Market Highlights: Binance suspends USD withdrawal, RBA decision, and 5 ASX small caps to watch
The ASX is set to open flat on Tuesday ahead of the Reserve Bank’s interest rates decision at 2.30pm AEDT today.
Overnight, Wall Street was off to a difficult start on Monday, weighed down by the prospect of more rate hikes and tensions between the US and China over the balloon incident.
The S&P 500 closed 0.60% lower, while the tech-heavy Nasdaq was down by 1%.
Although the S&P 500 index is up by 7.5% and Nasdaq by 14.5% this year, the combination of stubborn inflation, more hikes, and a disappointing earnings season are potential catalysts for a downturn in the market.
“The good news is that there’s plenty more data to come before the next Fed meeting that could soothe some of those concerns, and so there’s plenty more time for investors to pick themselves back up,” said OANDA analyst, Craig Erlam.
Back in Australia, the RBA will make its rates decision later today.
A 25-basis point hike is almost a certainty, following Q4’s hot CPI print which saw the inflation rate jump to the highest levels since the 1990s.
However, signs of weakness in the local economy suggest that the RBA is nearing the peak of this hiking cycle, and may hike just one more time after this meeting, which would bring the official cash rate to a peak of 3.6%.
“Rate cuts remain a distinct possibility in the tail end of this year given the growing prospect of a recession in Australia,” said Daniel Moss, a market analyst at Vantage Markets.
Currency traders have positioned their bets ahead of the announcement, with the AUD shaving almost a quarter per cent to US68.8c.
In other news, aluminium prices were down 1% as the US prepares to slap a 200% tariff on Russian-made imports to keep pressure on Moscow as the one-year anniversary of the Ukraine invasion nears.
Microsoft has announced a surprise in-person event tomorrow where it’s expected to announce and demo its Bing ChatGPT integration.
Gold has been left licking its wounds after sliding almost 5% from its highs towards the end of last week. Right now, it’s trading at US$1,866.45 an ounce.
“The yellow metal was already looking quite overbought and was struggling for momentum on its most recent surge and so was potentially primed for a correction, but the US data certainly finished the job,” said Erlam.
Bitcoin meanwhile was up half a per cent in the last 24 hours to US$23,012.
Crypto exchange Binance is reportedly suspending USD deposits and withdrawals starting on Feb 8.
There is currently no clear reason given behind the suspension, but Binance has reassured customers that:
“All other methods of buying and selling crypto remain unaffected, including bank transfers using one of the other fiat currencies supported by Binance (including Euros), buying and selling crypto via credit card, debit card, Google Pay and Apple Pay, and via our Binance P2P marketplace.”
Looking ahead at the ASX session today, we expect to see the RBA decision and the release of Australia’s trade balance data.
The utilities data company reported Q3 FY23 revenue of ~$7.9m, up 88% vs pcp. Q3 recurring subscription revenue was ~$7.2m, up 121% vs pcp. New contracts closed in Q3 was $7.3m, while total cash and receivables as at 31 December was $23.5m, with no debt.
Charger Metals (ASX:CHR)
Charger has signed a binding agreement with Lithium Australia (ASX:LIT) to buy its 30% minority interest in the Lake Johnston Lithium Joint Venture, taking Charger’s stake to 100%. This transaction further complements Charger’s recent consolidation in the Lake Johnston greenstone belt. Charger has now completed 27 of the planned 40 reverse circulation drill holes at the Medcalf spodumene discovery, which commenced in late 2022. Drilling is continuing.
Aerison Group (ASX:AE1)
The engineering company has been awarded several new projects with a combined value of $100m. These projects have increased Aerison’s exposure to key Australian growth markets including rare earths, agriculture, green energy and chemical sectors. The company says its pipeline of opportunities continues to track above $5 billion.
Openn Negotiation (ASX:OPN)
OPN has entered into commercial arrangements with CoreLogic, a leading provider of online property information and analytic services for the ANZ property markets. The deal will see a pilot program designed to integrate Openn’s proprietary software into CoreLogic’s website, which attracts 4 million visitors per month. OPN says this collaboration will drive Openn’s revenues and accelerate the pathway towards stated goal of 5% market share of the total addressable housing market in the ANZ.
The luxury brands online retailer reported a 65% increase in revenue vs pcp in the half-year to $187.69m. NPAT for the half was $8.02m vs a loss of $8.3m in the pcp. This bottom line surge was driven primarily by the growth in gross profit and a moderation in marketing expenses. There were no dividends paid or declared for the half.