• Wall Street closed for labour day, but European shares closed lower
  • The RBA is set to hand down its rates decision today
  • What the RBA decision will mean for homeowners


Australian shares are set to open lower on Tuesday as the US markets closed for Labor Day overnight. At 8am AEST, the ASX 200 index futures was pointing down by -0.25%.

In Europe, stocks closed higher on optimism that China’s stimulus measures could prop up its ailing economy. China-related sectors like iron ore mining and travel rose in European markets.

Europe’s technology sector also gained, with Dutch semiconductor equipment maker ASML up by 0.3%.

This is despite news that China’s Huawei and top chipmaker SMIC have built an advanced 7-nanometer processor to power Huawei’s latest smartphone, potentially thwarting a US blockade on chips export.

Danish drugmaker Novo Nordisk rose to an all-time high after launching its weight-loss injection Wegovy in Britain. And Mercedes Benz added 1% after unveiling a new, longer-range electric vehicle.

Meanwhile, ECB’s president Christine Lagarde declined to reveal the ECB’s next move as she delivered a speech in London.

“Actions speak louder than words,” Lagarde told the European Economics & Financial Centre seminar.

Back home, the RBA will hold its board meeting today and announce the rates decision at 2.30pm AEST. It will be Philip Lowe’s last meeting as Governor.

“We believe the RBA will remain on pause,” says Scott Solomon, co-portfolio manager at T. Rowe Price.

“While services inflation remains high, there was little in August data that signals progress is not being made on the inflation front, or to suggest a reheating of the Australian economy.”


What RBA decision today will mean for homeowners

Lance Goodman, co-founder and co-CEO of personal finance marketplace Compare Club, says the RBA’s decision today will have a big impact on Aussie mortgage borrowers.

If the RBA hikes today, Australians will be feeling more financial pain.

“Our analysis suggests that the average homeowner will be paying an additional $92 a month on their mortgage. For the average homeowner who has a rate above 6.5%, they’re now paying over $4000 a month on repayments,” says Goodman.

“For some households, this will be over half of their monthly salary, and with the rise in other costs such as insurance premiums, groceries and energy bills, it doesn’t take much to see how squeezed these already put-upon households are.”

Even if the RBA pauses, Goodman says there are still other rising costs to worry about.

“They have costs such as energy bills to contend with. There may well be another one or two rate rises this year, so it’s never been more important for homeowners to get on top of all their expenses, not just their home loan.”

But Goodman says there is one silver lining for homeowners.

“Property prices are continuing to rise again, and that means some mortgage holders who were struggling to refinance because their loan-to-value ratio (LVR) was so high may be able to get a much better rate than they could access a few months ago.”


In other markets …

Gold traded flat at US$1,938.70 an ounce.

Oil prices lifted around +0.4% and remained at the highest level in seven months with WTI trading now at US$85.86a barrel.

Crude has been rising for the past week on China stimulus and on speculations that Saudi Arabia might extend their daily oil production cuts through next month.

Iron Ore 62% fe remained elevated at US$118.19/tonne after China’s move to adjust mortgage policy to prop up its debt-laden property sector.

The Aussie dollar rose around 0.5% to at US64.64c.

Bitcoin meanwhile dropped -1% in the last 24 hours to US$25,726.

In a note to investors, JP Morgan says the US SEC will likely be forced to approve multiple spot Bitcoin ETFs, following the Grayscale victory in court last week.

“That could be beneficial for investors as it would allow for more competition in terms of ETF fees,” said JP.


5 ASX small caps to watch today

Musgrave Minerals (ASX:MGV)
Assay results have been received from the final batches of RC grade control drilling on the Twilight and Velvet Lodes at Break of Day and at the White Heat deposit. Highlights at Break of Day include 18m (9m ETW) @ 71.0g/t Au from 7m. Highlights at White Heat include 3m (2.4m ETW) @ 378.0g/t Au from 12m.

Lithium Energy (ASX:LEL)
Scoping study work completed to date has confirmed the suitability of conventional solar pond evaporation as a development pathway for the Solaroz Lithium Brine Project. The study also indicates the Solaroz Project is suitable for Direct Lithium Extraction (DLE), providing the company with the significant benefit of having multiple potential development pathways.The release of full Scoping Study results including production targets and economics is targeted for early Q4 2023.

Midas Minerals (ASX:MM1)
Midas has received a further 77 assay results from its Yellowknife Lithium Project in Canada. Around 60% of recently reported assays show strong fractionation of sampled pegmatites. Midas is now awaiting results from additional 154 samples from recent sampling. Exploration is currently paused due to a fire evacuation order for the City of Yellowknife, but will recommence after reoccupation of the city.

Tambourah Metals (ASX:TMB)
Tambourah has completed first pass sampling of 18 rock chips at Shaw River Lithium-Tin-Tantalum ( Li-Sn-Ta) project. The pegmatites and dumps that were sampled produced elevated tin, and the rock chips confirmed pegmatites with up to 180ppm of lithium (Sample Rk790). Reconnaissance sampling and mapping is underway at several locations, with outcropping pegmatites and a proposed drill program to follow.

Black Canyon (ASX:BCA)
BCA has advanced a flowsheet design to produce High Purity Manganese Sulphate Monohydrate (HPMSM) suitable for the manufacture of cathode precursor used in lithium-ion batteries. Hydrometallurgical testwork on manganese oxide samples is continuing, while acid leach tests have yielded excellent results with up to 99% extraction rates from samples gathered from KR1, Balfour East, Pickering and Damsite prospects.


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