• ASX set to open higher today despite rising rate risks
  • Tech leads Wall Street overnight
  • Goldman predicts US$140 oil price

Local shares are set to bounce back from yesterday’s 1.53% fall, with the ASX 200 June futures pointing up by 0.60% at 8am AEST.

Yesterday, the RBA’s decision to hike its prime rate by 50bps to 0.85% caught the market by surprise as it had expected a 25bps increase.

All rates sensitive sectors like Tech, Real Estate, and Financials fell across the board.

Experts now expect a 50bps step rise to be the norm going forward, with the RBA now seemingly intent on ‘front-loading’ the rate hikes. Another 50bps increase in July to 1.35% is already being priced into the bond market.

RBA Governor Philip Lowe referred to yesterday’s 50bps hike as “business as usual”, saying that it needed to happen because of the “resilience” of our economy and growing inflation.

“While inflation is lower than in most other advanced economies, it is higher than earlier expected,” Dr Lowe said in his monthly statement.

“Inflation is expected to increase further, but then decline back towards the 2 per cent to 3 per cent range next year.

“Today’s increase in interest rates will assist with the return of inflation to target over time,” he said.

On Wall Street overnight, US stocks rose with Tech leading the way. All three major US stock indexes climbed by around 1% each.

Shares in Apple rose 2% as the company unveiled the latest releases of its iPhone, MacBook and iOS 16. Retailer Target fell 2% and dragged the sector down for the whole day after a disappointing margin forecast.

Meanwhile, Goldman Sachs predicts a US$140 oil price between July and September, up from its prior call of US$125 a barrel.

“A large spike in prices remains quite possible this summer,” said the Goldman Sachs note to clients.

Brent crude is currently trading at US$120.70 a barrel.

5 ASX small caps to watch today

Delta Drone (ASX:DLT)
Delta Drone has signed a three-year contract with the subsidiary of ASX-listed Red 5 (ASX:RED) for drone surveying services at the King of the Hills Mine and Darlot Mine. The contract is for three years, and has a Total Contract Value (TCV) of $1.01m, and Annual Recurring Revenue (ARR) of $336k (billed monthly).

Enero Group (ASX:EGG)
The marketing tech company says its full year FY22 net revenue will come in between $192 million and $193 million, representing 20% year-on-year growth. Operating EBITDA (excluding significant items) will be between $61 million and $62 million, representing 34%-36% year-on-year growth.

Zelira Therapeutics (ASX:ZLD)
The cannabis company says results of longitudinal, real-world data (RWD) from 94 patients using ZENIVOL supports its effectiveness as a therapeutic option to manage chronic insomnia symptoms. In the study, ZENIVOL reduced the Insomnia Severity Index (ISI) scores from 19.5 (Moderate clinical insomnia) to 14.3 (Subthreshold insomnia).

Rare Foods Australia (ASX:RFA)
Rare Foods says it has achieved certification with the Marine Stewardship Council (MSC) as a fully accredited and internationally recognised Wild Enhanced and Sustainable Fishery for greenlip abalone. The company says it is the only wild enhanced fishery in the world using sustainable practices to commercially produce greenlip abalone. The MSC standard meanwhile, is the world’s most widely recognised standard for seafood sustainability.

Akora Resources (ASX:AKO)
Akora’s Madagascar-based Bekisopa Southwest Tenements, Satrokala, has delivered encouraging high-grade iron rock chip assays along a 10km strike length. Highlights include 68.03% Fe for the highest-grade rock chips assayed, and 58.8% Fe average grade from the 102 rock chip samples.