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ASX 5 things: ASX 200 edges higher on strength in mining stocks


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We highlight five things that investors and traders need to know on Wednesday, 4 August.

Mining
Source: Bloomberg
 
 

New Zealand jobs data shows a roaring economy

New Zealand’s employment data was published this morning, and pointed to an economy that continues to run hot. The country’s unemployment rate plunge to 4.0% from 4.6% last quarter, beating by some margin the 4.4% estimate going into the release. The data was the latest bit of evidence of a very robust economic expansion of New Zealand’s economy and provided a little vindication for the Reserve Bank of New Zealand’s move last month to end its quantitative easing program. The markets are betting now on an even shorter path to rate hikes from the central bank, with the NZD/USD jumping above 0.7050 this afternoon as a result.

NZD/USD
Source: IG charts

Australian Retail Sales drop as lockdowns hit consumption

Australian Retail Sales data revealed the impact on consumption of the recent lockdowns across the country, with retail sales for the month declining by 1.8%, as expected. In the data’s accompanying commentary, the Australian Bureau of Statistics outlined the sectors hardest hit by restrictions - cafes, restaurants and takeaway food services -6.0%, clothing, footwear and personal accessory retailing -9.5%, department stores -7%, other retailing -1.6% and household goods retailing -1.3%.

Oil prices under pressure as demand concerns grow

The price of ETFS Brent Crude has extended its drop in the last 24 hours, with WTI having fallen by as much as 6.75% from last week’s highs, before retracing some of those losses in Asian trade today. The fall seems to have come off the back of some mounting concerns about the global economy’s outlook, and whether its expansion may have peaked. On top of that, there remains some wariness about the strength of emerging market economies, which are struggling to combat the effects of the spread of the Covid-19 Delta variant.

Learn more about trading oil.

ASX 200 pushes back to record highs

It’s been another record-breaking day for the Australia 200 today, with the index pushing back towards record highs. As had been the case in Wall Street trade in the night prior, it was a rebound in cyclical stocks that underpinned the charge higher, with energy and mining shares outperforming. Coming into the back end of the session, the ASX 200 is wrangling at the 7500 mark, a key psychological level for market participants.

Data
Source: ASX

Focus slowly turns to US labour market data

The remainder of the week in financial markets will be dominated by speculating about and reacting to the US labour market data. The climax of the trading week will be on Friday night with Non-Farm Payrolls. However, traders will receive their entrée this evening, with the ADP Non-Farm Payrolls numbers. Reflecting the strength also expected out of the official NFPs, the ADP data is tipped to explain how 695,000 jobs were added to the US economy last month.

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Kyle Rodda | Market Analyst, Australia 
04 August 2021

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