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Highlights
The Australian share market is poised to open lower on Wednesday.
According to the latest SPI futures, the ASX 200 is likely to open 54 points or 0.7% lower.
On Wall Street, the Dow Jones fell 0.8%, the S&P 500 dropped 1.26%, and the NASDAQ tumbled 2.26%.
The Australian share market is poised to open lower on Wednesday following Wall Street’s weak closing. The losses in energy stocks are likely to weigh on the stock market as oil prices fell overnight, while renewed fear of a potentially faster global rate hike cycle may keep risk appetite in check.
According to the latest SPI futures, the ASX 200 is likely to open 54 points or 0.7% lower. On Tuesday, the benchmark index rose 0.2% to 7,527.9 points.
Meanwhile, the Reserve Bank of Australia (RBA) announced Tuesday its decision to keep the cash rate target unchanged at 0.1%.
“The Board has wanted to see actual evidence that inflation is sustainably within the 2 to 3 per cent target range before it increases interest rates,” said RBA Governor Philip Lowe.
On global front, the stocks fell on Tuesday while US Treasury yields rose to multi-year highs as comments from US Federal Reserve Governor Lael Brainard put investor focus on the possibility of aggressive monetary policy tightening by the central bank to curb inflation.
Brainard said she expects a combination of interest rate increases and a rapid balance sheet runoff to bring US monetary policy to a "more neutral position" later this year, with further tightening to follow as needed.
Wednesday brings the release of minutes from the Fed's last policy meeting. The ECB will publish its equivalent minutes on Thursday.
On Wall Street, the Dow Jones fell 0.8%, the S&P 500 dropped 1.26%, and the NASDAQ tumbled 2.26%.
In Europe, the Stoxx 50 fell 0.8%, the FTSE rose 0.7%, the CAC fell 1.3%, and the DAX dropped 0.7%.
Meanwhile, Ukrainian President Volodomyr Zelenskiy told the UN Security Council on Tuesday that Russia must be held accountable over allegations of war atrocities.
Bond yields
- 2-year yield: US 2.51%, Australia 1.92% (US prices as of 4.59 PM in New York)
- 5-year yield: US 2.70%, Australia 2.70%
- 10-year yield: US 2.55%, Australia 2.85%, Germany 0.61%
The dollar index rose as high as 99.526, the highest since late May 2020.
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Oil prices fall
Oil prices inched lower on Tuesday on concerns that COVID-19 lockdowns in China could impact demand.
- Brent futures fell 89 cents, or 0.8%, to settle at US$106.64 a barrel.
- WTI crude fell 1.3% to settle at US$101.96.
Gold prices dip
Gold prices fell on Tuesday as expectations for more aggressive monetary policy tightening by the Federal Reserve offset safe-haven demand for bullion.
- US gold futures settled down 0.3% at US$1,927.50.
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