technology sector was the best performer on the market, following a solid lead from the US, after it was announced Elon Musk had bought a nine percent stake in Twitter. Afterpay’s parent company, Block, jumped 6.2%, while accounting software provider, Xero, added 4.5%.
The price of oil continued to strengthen to approximately US$109, as more sanctions are set to be imposed on Russia. As a result, Woodside Petroleum lifted 2.8% and Santos rose 2.3%, while Beach Energy closed the session 1.6% higher.
There were minor losses in the Materials sector, as it lost 0.8%. BHP dropped 1.0% and Rio Tinto shed 0.4%, while Fortescue Metals bucked the downward trend to close up 0.1%. Mineral Resources outperformed, up 5.7%, as the company announced it would increase lithium production to meet unprecedented demand.
The Australian futures market points to a 0.64% decline today, driven by weaker overseas markets.
Overseas Markets
European sharemarkets closed mostly lower overnight, as the situation between Russia and Ukraine remains at the forefront of news headlines. The Financials sector underperformed; Barclays and Deutsche Bank both lost 0.3%, while Santander and BNP Paribas conceded 1.6% and 4.6% respectively.
Renewable energy providers enjoyed gains, as Vestas Wind Systems and Siemens Gamesa Renewable Energy jumped 8.6% and 6.8% respectively. Orsted, the world’s largest developer of offshore wind power, rose 3.8% after the company announced it will explore a joint development of floating offshore wind projects in Spain.
By the close of trade, the UK’s FTSE 100 added 0.7% and the STOXX Europe 600 closed up 0.2%, while the German DAX lost 0.7%.
US sharemarkets also lost ground on Tuesday, as the Information Technology sector weighed on the indices. NVIDIA Corporation was the main laggard, down 5.2%, while Netflix and Amazon dropped 2.9% and 2.6% respectively. Twitter continued to strengthen following news of Elon Musk’s stake in the business, to be up 26.3% over the past week.
By the close of trade, the Dow Jones closed down 0.8%, while the NASDAQ dropped 2.3% and the S&P 500 lost 1.3%.
CNIS Perspective
You didn't need to be glued to the screens yesterday waiting for the RBA's interest rate decision and their commentary on the outlook for Australia’s official cash rate.
The foreign exchange market graphically illustrated the RBA's interest rate intentions, which saw an immediate sharp rise in the AUD/USD exchange rate to over US$0.76.
Prior to the meeting, it was thought the already lofty US$0.75 exchange rate would temper the RBA.
Instead, their comments suggest interest rate rises will resume in June, for the first time in 12 years.
Should you wish to discuss this or any other investment related matter, please contact your Wealth Management Team on (02) 4928 8500.
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