ASX 200 to slip 1.5% on Powell’s speech; Fortescue results ahead

2 min read | August 29, 2022 08:00 AM AEST | By Ashish

ASX 200 to slip 1.5% on Powell’s speech; Fortescue results ahead — Image source: © Wutzkoh | Megapixl.com

Highlights

The Australian shares are set to fall at the open on Monday.

The latest ASX Futures indicate that the ASX 200 may open 104 points or 1.5% lower.

The Dow Jones fell 3%, the S&P 500 dipped 3.4%, and the NASDAQ ended 3.95%.

The Australian shares are set to fall at the open on Monday taking cues from a sellout on Wall Street last Friday after US Federal Reserve Chairman Jerome Powell’s hawkish comments at Jackson Hole meeting.

The latest ASX Futures indicate that the ASX 200 may open 104 points or 1.5% lower. Last Friday, the benchmark index closed 0.7% higher at 7,104.1 points.

The A2 Milk Company Ltd and Fortescue Metals Group Ltd are among a few stocks which are set to announce their financial results on Monday.

Global equities

The global stock markets fell after Powell’s announcement that the US economy would require tight monetary policy "for some time" before inflation was tamed. While Powell didn’t directly announce what the US central bank would do at its upcoming 20-21 September monetary policy meeting, there are wide expectations of either a 50 or 75-basis-point rate hike.

On Wall Street, the Dow Jones fell 3%, the S&P 500 dipped 3.4%, and the NASDAQ ended 3.95% lower.

European stocks also showed weakness on downbeat German consumer sentiment data. The Stoxx 50 dipped 1.9%, the FTSE fell 0.7%, the DAX dropped 2.3%, and the CAC ended 1.7% lower.

Bond yields

The yields on 10-year Treasury notes was up near 1 bps to 3.0334%. On the other hand, the US dollar erased early losses following Powell's remarks to trade up 0.30% at 108.8.

Oil prices rise

Oil prices rose on Friday amid signs that OPEC could cut output.

Brent crude futures surged US$1.65 to closed at US$100.99 a barrel.

WTI crude futures rose 54 cents to finish at US$93.06 a barrel.

Gold prices fall

Gold prices fell on Friday as the prospect of Fed raising rates weighed on the yellow metal.

Spot gold was at US$1,736.813 per ounce, down 1.23%.

Iron ore prices gain

On Friday, Chinese iron ore prices reported their best weekly gain in four, as steel mills hiked their purchases amid low inventories.

The most traded January iron ore on the Dalian Commodity Exchange closed 3% higher at 735 yuan (US$107.10) a tonne and up 6.4% on a weekly basis.

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