ASX 200 to fall; oil, gold dip on rising recession concerns

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ASX 200 to fall; oil, gold dip on rising recession concerns

 ASX 200 to fall; oil, gold dip on rising recession concerns
Image source: © Wutzkoh | Megapixl.com

Highlights

  • ASX 200 is expected to fall on Wednesday.

  • The latest ASX futures suggest that the Australian market may open 63 points or 1% lower.

  • In US, the Dow Jones slipped 0.4%, the S&P 500 surged 0.2%, and the NASDAQ advanced 1.75%. 

ASX 200 is expected to fall on Wednesday following volatile overnight trade on Wall Street. The domestic market would also be under pressure due to commodity stocks as concerns over looming recession have overlapped a demand crunch. On Tuesday, commodities such as gold, copper and oil slipped.

The latest ASX futures suggest that the Australian market may open 63 points or 1% lower. On Tuesday, despite the Reserve Bank of Australia's (RBA) 50 basis points rate hike,  benchmark ASX 200 index climbed 0.25% to 6,629.3 points.

The US stocks rebounded slightly after dipping sharply in the early trading session, following their closure for Monday's holiday. In US, the Dow Jones slipped 0.4%, the S&P 500 surged 0.2%, and the NASDAQ advanced 1.75%. 

Investors would be closely eyeing the release of US Federal Reserve and European Central Bank’s monetary policy minutes from their latest outings, along with June’s US payroll numbers scheduled on Friday.

In Europe, the Stoxx 50 fell 2.7%, the FTSE dipped 2.9%, the CAC declined 2.7% and the DAX ended 2.9% lower.

Bond yields

US Treasury yields fell as concerns over economic growth hurt risk appetite. The yield of US 10-year note last rose to 2.809%. The 2-year note’s yield last rose to 2.8163%.

On the other hand, the euro fell by nearly 1.8% against the US dollar to US$1.0236, its weakest since December 2002. Meanwhile the US dollar index was up 1.36%.

Oil prices fall

Rising recession fears have weighed on oil prices in the recent past. Traders fear that recession may curtail demand. The concerns have only compounded as Norwegian offshore workers started a strike on Tuesday that would cut down oil and gas output.

  • WTI closed down 8.24% at US$99.50 per barrel.
  • Brent finished at US$102.77, down 9.45% on the day.

Gold price slips

Gold prices were weighed down by strong US dollar.

  • Spot gold fell 2.3% to US$1,767.05 an ounce.

On Tuesday, Dalian iron ore futures surged with the market advancing for the first time in four sessions. The commodity advanced on expectations of lower US tariffs on Chinese goods, even as concerns on global recession limited gains.

Meanwhile, bitcoin remained virtually unchanged from the previous session at US$20211.63.

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