• Aussie shares set to extend gains on Thursday
  • Wall Street pared gains after Fed minutes release
  • China to partially lift ban on Aussie coal


Aussie shares are set to open higher on Thursday, tracking the rally in New York. At 8am AEDT, the ASX 200 Jan futures contract was pointing up by 0.40%.

Wall Street pared early gains after the release of the Fed meeting minutes for Dec 13-14th, which revealed that policymakers were willing to keep rates high for some time to tame inflation.

After the release, both the S&P 500 and Nasdaq reduced their early gains to 0.7%, while the Dow closed just 0.40% higher.

According to the minutes, Fed policymakers were worried about any “misperception” in the markets that their commitment to fighting inflation was flagging.

“A number of participants emphasised that it would be important to clearly communicate that a slowing in the pace of rate increases was not an indication of any weakening of the Committee’s resolve to achieve its price stability goal,” said the minutes.

However, policymakers acknowledged that they now needed to balance fighting inflation with the risks of a slowing economy.

Importantly, 17 of 19 officials projected the cash rate to rise at or above 5.1% this year (currently at 4.25%).

Some analysts see these minutes as proof the Fed was still in a highly hawkish mode.

“It appears that officials remain hawkish and are especially concerned about the tight labor market,” said consulting firm deVere’s CEO, Nigel Green.

“We expect that the latest minutes will give the central bank further support to maintain interest rates higher for longer than had been previously priced-in by the markets.”

However there were some good news on the jobs front. The US JOLTS data released overnight showed that 10.46 million jobs were available in November, indicating that the labor market remains robust.

In other markets, the Aussie dollar surged by almost 2% to US68.7c on news that China was discussing plans to resume some imports of Australian coal.

The Chinese government had studied a potential easing of the restrictions on Australian coal from as early as last July.

But analysts are not overly excited about this development.

“As far as actual trade flows, a big yawn,” said Tim Baker, head of macro research at Deutsche Bank AG in Sydney.

“Aussie coal exports have been exceptionally strong despite China not taking any.”

Oil prices have tumbled again on uncertain near-term economic prospects for China amid surging Covid cases. Brent crude slumped by over 5% to US$77.90 a barrel.

There isn’t much to add on the Bitcoin front as it remains in consolidation. BTC was up 1% in the last 24 hours to US$16,830.


5 ASX small caps to watch today

Native Mineral Resoources (ASX:NMR)
Assays from the second diamond drill hole at Maneater Hill reinforces the interpretation of a significant gold target at depth. Best results from diamond drill hole MPD003 include: 1m intervals recording grades up to 2.8% Zn, 0.19% Sb, 59.4g/t Ag, 0.72% Pb.

Euro Manganese (ASX:EMN)
EMN has submitted the final Environmental and Social Impact Assessment (ESIA) for the company’s Chvaletice Manganese Project to the Ministry of Environment in the Czech Republic, and it has published its inaugural 2022 Sustainability Report. EMN says the Project is poised to become Europe’s only primary producer of high-purity manganese products with excellent ESG credentials, serving the rapid growth of the EV battery market.

Proteomics (ASX:PIQ)
Proteomics has extended the term of its letter of intent (LOI) with Sonic Healthcare USA, a division of Sonic Healthcare (ASX: SHL), until 31st January 2023. The agreement is for an exclusive licence agreement for the use of Proteomics’ PromarkerD predictive test for diabetic kidney disease in the US by Sonic Healthcare USA.

Pure Resources (ASX:PR1)
Multiple new outcropping pegmatite occurrences at the Quebec’s Laforge Lithium Project were observed, with 3 samples containing visual spodumene which fluoresced under ultraviolet light. Pure says further investigation is ongoing, and assays to fully evaluate the extent and tenor of possible lithium mineralisation are expected in 8 weeks.

Traka Resources (ASX:TKL)
Traka has entered into an At-The-Market (ATM) subscription facility with Dolphin Corporate Investments to provide the company with up to $3 million of standby equity capital over the next 3 years. The facility provides Traka with significant flexibility to support the exploration activities at its Mt Cattlin Gold Copper Project, as well as additional working capital.