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FIVE at FIVE AU: positive momentum puts ASX on track to end week higher

Published 07/06/2024, 01:21 pm
Updated 07/06/2024, 02:30 pm
© Reuters FIVE at FIVE AU: positive momentum puts ASX on track to end week higher
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The ASX200 is trading 0.24% higher this afternoon ahead of the long weekend, with the benchmark index on track to end the week 1.7% higher.

The Consumer Discretionary and Materials sectors are leading the market higher, while Tech stocks and Healthcare are in the red.

Resources heavyweights BHP (ASX:BHP) and Rio Tinto (ASX:RIO) are having a strong session, up 1% and 0.8% respectively in afternoon trade.

Gold miners were particularly strong on Friday with Newmont Corp up 3.4% and Evolution mining trading 1.7% higher. This follows the release of the World Gold Council’s May Gold Market and Gold ETF (NYSE:GLD) reports. The reports showed that gold rose for the third consecutive month, while global gold ETFs saw inflows in May, ending their twelve-month losing streak.

Read more: Elevated gold price presents opportunity for ASX gold junior

UBS has revised down its headline CPI forecast for 2024 but increased its forecast for 2025. This follows bigger than expected subsidies in the recent state and federal budgets, a lower-than-expected minimum and award wage increase, and a higher than expected monthly CPI indicator. The bank expects the RBA to start cutting rates in February amid cuts by global central banks, although it anticipates a "stickier" outlook for inflation in Australia.

The markets are not fully pricing in a first rate cut by the RBA until mid-2025, but UBS expects it to start cutting in February, lowering the cash rate from 4.35% to 3.35% by the end of 2025.

Meanwhile,at the Australian Economic Outlook today PM Anthony Albanese has said the government is getting inflation down "not in spite of the help we are providing with the cost of living, but because of it".

Albanese said that rather than mimicking other nations in their fight against inflation, Australia must do it "our way" and "play to our strengths". This includes not going “dollar for dollar” with the US Inflation Reduction Act.

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