• The ASX is set to open flat this morning
  • Wall Street closed for Independence Day, European stock markets mixed
  • RBA is expected to raise interest rates at 2.30pm AEST today

The ASX 200 is set to open flat today as Wall Street closed for Independence Day.

European sharemarkets were mixed overnight with pan-European STOXX 600 rising by 0.5%, the FTSE-100 up by 0.90%, and the German Dax falling by 0.30%.

A Sentix survey revealed that investor morale in the Euro zone fell to its lowest level since May 2020 as recession fears gripped the bloc.

European investors will be closely watching the minutes of the ECB’s June meeting on Thursday, which could provide clues to the central bank’s train of thought in raising rates to control runaway inflation.

At 2.30pm AEST today, the RBA will also dish out its own rate hike, expected to be another 50bps. This will take our cash rate to 1.35%.

“The RBA has joined the central bank pivot to more front-end loaded tightening, with the Governor signalling that accommodative conditions were no longer required and to expect further tightening,” said Frank Uhlenbruch, investment strategist in the Janus Henderson Australian Fixed Interest team.

“By how much and the impact of higher rates on the economy remains an open question,” he said.

The RBA has already signalled the cash rate will rise to around 2.5% by December, while the market has priced in a terminal rate of 4.2% by mid-2023.

“Our base case view is for the cash rate to lift by 50bps at the July and August meetings, before tightening increments return to ‘business as usual’ 25bps increments,” said Uhlenbruch.

The markets will also be watching the US unemployment rate data on Friday (US time), a crucial data input for the US Fed’s next monetary meeting on the 26th.

5 ASX small caps to watch today

Good Drinks (ASX:GDA)
The brewery says it has now formally commenced the Australian distribution of the Miller Chill, Miller Genuine Draught, Coors, Molson Canadian and Magners brands. These brands are expected to add $35m-$40m to revenue, and $3m-$4m to FY23 EBITDA.

SenSen Networks (ASX:SEN)
SenSen has achieved another record monthly sales cash inflow in June of ~$1.8 million, following record monthly sales cash inflows in May of ~$1.1 million. The company has also won multiple new customers globally over the last month across all target business verticals – Smart Cities, Casinos, Fuel Retail and Surveillance.

Australian Gold and Copper (ASX:AGC)
New near surface gold (Au) assays have been returned from a 23-hole RC program (2,370m) at the Boxdale gold-arsenic-sulfide trend, up to 8.9g/t Au. Results include 14m at 0.46g/t Au, and 12m at 0.62g/t Au from 18m.

SRG Global (ASX:SRG)
SRG Global has been awarded a five-year term contract with Iron Bridge Operations, and a multi-disciplinary maintenance contract with Visy Industries Australia. The combined value of the contracts is ~$100m commencing immediately.

Victory Goldfields (ASX: 1VG)
Recent aircore (AC) drilling program at the company’s North Stanmore and Mafeking project has identified a significant gold anomaly. Victory is now planning further follow up RC drilling to determine if the quartz vein-hosted gold mineralisation identified in the air core drilling persists at depth.