• Local shares slipped half a percent on Tuesday
  • The RBA increased rate by 25bp again
  • Coal stocks rose while Tech flopped

 

Local shares traded sideways in the leadup to the RBA’s decision this afternoon, before finishing Tuesday 0.40% lower.

The RBA board decided to hike its rate for the eighth consecutive month , hiking it another 25bp today to 3.1%.

It’s the highest cash rate in a decade, but still doesn’t make a dent on the inflation rate which is at 6.9%.

“The size and timing of future interest rate increases will continue to be determined by the incoming data,” said RBA boss Philip Lowe.

“Given the importance of avoiding a prices-wages spiral, the board will continue to pay close attention to labor costs and price setting by firms,” he added.

The RBA won’t meet again until February, so technically January will be kind of a pause.

The Aussie dollar dropped after the news, trading at US67.15c while tech stocks on the ASX tumbled.

Earlier today, the ABS reported that household spending continued to rise in October, increasing by 20.7% compared to the same time last year.

Spending was made in transport (up 42.3%), hotels, cafes and restaurants (up 39.9%), and clothing and footwear (up 32.2%). All saw strong increases but have slowed in comparison to the previous two months.

Meanwhile, Australian agricultural output is on track for a bumper 12 months, with a gross value at a near record of $85 billion in 2022-23, just short of last year’s total.

However inflation is squeezing demand and producer incomes, says the DAFF (Department of Agriculture, Fisheries and Forestry).

Back to the ASX, coal stocks rose today as the coal (ICE-GC Newcastle) price moved more than 2% higher overnight.

Oil stocks were mixed as the G7 and Australia formally put a US$60 a barrel cap on Russian exports.

Looking ahead to Wall St session tonight, the US will release its international trade data for October.

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Beach Energy (ASX:BPT) fell 5% after news that its key contractor Clough went into voluntary administration.

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