Risk event for the week starting 18 July: ECB rate decision
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10/06/21 10:53
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Ignoring market expectations for a hold, the RBA hikes rates for the twelfth time in thirteen months, intensifying the scrutiny on economic data and heightening concerns for the struggling ASX 200. Source: Bloomberg Indices Inflation Market Data Consumer price index Interest rate Tony Sycamore | Market Analyst, Australia | Publication date: Tuesday 06 June 2023 At its board meeting today, the Reserve Bank of Australia raised its official cash rate by 25bp to 4.10%. Once again, the RBA's twelfth rate rise in thirteen months caught the interest rate market on the wrong foot; the market had priced in an 80% chance of a 'hold' outcome. Last month, after surprising the market with a rate rise by 25bp to 3.85%, the RBA noted that inflation remained too high. It issued a warning that further rate increases might occur, depending on economic and inflation trajectories. RBA prioritises inflation management Choosing to disregard softer data in May across the Wage Price Index, labour market data, retail sales and building approvals, the RBA refocused its attention on the upside surprises in the monthly CPI indicator and the wage increase at the Fair Work Commissions Review. This move aligned with the Path of Least Regret, as anticipated here. Today's decision was influenced by a repeated note on inflation from last month's statement, in which the RBA underscored the significance of keeping inflation expectations stable, stating, "Inflation in Australia has passed its peak, but at 7 per cent, it remains too high. It will be some time yet before it re-enters the target range." The RBA maintained its tightening bias and noted that further rate hikes could occur, depending on incoming data. "Some further tightening of monetary policy may be required to ensure that inflation returns to the target within a reasonable timeframe, but that will depend upon how the economy and inflation evolve." Key data points to determine RBA's next move The following incoming data will be closely scrutinised for clues around when and how much further the RBA might tighten. RBA Governor Lowe's speech: Wednesday, 7 June at 09:20 am AEST Q1 2023 GDP: Wednesday, 7 June at 11:30 am AEST (preview available) Labour force report for May: Wednesday, 15 June at 11:30 am AEST RBA Meeting Minutes: Tuesday, 20 June at 11:30 am AEST Monthly CPI indicator for May: Tuesday, 28 June at 11:30 am AEST Retail sales: Thursday, 29 June at 11:30 am AEST The interest rate market is 80% (19bp), priced for another 25bp hike to 4.35% by the September RBA Board Meeting. What happened to the ASX 200? Today's RBA rate hike is another RBA hammer hit to the ASX 200, already trading 36 points lower at 7180 (-0.5%), before the meeting following a weak lead from offshore markets. Post the announcement, the ASX 200 dropped another 55 points to a low of 7125, led by the Consumer-facing Discretionary (-2.1%) and Staples (-1.14%) Sectors. Also weighing on the index, a 1.3% fall in the heavyweight Financial Index, heavily exposed to struggling households facing cost-of-living pressures and rising interest rates. A break of support at 7115 (the 200-day moving average) and last week's 7077 low would be problematic and lead to a test of year-to-date lows at 6900. ASX 200 daily chart Source: TradingView TradingView: the figures stated are as of June 6, 2023. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation. -
By tradinglounge · Posted
Monster Beverage Corp., Elliott Wave Technical Analysis Monster Beverage Corp., (MNST:NASDAQ): Daily Chart, 6 June 23, MNST Stock Market Analysis: Looking for upside into wave (v) as we anticipated last week. We are looking for continuation higher even if we could double correct lower into wave (iv). MNST Elliott Wave Count: Wave (v) of {iii}. MNST Technical Indicators: Above all averages. MNST Trading Strategy: Looking for upside resumption into wave i to then look for long on the pullback in (ii). TradingLounge Analyst: Alessio Barretta Monster Beverage Corp., MNST: 4-hour Chart, 6 June 23 Monster Beverage Corp., Elliott Wave Technical Analysis MNST Stock Market Analysis: It looks like we could be near the top of potential wave i to then pullback in wave ii. MNST Elliott Wave count: Wave i of (v). MNST Technical Indicators: Above all averages. MNST Trading Strategy: Looking for upside as suggested. -
Early Morning Call: AUD jumps as RBA hikes cash rate to 4.1% A survey published last Friday said economists expected the Reserve Bank of Australia to stay put, forecasting the cash rate to reach 4.1% only by end of the third quarter. Angeline Ong | Presenter, Analyst and Content Editor, London | Publication date: Tuesday 06 June 2023 Indices overview US equity markets ended the session lower on Monday evening. The S&P 500 was up in the first part of the day and the market hoped the index would end the day in bull market territory. In APAC, indices mostly rose. Australia’s S&P/ASX 200 lost ground as Australia's central bank unexpectedly raised interest rates by a quarter point, taking the cash rate to 4.1%. A Reuters survey published last Friday said economists expected the Reserve Bank of Australia (RBA) to stay put, forecasting the cash rate to reach 4.1% only by end of the third quarter (Q3). A hawkish RBA added in its statement that some further tightening could be required to tame inflation, currently pointing at 7% year-on-year (YoY). The labour market also remains tight: the unemployment rate is at its lowest point in nearly half a century. The reaction of the Australian dollar was instantaneous. The currency jumped to a two-week high against the greenback, a four month high against the New Zealand dollar, and a six month high against the yen. Macroeconomics British retail sales unexpectedly slowed in May to a seventh-month low, according to the British Retail Consortium (BRC). Spending at BRC's members' stores rose 3.9% year-on-year, below the 5.2% recorded in April. The actual reading also missed an estimate of 5.2%. This weak consumption trend is unlikely to change in coming months according to the BRC Cchief executive, Helen Dickinson. Food was the only area where consumers spent more last month, because of two bank holidays and the long weekend of King Charles' Coronation. Shoppers reined in spending on non-essential items. The latest official figures revealed that food price inflation remained near a 46-year high at 19.1% and show little sign of coming down in the near future. This gives ammunition to the Bank of England (BoE) to continue to tighten. The Bank of England reiterated it will keep raising interest rates if inflation looks persistent. The bank is expected to increase to 4.75% from 4.5% at its next meeting on June 22, the market currently sees interest rates peaking at 5.5% later this year. In Germany, factory orders fell by 0.4% in April month-on-month (MoM), after -10.7% in March. Economists had anticipated a 3% rise. Retail sales in the eurozone are expected to increase by 0.2% in April MoM after a 1.2% drop in March. Apple Apple unveiled at its annual developer conference yesterday what CEO Tim Cook called "the first Apple product you look through, not at". Called the Vision Pro, it is a new virtual reality headset, that investors already see as the group's riskiest bet since the introduction of the iPhone. Why? First because of its price. Starting at $3,499, it's more than three times the cost of the priciest of its competitors, the Meta Quest Pro. Risky also because Apple enters a market that is crowded with devices that are struggling to gain traction with consumers. Currently, the virtual reality market is dominated by Meta, which controls about 80% of the market, and many see this latest Apple venture as the next episode of years of clashes between the two companies. Apple said it has been working with Adobe and Microsoft to put their apps on the new headset. Set for release early next year in the US, owners will also have access to Disney+ streaming service and Apple TV+. Besides the headset, Apple unveiled a new 15-inch MacBook Air and a powerful chip called M2 Ultra. It hardly excited investors though. The stock set a new all-time high ahead of the launch but ended the session down on the IG platform. This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.
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