A rebound in commodities looks set to push the ASX up after a flat close yesterday. ASX futures were up 61 points or 0.9% to 7,021 early this morning on the back of a robust iron ore price, which soared to $US128 a tonne.
Inflation figures imminent
Over in the US, there is muted optimism as the markets await the release of the October consumer price index (CPI) report for clues about the next Federal Reserve move.
In September, headline inflation held steady at 3.7% year on year, following a high of 9.1% in June 2022. Core inflation, which excludes volatile items such as food and energy, fell to 4.1% from 4.3% the previous month.
A Reuters poll of economists broadly tips US CPI to slow to 3.3% from 3.7% in September. Core inflation is expected to remain stable at 4.1%.
But there are other factors that will cause jitters – the US Government could face a partial shutdown if Congress fails to pass a temporary funding plan. This could see services reduced or stopped.
The S&P 500 shed 0.1%, the Nasdaq slipped 0.2% and the Dow Jones gained 0.2%.
Currencies and commodities
Global currencies were strong against the greenback in European and US trading sessions The Euro was on the climb – from US$1.0663 to US$1.0705, settling near US$1.0695 by the close of the US market. The Aussie dollar showed resilience, advancing from 63.59 US cents to 63.90 US cents, closing near 63.75 US cents.
The Japanese yen was strong, going from 151.90 yen in the dollar to JPY151.22 and resting at JPY151.65.
Global oil prices surged over 1% on Monday, following the release of OPEC's monthly market report. Investor concerns about weakening demand eased as OPEC underscored the resilience of oil market fundamentals and attributed price declines to speculators.
OPEC made a marginal upward revision to its 2023 global oil demand growth forecast while maintaining an optimistic outlook for 2024. Brent crude was up US$1.09 or 1.3%, reaching US$82.52 per barrel. US Nymex was up by US$1.09 or 1.4%, reaching $78.26 per barrel.
Base metals were up in trade. Copper futures surged 2.2%, while aluminium futures registered a gain of 0.5%. Gold futures gained US$12.50 or 0.6%, reaching US$1,950.20 per ounce, while spot gold was trading near US$1,946 an ounce at the US market's close. Iron ore futures were also up – rising by 27 US cents or 0.2% to reach nearly eight-month highs of US$128.34 per tonne, driven by improving prospects for Chinese demand.
What’s happening in small caps?
Making news this morning, which you can read more about throughout the day with Proactive:
- FYI Resources Ltd (ASX:FYI, OTCQX:FYIRF) has received an R&D tax incentive rebate payment of $1.2 million for the 2022-2023 financial year.
- Kingfisher Mining Ltd (ASX:KFM) has picked out REE mineralisation during ongoing exploration at Mick Well within the highly prospective Gascoyne Province.
- AKORA Resources Ltd’s Bekisopa Iron Ore Project in Madagascar is a step closer to production after the company’s updated scoping study showed the project to be economically viable.
- Auric Mining Ltd (ASX:AWJ) has reported further gold sales at the Perth Mint following stage one mining from the Jeffreys Find Gold Mine near Norseman.
- Alkane Resources Ltd (ASX:ALK, OTC:ALKEF) has fielded results of the next stage of its metallurgical testwork program at the company’s Northern Molong Porphyry Project in Central New South Wales.