The Australian share market looks set to slip from its 10-week peak this morning, with ASX futures down 0.5%, as investors await confirmation from today’s December board meeting of the RBA that interest rates will remain unchanged.
Early Christmas present from RBA
Many Australians will be hoping for a rate reprieve as we hurtle into the festive season. Projections are mostly in favour of the 'gift' of no movement in the cash rate, but some economists suggest the possibility of a rate increase as soon as early 2024 if inflationary pressures persist.
Overnight on Wall Street, there was a downturn as investors engaged in profit-taking following a five-week surge.
This led to declines in the Dow Jones by 0.1%, the S&P 500 by 0.5% and the Nasdaq by 0.8%.
On a more positive note, the US 10-year Treasury yield saw a notable rise to nearly 4.3%, signalling investor anticipation of potential rate cuts by the Federal Reserve – something Australian investors can only dream about right now.
European markets contract
European stock markets slipped on Monday, winding back an early session peak that marked a four-month high.
The mining sector saw a 2.4% drop, influenced by a robust US dollar impacting copper prices, and energy stocks decreased by 1.5% following a continued dip in oil prices.
The pan-European FTSEurofirst 300 index witnessed a marginal fall of less than 0.1%. The UK's FTSE 100, heavily weighted with commodities stocks, declined by 0.2%.
Major London-listed mining companies, including Glencore (LON:GLEN), Rio Tinto (ASX:RIO), and Anglo-American, experienced losses ranging from 2.7% to 3.7%.
Other movements we saw include:
- ASX 200 (Monday close): +0.7% to 7,125 points.
- Australian dollar: -0.8% to 66.2 US cents.
- Stoxx Europe 600: -0.1% to 466 points.
- Spot gold: -1.9% to $US2,030/ounce.
- Brent crude: -0.9% to $US78.21/barrel.
- Iron ore: +1.8% to $US128.80/tonne.
- Bitcoin: +7.8% to $US41,839.
- US Govt 10-year bond: +5bps to 4.28%.
Bitcoin impresses
This week, cryptocurrencies, including Bitcoin, experienced a significant upsurge. The digital currency surged by up to 2.9%, achieving a peak of $US40,867.
This marks a stunning 146% increase in its value since the beginning of 2023.
The last time Bitcoin reached similar heights was in April of the previous year, prior to the Terra USD stablecoin debacle, which triggered a $US2 trillion decline in the cryptocurrency market.
Shares of leading tech company Nvidia suffered due to regulatory concerns over chip exports to China and reports of insider stock sales. Moreover, the technology sector as a whole, including major firms like Meta Platforms, Netflix (NASDAQ:NFLX) and Apple (NASDAQ:AAPL), saw declines between 1% and 2.7%.
In commodities, Brent crude oil decreased by 0.9% to $US78.21 per barrel and iron ore rose by 1.8% to $US128.80 per tonne.
Gold prices briefly surged to a record before dropping 2%.
The Australian dollar weakened, falling 0.8% to 66.2 US cents, reflecting broader currency trends against the strengthening US dollar.
What’s happening in small caps?
The S&P/ASX Small Ordinaries closed at 2,767.60 yesterday, gaining 1.12% on the previous day.
Making news this morning, which you can read more about throughout the day with Proactive: