Renewed investor optimism in the US overnight carried over to local markets today as the ASX200 index reached another all time high on Friday of more than 8,230 points.
Leading the gains on Friday afternoon are Consumer Discretionary stocks, followed by the Energy sector, while Health Care is the only sector trading in the red.
Also reaching a new all-time high today was Macquarie Group Ltd, which hit $233 per share near the market open. MQG has since slid back to below $232 per share in afternoon trade.
Myer is also making headlines as the the worst performing stock on the All Ords today. The retailer open dropped by more than 10% on the open, after reporting dissapointing sales results. Myer shares have since recovered much of their morning losses.
RBA meets next week
The Reserve Bank of Australia (RBA) is expected to hold its cash rate target at 4.35% following its board meeting on Monday and Tuesday next week, according to a Reuters poll of 45 economists. The announcement will be made at 2:30 pm (AEST) on Tuesday.
Inflation in Australia remains elevated, despite easing to 3.5% in July, which is still above the RBA’s target range of 2%-3%. This, along with a robust job market, has left little room for the RBA to cut rates. Economists agree that policymakers are likely to maintain the current rate for the remainder of the year.
The RBA’s stance contrasts with other central banks, such as the Reserve Bank of New Zealand, Bank of England, and the US Federal Reserve, which have begun easing monetary policy. Although the Bank of Japan today decided to keep interest rates on hold at 0.25%.
Robert Carnell, head of research for ING’s Asia-Pacific region, remarked, “The risk is slightly to the upside: the RBA never really tightened rates that much to bring the economy slow enough to get inflation under control.”
Among Australia’s major banks, ANZ, NAB, and Westpac forecast that rates will remain unchanged through the year. However, CBA expects one rate cut before the year’s end.
The RBA is anticipated to begin easing in 2024, with gradual rate cuts in the first three quarters, potentially lowering the cash rate to 3.60% by late 2025.
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