Market highlights and 5 ASX small caps to watch on Monday

• ASX to open lower after a fall on Wall Street
• US non-farm payrolls were higher than expected
• The RBA is set to meet tomorrow

Aussie shares are set to fall this morning after a strong non-farm payrolls data in the US sparked falls on Wall Street.

At 8.30am, the ASX 200 futures is pointing down by 0.45%.

Overnight, the Dow and S&P 500 fell by more than 1%, while tech heavy Nasdaq slipped 2.5%.

The US non-farm payrolls increased by 390,000 in May, above the 328,000 Dow Jones estimate. The US unemployment rate meanwhile, was held at 3.6%, the lowest level since 1969.

The data has bolstered the case for an aggressive monetary policy tightening from the Federal Reserve, which will decide on the next round of rate hikes later this week.

Back home, the RBA is also set to have its board meeting tomorrow, where it is widely expected the central bank will raise the cash rate from the current setting of 0.35% to 0.60%.

Australia’s red hot Q1 inflation data, which pushed core inflation 70bp above the RBA’s 2-3% target band, could also bolster the case for a 40bp rate hike. Minutes from the May meeting has already shown that board members had discussed three options, including a 40bp hike.

“Considering all of the above, a 40bp rate hike is most likely at the Tuesday’s meeting, which will take the cash rate to 0.75%,” said Tony Sycamore, market analyst at City Index.

“The RBA is then expected to deliver another 75bp of hikes (25bp each in July, August and November), taking the cash rate to 1.5% by year-end,” he added.

Meanwhile, shares in Tesla fell 9% after reports circulated that Elon Musk wants to cut 10% of the electric car maker’s headcount.

Global oil prices rose around 2% as traders believe that OPEC’s decision to ramp up its output to 650,000 barrels a day in July and August may not be enough.

On the ASX, set to make their IPO debut this week on the ASX are three explorers: Uvre Ltd (ASX:UVA), Kingsland Minerals (ASX:KNG), and Southern Palladium (ASX:SPD).

5 ASX small caps to watch today

Alloggio Group (ASX:ALO)
The short term accomodation provider has upgraded its FY22 revenue guidance from $21.5m to $26m. EBITDA is now expected to come in between $10.5m-$11m, compared to the $8.6m guidance previously forecast. Alloggio’s properties are located in popular tourism destinations on the east coast of Australia.

Nyrada (ASX:NYR)
Nyrada has unveiled a target for its brain injury program. The biotech says it wants to target a class of proteins known as the “Canonical” Transient Receptor Potential, or TRPC ion channels. Following brain injury, these channels are constantly activated, allowing sustained calcium entry into the cells which in turn causes cell death. Nyrada’s brain injury drug candidate NYR-BI02 is a blocker of three subtypes of the channel.

Complii Fintech (ASX:CF1)
Complii is set to acquire fellow ASX-lister Registry Direct (ASX:RD1). The offer price will be at an implied price of $0.0194, based on Complii’s last trading day VWAP of $0.0110.

Tennant Minerals (ASX:TMS)
The first hole in the new diamond drilling program at the Bluebird copper-gold discovery near Tennant Creek has produced a 55m intersection of copper mineralisation. Results include: 50m @ 2.70% Cu, 0.52g/t Au, 29.8g/t Ag from 158m.

Red 5 (ASX:RED)
Red 5 has completed the first gold pour at the 100%-owned 2.4Moz, 16-year life-of-mine King of the Hills Gold Project in WA. The first smelt delivered 2 gold doré bars weighing 1,588 ounces, following the recent commissioning of the gravity and elution circuits.