• The ASX 200 is expected to rise today
  • Wall Street gains as the US FOMC meeting minutes for June are released
  • Australia’s trade balance data out later today

Local shares are set to rebound today, with the ASX 200 July futures already suggesting that the bourse will open higher by 1% this morning.

Overnight, Wall Street gained as investors weighed the US Fed minutes with a further drop in oil prices.

All three major US stock market indices –  the S&P 500, Dow Jones and Nasdaq – were up by 0.30% each.

According to the minutes for the FOMC meeting held in June, Fed members believed that rates should be increased by 50bp or 75bp at the next board meeting on July 26.

Prior to the minutes’ publication, investors had mostly priced in a 75bps rate hike.

The minutes also suggested that FOMC members were concerned the public might have a perception the Fed wasn’t doing all it can to combat inflation.

“Many participants judged that a significant risk now facing the Committee was that elevated inflation could become entrenched if the public began to question the resolve of the Committee to adjust the stance of policy as warranted,” the minutes stated.

Meanwhile, oil prices tumbled by another 2-3% last night, with Brent crude now trading at a three-month low of US$99.83 a barrel.

Rising fears about a possible recession has been the primary driver of this latest sell-off.

“Although I acknowledge recession risks in the US, and Covid zero ones in China, the world’s two largest consumers, the futures markets in both Brent crude and WTI remain in heavy backwardation,” said Oanda market analyst, Jeff Halley.

“That says that in the physical market, supplies remained as constrained as ever, and despite the noise seen overnight, oil prices may be in danger of overshooting to the downside,” he added.

A rebound in China may also curb some of the downside move in oil.

Later today, the ABS will release Australia’s trade balance data, while in the US, the GDP data is due later tonight and unemployment rate on Friday (US time).

5 ASX small caps to watch today

Sovereign Metals (ASX:SVM)
Sovereign has signed a a non-binding MoU with Japanese trading giant Mitsui for a marketing alliance and offtake deal on 30,000 tonnes of natural rutile per annum from the Sovereign’s Kasiya Rutile Project in Malawi. Sovereign says that Asian titanium metal producers have confirmed the suitability of the Kasiya rutile product.

Genmin (ASX:GEN)
Genmin has granted Anglo American a royalty and an exclusive right to negotiate terms for up to US$75m in financing, and up to 100% of offtake from Baniaka, for an immediate cash payment of US$10m. Royalty is payable on the first 75 million tonnes of iron ore products sold from Baniaka.

Jayride Group (ASX:JAY)
The airport transfers marketplace saw record-high passenger trips booked at 136,000 in Q4 FY22, up 81% vs Q3, and a growth of 190% vs Q4 FY21. Full-year FY22 net revenue grew to $2.56 million, up +237% vs FY21.

The Hydration Pharma (ASX:HPC)
The Hydralyte specialist has reported record monthly sales in June, underpinning the company’s largest ever quarterly sales period. Its Q2 FY22 net sales was US$2m, highlighting a 42% rise on the prior corresponding period (pcp).

Argenica Therapeutics (ASX:AGN)
The brain focused biotech announced a number of encouraging findings from a peer reviewed published study assessing the safety of its lead drug, ARG-007. The study indicates that ARG-007, over a wide range of concentrations, is unlikely to induce a mast cell anaphylactoid-mediated reaction (allergic reactions) if administered to patients.


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