• The US Fed increased its rates by 0.50% overnight
  • Wall Street surges after Chairman Jerome Powell comments
  • Oil traders brace for potential EU’s total embargo of Russian oil

ASX stays flat despite Wall Street’s best day in 2 years

The ASX 200 is set to open flat this morning despite a surge on Wall Street overnight. At 8am AEDT, the ASX 200 June futures contract is pointing down marginally by 0.03%.

Wall Street had one of its best days since May 2020 as Fed Chairman Jerome Powell eased concerns the central bank will embark on a more aggressive tightening pace for the remainder of this year.

Powell increased the Fed cash rate by 50bp overnight but ruled out the possibility of a 75bp hike anytime soon, telling the FOMC press conference it “wasn’t something the committee was actively considering,”

The Chairman also said here was “a broad sense on the committee that additional 50 basis-point increases should be on the table for the next couple of meetings.”

Wall Street reacted to Powell’s comments by having its best day in two years, as all three major US stockmarket indices surged – the S&P 500 by 2.99%, the Dow by 2.81% and tech heavy Nasdaq by 3.19%.

Major currencies also surged against the US dollar, with the AUD rallying to US 72.5c, while 2-year US treasury yield fell by 13bp on the news.

Bitcoin was also up by around 5%, and at 8.30am AEDT the crypto is trading at US$39,750.


Oil prices rise on potential Russian ban

Meanwhile, global oil prices rose again by around 5% as Brent crude trades at US$107.5.

This comes as the European Commission President Ursula von der Leyen proposed a phased embargo on Russian oil over the next six months.

“We now propose a ban on Russian oil. This will be a complete import ban on all Russian oil, seaborne and pipeline, crude and refined,” she said.

“We will make sure that we phase out Russian oil in an orderly fashion, in a way that allows us and our partners to secure alternative supply routes and minimises the impact on global markets.”


5 ASX small caps to watch today

Vysarn Ltd (ASX:VYS)
Water service provider Vysarn has provided a strong guidance for FY22, with revenue predicted to come in at $44m (a 71% increase on FY21). Bottom line earnings before tax for FY22 is forecast at $4.1m (a 261% increase on FY21).

Carnavale Resources (ASX:CAV)
Carnavale has commenced a ground based MLEM (Moving Loop Electromagnetic) survey at Grey Dam in WA, aiming to delineate direct drilling targets associated with 5 nickel / copper soil anomalies identified by the earlier soil sampling program. The survey will also target one historic drillhole.

Torque Metals (ASX:TOR)
The gold explorer is also set to conduct a MLEM survey at its wholly-owned Paris Project in WA. Around 18 line-km MLEM survey is to be carried out to test potential for conductive nickel sulphides.

Helix Resources (ASX:HLX)
Assay results for three diamond drill holes at the Canbelego Joint Venture Project in Cobar, NSW have been completed. The result include 5.3 metres at 3.4% copper, and intercept of 14 metres at 4.2% copper.

Discovex Resources (ASX:DCX)
Discovex has completed a soil sampling program at the Edjudina Project in WA. The newly defined gold trend, known as the Spartan Prospect, is characterised by a 1.3km long >50ppb gold in soil anomaly with a peak value of 0.1g/t Au, within a broader 1.8km long >25ppb anomaly.