Pre-Open Data
Key Data for the Week
- Thursday – AUS – Trade Balance – The trade surplus dropped to $8.36 billion from $9.76 billion in the prior month.
- Thursday – UK – BoE Rate Decision – The BoE hiked rates 0.25% to 0.50%.
- Friday – AUS – RBA Statement on Monetary Policy
- Friday – US – Unemployment rate
Australian Market
The Australian sharemarket closed 0.1% lower yesterday, as Meta, also known as Facebook, reported poor earnings and guidance, which resulted in negative sentiment across sharemarkets.
This dragged the Information Technology sector 5.9% lower, as the sector was the worst performer on the ASX. Afterpay’s owner, Block, plummeted 9.8%, while Zip and Appen conceded 9.6% and 6.8% respectively. Accounting software provider, Xero, lost 5.0% to continue its recent run of weakness, while WiseTech Global shed 8.0%.
The Financials sector lost 0.1% during the day’s trade, as major banks were mixed. Westpac was the best performer, as it gained 2.3% after posting a significant increase in net profit and reduced costs. ANZ and NAB added 0.7% and 0.1% respectively, while Commonwealth Bank dropped 1.4%.
The major miners were not affected by the broader market sell-off, as the sector posted a 1.5% gain. Fortescue Metals was the best of the major miners, up 3.3%, while BHP and Rio Tinto added 3.1% and 2.4% respectively.
The Australian futures market points to a 1.13% fall today, driven by weaker overseas markets.
Overseas Markets
European sharemarkets ended lower overnight, as the Information Technology and Travel and Leisure sectors dragged on the indices, while the Financials sector outperformed. Semiconductor producers ASML and Infineon Technologies conceded 5.9% and 5.5% respectively, while wind turbine producer Vestas Wind Systems dropped 3.1%.
By the close of trade, the STOXX Europe 600 posted a 1.0% fall, while the UK’s FTSE 100 lost 0.6% and the German DAX declined 1.6%.
US sharemarkets closed sharply lower on Thursday, as poor earnings reports lowered the indices. Meta and Spotify both reported quarterly reports and closed the session down 26.4% and 16.8% respectively. As a result, the Information Technology sector led a broad sell-off, as Amazon shed 7.8%, PayPal dropped 6.2% and Netflix conceded 5.6%.
By the close of trade, the NASDAQ fell 3.7% and the S&P 500 lost 2.4%, while the Dow Jones closed 1.5% lower.
CNIS Perspective
West Texas Intermediate (WTI) crude futures, the US oil benchmark, gained more than 2% overnight to trade as high as US$90.23 per barrel. The last time prices were above the US$90 mark was October 2014. International benchmark Brent crude rose 1.7% to trade at US$91.
Oil has had a blistering rally since falling to record lows in April 2020. WTI is up nearly 20% for the calendar year, building on 2021′s gain of more than 50%.
On Wednesday, OPEC decided to stick to a previously announced schedule and increase March production by 400,000 barrels per day. The move comes amid mounting pressure, particularly from the US, to boost output in an effort to alleviate the rapid appreciation in prices.
The latest strength in oil prices will mean higher prices at the bowsers for consumers and higher transportation costs for all kinds of consumer goods, which will place further pressure on the already high rates of inflation being witnessed globally.
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