Originally published by Rivkin Securities
After opening lower, US stocks rallied throughout the day and the S&P 500 closed 0.4% higher. Materials was the strongest sector while Real Estate was the weakest. The ASX 200 has continued declining from its recent highs, falling 0.6% yesterday and giving back the gains made in early July.
Fed President Jerome Powell testified before the Senate Banking Committee on Tuesday and commented that the so called ‘trade wars’ could hurt economic growth and also potentially wages growth. Despite this, Powell said the Federal Reserve will continue to gradually raise rates. The market expects the next rate hike to occur at the September meeting of the Federal Reserve which will occur in approximately eight weeks. Another 25 basis point rate hike at that meeting would bring interest rates to a range of 2.0-2.25% which would be the highest level since 2008.
Last night UK employment data was released which saw the unemployment rate remain steady at 4.2% while average earnings grew by 2.5%, as expected. Later today UK CPI data is expected to show a year over year rise of 2.6%.
Yesterday, the minutes from the most recent RBA meeting were released. The RBA is increasingly considering the property market into its analysis and the gradual decline in the Sydney and Melbourne markets is probably a welcome sight for the board. The RBA has been concerned about the link between house price and household debt which have, until recently, been climbing in unison.
Data Releases:
- UK CPI 6:30pm AEST