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Highlights
- ASX set to rise 0.25% ahead of CPI report, driven by Wall Street gains and China's stimulus.
- Gold hits US$2,658.30, iron ore jumps 6% to US$95.15, with CPI growth expected at 2.7%.
- Watch small caps: Black Canyon (ASX:BCA) for manganese, Infini Resources (ASX:I88) for uranium, and MTM Critical Metals (ASX:MTM) for e-waste recovery.
The ASX is poised for a positive start this morning, with anticipation surrounding the upcoming Consumer Price Index (CPI) report, expected to shed light on inflation trends. At 8 AM AEST, the SPI ASX200 futures contract indicated a 0.25% increase.
On Wall Street, the S&P 500 climbed by 0.25%, the Dow Jones increased by 0.20%, and the tech-heavy Nasdaq rose by 0.56%. A boost in commodity prices followed China's announcement of significant stimulus measures aimed at revitalizing its economy. Key commodities like copper, lithium, and silver surged over 4%, while crude oil prices rose by 1%. Iron ore prices also saw a significant 6% increase, positively impacting US-listed shares of BHP (ASX:BHP) and Rio Tinto (ASX:RIO), both of which climbed by around 5%.
The VIX Index, which measures market volatility, dropped by 3%, suggesting a more stable market outlook. Notably, Nvidia (NASDAQ:NVDA) gained 4% after CEO Jensen Huang completed the sale of shares under a trading plan, retaining over 75 million shares directly and 785 million through trusts. However, Visa Inc. (NYSE:V) experienced a 5.5% decline amid reports of an impending lawsuit from the US Justice Department regarding its debit card monopoly. On a positive note, Estee Lauder (NYSE:EL) rose 6% following the announcement of China’s stimulus package.
Local Inflation Insights
This morning, Australia will release its monthly CPI data at 11:30 AM AEST, with economists predicting a drop in annual growth to 2.7% from 3.5%. According to the Committee for Economic Development of Australia (CEDA), the country’s "misery index" remains elevated due to persistent inflation, which contributes significantly to economic distress. The Reserve Bank of Australia (RBA) recently maintained the cash rate at 4.35%, its highest in 12 years, with projections suggesting that interest rates will remain elevated as inflation is expected to take time to decline.
Commodity Prices
Gold prices reached an all-time high, rising by 1.2% to US$2,658.30. Oil prices closed 1.7% higher, influenced by China's stimulus and geopolitical tensions in the Middle East. The benchmark 10-year US Treasury yield traded 2 basis points lower, indicating a rise in bond prices. In the cryptocurrency market, Bitcoin increased by 2% to US$64,430, while Ethereum rose by 0.3% to US$2,659. Iron ore prices jumped by 6% to US$95.15 per tonne.
ASX Small Caps to Watch Today
1. Black Canyon (ASX:BCA): The company announced improvements in manganese feedstock quality, upgrading from about 30% to 35% manganese. Recent metallurgical tests from its KR1 and KR2 deposits suggest promising results for high-purity manganese sulfate processing.
2. Infini Resources (ASX:I88): A glaciology expert confirmed that the high-grade uranium at the Portland Creek Uranium Project likely originates locally. Ongoing work aims to map hydraulic gradients using LiDAR, with soil assay results expected by the end of October.
3. MTM Critical Metals (ASX:MTM): Promising results were reported from its Flash Joule Heating technology, achieving a 67% recovery rate for silver and 48% for copper from electronic waste. This environmentally friendly method could revolutionize e-waste recycling.
4. GenusPlus (ASX:GNP): Awarded a contract valued at approximately $28 million for power distribution infrastructure related to Fortescue's decarbonisation strategy, involving extensive underground and overhead power lines.
5. Maronan Metals (ASX:MMA): Infill drilling in the Starter Zone yielded impressive results, revealing significant intercepts of ore-grade silver and lead, enhancing resource confidence and indicating strong continuity in mineralisation.
As the ASX approaches the CPI report release, attention will remain on how these small caps respond to market dynamics and inflationary pressures.
