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ASX 200 to extend declines on Powell rate warning

EditorOliver Gray
Published 17/04/2024, 08:10 am
© Reuters.

Investing.com - The Australian Stock Exchange is predicted to take a hit as Jerome Powell, the chairman of the US Federal Reserve, confirmed that the anticipated cuts to US interest rates would be postponed due to the persistently high inflation rates in the country.

The S&P 500 remained steady around 5050, while Treasury 10-year yields ascended to 4.66%. The US dollar experienced gains against all other developed-market currencies.

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In the local scene, attention will shift towards New Zealand's inflation data, followed by the UK's inflation data released as the market closes. The mining sector, particularly BHP's (ASX:BHP) third-quarter production report, will also be under scrutiny.

Investors will be keenly observing Lynas Rare Earths Ltd (ASX:LYC) as the market opens today. This comes after Gina Rinehart, Australia's wealthiest individual, acquired a significant share in the company, a fact disclosed after yesterday's trading session.

Hancock Prospecting, owned by Mrs. Rinehart, increased its stake in Lynas, the largest producer of rare earths outside of China, to 5.82% on Tuesday. This move has sparked speculation that Rinehart could potentially play a pivotal role in any large-scale merger between Lynas and the New York-listed MP Materials.

In other news, Bank Of Queensland Ltd. (ASX:BOQ) is set to announce its earnings, while Rio Tinto Ltd (ASX:RIO) and Evolution Mining Ltd (ASX:EVN) are expected to release updates on their production.

The Australian dollar depreciated by 0.6% to 64.05 US cents, and Bitcoin was down by 0.5% to $US62,791. On Wall Street, BHP Group Ltd ADR (NYSE:BHP) shares dipped by 3.5%, while Rio Tinto ADR (NYSE:RIO) fell by 1.7%.

In the commodities sector, spot gold was up by 0.2% to $US2388.66/oz at 4.17pm in New York, Brent crude fell by 0.2% to $US89.92 a barrel, and iron ore decreased by 2.1% to $US109.90 a tonne. The 10-year yield in Australia was at 4.33%, and in Germany, it was 2.48%.

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