After setting new record highs yesterday, the local market looks set to fall this morning with the ASX SPI 200 Futures trading down 27 points at 8,392 points.
Yesterday’s strong jobs data from the ABS appear to have dashed hopes of a rate cut before Christmas.
Treasurer Jim Chalmers wouldn’t speculate on whether the job figures would result in a rate cut this year, saying it is “a matter for the independent Reserve Bank”.
But he did say “our job, and the Reserve Bank’s job, is to get on top of inflation without ignoring the risks to growth”.
Chalmers was also keen to note that this is the only time one million jobs have been created in a single parliamentary term.
On the topic of inflation, ANZ expects Australia’s third quarter CPI data to show headline inflation slowing to 0.3% on-quarter and trimmed mean inflation at 0.8% for a second consecutive quarter. This would see annual headline inflation drop to 2.9% on-year — inside the RBA’s 2-3% target band.
However, much of that decline is from a drop in electricity prices, which reflect federal and state rebates.
As such, ANZ commented: “We do not think the forecast decline in trimmed mean inflation will be enough to convince the RBA it should begin the easing cycle this year, particularly as there does not appear to be an urgent need to support the labour market, given its resilience over recent months.”
Overseas markets
US sharemarkets were mixed overnight. The Dow Jones rose by 161 points or 0.4% to a record close. But the S&P 500 dipped 0.02% and the Nasdaq added 6.5 points or 0.04%.
Chip stocks surged on Taiwan Semiconductor Manufacturing Company's (TSMC) upbeat forecast and stronger-than-expected monthly retail sales indicated a robust US consumer.
TSMC, the world's largest contract chipmaker, beat market estimates for profit and forecast a jump in fourth quarter revenue, driven by demand for artificial intelligence chips. The chipmaker's US-listed shares soared 9.8%, while AI-trade favourite and TSMC customer Nvidia gained 0.9%, touching a record high.
The Dow Jones index was lifted by a 9% rise in insurer Travelers (NYSE:TRV) Companies, after its third quarter profit beat market expectations.
Declines in healthcare stocks, however, limited gains as insurer Elevance Health dropped 10.6% after slashing its full-year profit forecast. Unitedhealth Group fell 0.9%.
European sharemarkets rose after the European Central Bank (ECB) delivered a widely expected 25 basis point rate cut, even though it refrained from offering new clues about its next move.
Germany's benchmark share index closed at an alltime high. Defence stocks led sectoral gains with a 2.6% jump, while cyclicals such as financial services, banks and industrial goods were among the top performers, each lifting about 1%.
- The continent-wide FTSEurofirst 300 index gained 0.9%.
- In London, the UK FTSE 100 index added 0.7%.
China’s latest economic activity data including 3Q GDP are due for release at 1pm AEDT Friday and house price data are due at 1230pm AEDT.
Currencies
Currencies were mixed against the US dollar in European and US trade.
- The Euro fell from US$1.0867 to US$1.0812 and was near US$1.0830 at the US close.
- The Aussie dollar rose from 66.72 US cents to 67.07 US cents and was near 66.95 US cents at the US close.
- The Japanese yen dipped from 149.44 yen per US dollar to JPY150.32 and was near JPY150.20 at the US close.
Commodities
Global oil prices inched up on Thursday after US crude inventories fell by 2.2 million barrels to 420.6 million barrels last week, compared with analysts' expectations for a 1.8 million barrel rise.
- The Brent crude price rose by 23 US cents or 0.3% to US$74.45 a barrel.
- The US Nymex crude price added 28 US cents or 0.4% to US$70.67 a barrel.
Base metal prices dipped on Thursday.
- Copper futures fell 1% as funds exited industrial metals and switched to gold to reduce exposure to China's struggling economy.
- Aluminium futures shed 0.9%.
The gold futures price rose by US$16.20 or 0.6% to a record high of US$2,707.50 an ounce on Thursday, as uncertainty surrounding the US presidential election and the war in the Middle East prompted investors to seek out the safe-haven asset.
- Spot gold was trading near US$2,691 an ounce at the US close.
Iron ore futures slipped 84 US cents or 0.8% to US$105.36 a tonne on Thursday as prospects of firmer global supply weighed on the steel market.
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