The ASX200 ended the day slightly higher (+0.06%) after recovering from morning losses. This follows last week’s 2.2% loss and comes ahead of the RBA’s rates decision tomorrow.
Sector performance was mixed with Financials, Industrials and Materials trading higher while Real Estate was well in the red, led lower by Goodman Group (ASX:GMG) which lost 3.79%.
Iron ore bounces
The iron ore price is back above US$100 on Chinese industrial data. Iron ore hit a 7-month low on the weekend amid waning demand from China, as iron ore inventories reached their highest level in more than a year last week.
But, as reported today, China’s industrial output rose by a more than expected 7% in January-February from the same period a year earlier, faster than the 5.2% rise that economists anticipated.
While industrial output beat estimates, consumption continues to disappoint with consumer and business confidence weighed down by an uncertain income outlook.
RBA decision tomorrow
No change to the current 4.35% cash rate is expected when the RBA announces its decision tomorrow.
The markets are still fully priced for a rate cut to 4.1% by September 2023 and a follow-up cut to 3.85% in December but some economists are now betting that we won’t see a rate cut at all this year due to a combination of rising house prices, weak productivity growth and federal government spending.
HSBC chief economist Paul Bloxham said, “We see the RBA as unlikely to want to cut rates when the housing market is so tight and housing prices are rising solidly, for fear of pump-priming and driving a further housing price boom.
“Productivity is improving too slowly and wages growth is not easing fast enough to see this cost pressure reduce soon enough to convince the RBA to cut this year in our view.”
JP Morgan chief economist Ben Jarman also doesn’t expect the RBA to cut rates until the first quarter of 2025, saying, “We also see core inflation staying above 3% until quite late in the year.”
In addition to the RBA, this week will see the Bank of Japan and the US Federal Reserve announce policy decisions.
Five at five
American Rare Earths aims to 'REEshore' critical minerals as scoping study confirms robust economics
A scoping study for the Halleck Creek Project of American Rare Earths Ltd (ASX:ARR, OTCQB:ARRNF) in the major minor hub of Wyoming, USA, backs the company’s thesis that the rare earth play has potential as a low-cost, scalable, world-class REE project.
OzAurum Resources advances critical mineral assets in Brazil, seeking further lithium opportunities
OzAurum Resources Ltd (ASX:OZM) has advanced its Boca Rica Lithium Project as well as niobium and rare earth element (REE) assets in Brazil, preparing to drill at Boca Rica within a few weeks while also seeking further lithium opportunities in the area.
Poseidon Nickel divests Lake Johnston to MinRes; will boost exploration strategy
Poseidon Nickel Ltd (ASX:POS, OTC:PSDNF) will sell its Lake Johnston assets to Mineral Resources Ltd (ASX:MIN), enabling the company to intensify exploration activities and focus on operational efficiencies.
International Graphite’s Springdale tests demonstrate ideal suitability for lithium-ion batteries
International Graphite Ltd (ASX:IG6) has confirmed that graphite from its flagship Springdale Project is well suited for lithium-ion battery anode manufacturing with purification test work achieving results of 99.96-99.97% loss on ignition (LOI), exceeding battery industry standards of 99.95%
Evolution Energy Minerals welcomes strategic shareholder in BTR with 9.9% stake
Evolution Energy Minerals Ltd (ASX:EV1) welcomes BTR New Material Group Co. Ltd. as a key strategic shareholder with a 9.9% interest in the development-ready company which is on track to supply sustainable graphite products for the global green economy.
On your six
Australian Taxation Office ramps up debt recovery sparking small business insolvency fears
The Australian Taxation Office (ATO) is intensifying its debt collection efforts, targeting more than A$34 billion in outstanding debts from small businesses and self-employed Australians, a situation that experts warn could lead to a surge in business insolvencies.
One to watch
Galileo Mining identifies drill targets ahead of drill season at Norseman
As it moves a step closer to a new drilling season, Galileo Mining Ltd (ASX:GAL, OTC:GLMGF) managing director Brad Underwood sits down with Jonathan Jackson to discuss the program and identified targets.