• Tesla surged 7% after delivering record number of cars in Q2
  • Aussie shares to open flat ahead of RBA rates meeting
  • Analysts disagree on whether the RBA will hike 25bp today


Aussie shares are set to open little changed on Tuesday ahead of the RBA interest rates decision later today.

Overnight, Wall Street gained about 0.1-0.2% % in a shortened session on the eve of the 4th July Independence Day holiday.

Tesla surged 7% after delivering a record number of cars (466,140 units) in the second half, better than what analysts expected. The company will report its financial results for Q2 on 19 July.

Tesla’s surge boosted US battery maker stocks, as well as rival Rivian, which climbed 17.4%.

It’s been a good run for EV makers globally, with Chinese EV maker BYD also posting robust sales in China, topping Volkswagen for the first time.

BYD is currently deploying an engineering team to Chile, which has the world’s biggest reserves of lithium, with plans to build a US$290 million lithium cathode factory in northern Chile.

On the economic data front, investors brushed off reports on cooling growth and a slowdown in manufacturing, with the US factory activity (PMI) falling to its weakest level in more than three years.


RBA preview

Persistent core inflation is keeping central banks guessing and became the biggest worry for markets in June.

In what was a self-declared close call, the RBA opted to raise the cash rate by another 25bp in June to 4.10%. The Aussie job market meanwhile has remained resilient, with the unemployment rate at 3.6%.

Emma Lawson, fixed interest strategist at Janus Henderson, sees the market pricing at least one more rate increase, with the chance of another as reasonable.

“We have a modest tilt to the higher case of a peak in the cash rate of 5.10%, if services inflation persists,” said Lawson.

Rabobank maintains its call on a terminal cash rate of 4.35%, while Bank of America expects the RBA to keep rates unchanged at 4.10%.

“But we see scope for another 25bp hike in August to take the rate to 4.35 per cent,” said the note from Bank of America.

TD Securities meanwhile expects the RBA to hike by 25bps today, citing a tight labour market in Australia.

The RBA will announced its decision at 2.30pm AEST.


In other markets …

Crude oil prices fell -0.75%, with WTI trading at US$70.10 a barrel.

“The global growth outlook won’t be improving anytime soon, but the US and China outlooks should remain upbeat for the next few months,” said Oanda analyst, Edward Moya.

Gold ticked modestly higher by 0.1% to US$1,921.45 an ounce.

Bullion prices are steadying following disappointing global PMI data, and on expectations the US economic outlook could start to deteriorate more quickly.

Meanwhile, Bitcoin has lifted by 1.6% in the last 24 hours to US$31,051.

According to a leak reported by the Wall St Journal, the SEC has notified the Nasdaq exchange and the Chicago Board Options Exchange (CBOE) that recent filings by BlackRock and Fidelity for  spot Bitcoin ETFs are not “sufficiently clear and comprehensive”.

The regulator has apparently instructed those asset managers to refile the applications with the correct data.


5 ASX small caps to watch today

Biome Australia (ASX:BIO)
Biome reported full year sales revenue of ~$7.23 million, and Q4 unaudited sales revenue of ~$2 million. These results represent an annual growth of 75% compared to FY22 audited sales revenue, and an annualised run rate of $8m based on Q4 FY23.

Clarity Pharmaceuticals (ASX:CU6)
Clarity has received positive guidance from the US FDA on 64Cu SAR-bisPSMA Phase III trial in prostate cancer. The FDA is supportive of Clarity’s Phase III diagnostic clinical trial of 64Cu SAR-bisPSMA PET in 383 participants. The trial is now expected to commence in late 2023.

SIPA Resources (ASX:SRI)
Rare earth elements (REEs) have been identified in historic drill assays in close proximity to the Cummins Range REE and phosphate deposit in northern WA. Additional work will now be undertaken to identify REE drill targets alongside the ongoing focus on the base metal potential. The project lies in a prospective location, within 8km of the nearby Cummins Range REE and phosphate deposit held by Rare-X.

Lincoln Minerals (ASX:LML)
Lincoln says it has discovered new graphite mineralisation at Kookaburra Gully Project, SA. Significant results from the program include: 7m @ 6.25% TGC from 44m including 2m @ 10.48% TGC from 44m. Lincoln will use results from KGE to update the Kookaburra Gully Project’s overall graphite inventory, and is updating the 2017 Mining Feasibility Study for Kookaburra Gully Graphite Project.

Cygnus Metals (ASX:CY5)
Dozens of pegmatite targets identified ahead of a maiden field campaign. Sakami is located just 44km along strike from Patriot Battery Metals’ Corvette Project. Geophysical surveys and fieldwork are now scheduled to commence in August.