ASX poised for steady rise as Chinese Central Bank comforts markets
US:Overnight, US markets rallied quite favourably with each of the indices gaining between 1.2% – 1.4%. Investors were somewhat relieved to receive news that China's Central Bank stated they are targeting to stabilise the Yuan and not use currency as a trade weapon. Tensions eased further as the US National Economic Council announced President Trump plans to host a Chinese Trade delegation in September, expressing their deep interest to negotiate on a deal.The bounce in equities were led by stocks that fell heaviest during Monday's sell off, including Apple (+1.5%), Micron Technology (+1.5%) and Nike (+3%).
ASX futures are up 11 points, indicating a potential rebound after the Australian market sold off quite heavily for the second day in a row on Tuesday. Our index fell 2.4% (162.2 points) yesterday, following a sharp decline in global equity markets. The RBA lowered Australia's GDP growth expectations for 2020 and 2021 as interest rates were left unchanged at 1.0%.
Global oil prices fell steeply with Brent Crude dropping 1.5% to near 7 month lows. Gold futures rose 0.5% to US$1,470 and iron ore fell 1.3% to US$97.90 a tonne.
The spot price of gold is currently up 1.03% at US$1,478.87 per ounce.
The AUD is currently up 1.03% at US$0.6772.
This article was written by Charles Odontuyaa – Portfolio Manager, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3633.