ASX Large Caps: ASX rallies further after Lowe’s remarks; Powell speaks tonight

• The ASX rallies further after remarks from RBA Governor Philip Lowe
• Lowe says the pace of rate hikes could slow down
• Tyro Payments rejects takeover bid

The ASX 200 surged in the afternoon following a speech from RBA Governor, Philip Lowe.

The index was already up by 0.90% coming out of the lunch break, but jumped further to close 1.77% higher following Lowe’s comments.

Delivering a speech at the Anika Foundation, Lowe signalled a pivot to the Bank’s monetary policy, saying that the pace of interest rate rises could slow.

“We are conscious that there are lags in the operation of monetary policy and that interest rates have increased very quickly,” Lowe told the audience.

“And we recognise that, all else equal, the case for a slower pace of increase in interest rates becomes stronger as the level of the cash rate rises,” he said.

Lowe also said that some soul searching needed to happen as the Bank had badly misread the trajectory of inflation.

“A year ago, the RBA was forecasting that inflation over 2022 would be just 1.75 per cent. Now, we are expecting CPI inflation this year to be around 7.25 per cent. This is a very big change and a very large forecast miss,” he said.

All ASX sectors except Energy rose as the global bond market selloff finally eased.

Overnight, US treasuries climbed (yields fell), while Australian bond yields also slid today after Lowe’s speech.

The Aussie dollar has inched higher to US67.7c following Lowe’s speech, after shedding more than 0.6c this week.

Back to the ASX, payments company Tyro Payments (ASX:TYR) grabbed most of the headlines today after it rejected a takeover offer.

The Tyro share price surged 28% to $1.26 after it rejected advances from a consortium of private equity investors led by Potentia Capital Management, which offered Tyro shareholders a $1.27 cash + scrip deal.

In coming to its decision, the Tyro Board noted:

“The indicative proposal is materially below Tyro’s fundamental value and highly opportunistic given the offer price is substantially below where Tyro’s share price has traded in the past 12 months.”

Looking ahead tonight, US Fed Chairman Jerome Powell will speak on a panel, while US consumer credit data for July will be released.

BIG CAP WINNERS

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Lithium miners like Pilbara Minerals (ASX:PLS), Allkem (ASX:AKE) and IGO (ASX:IGO) were some of the best performers today, up around 4-6%.

Tech giant Megaport (ASX:MP1) rose by 12% on no news.
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BIG CAP LOSERS

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Woodside Energy (ASX:WDS) drops 6% due to ex dividend day.