• ASX was down 0.5%
  • The US Fed signals tightening
  • Aussie payrolls jobs almost flat in March

 

The ASX followed Wall Street into the red, falling by 0.60% as market sentiment turned sour following some Fed news overnight.

Minutes from the last Fed meeting revealed that board members planned to reduce the central bank’s massive bond holdings by $US95 billion a month starting in May.

The reduction will include $US60 billion in Treasury bonds, and $US35 billion in mortgage-backed securities.

The minutes also indicated that many Fed officials had wanted to hike rates by 50bp in March, but decided to go with 25bp due to the Ukraine crisis.

On the ASX, shares in rate sensitive stocks like Tech and Discretionary were rattled, down by 2% and 1% respectively. Tech heavy Nasdaq has lost 5% in the last two days.

ASX Energy stocks were also sold off as oil prices tumbled 5% on news that the International Energy Agency (IEA) will release a combined 120 million additional barrels of oil from strategic reserves.

Meanwhile, Australian payroll jobs rose slightly in the first weeks of March. The ABS said today that payrolls rose 0.2% in the fortnight to March 12, following a 0.8% drop in the second half of February.

Australia’s trade surplus in February fell to $7.5 billion, far less than the forecast of $12.2 billion. This came as import prices rose, especially fuel and food items.

 

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Magellan Financial (ASX:MFG) soared as much as 11% today, but finished flat at the close.

The asset manager reported that its fund outflows had slowed to $1.1 billion from March 11 to 31, after a $5bn exodus in the previous period.

Another asset manager, GQG Partners (ASX:GQG), also rose 5% as it experienced net inflows of US$3.4b for the quarter.

GQG sees business momentum across multiple geographies, particularly in the Australian and Canadian retail channels.

 

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