• The ASX is expected to rise for the third straight day today
  • US CPI softened again in December
  • US stocks and bond prices rose after the CPI report

 

Aussie shares are set to rise for the third consecutive day. At 8am AEDT, the ASX 200 Jan futures contract was pointing up by 0.4%.

Overnight, Wall Street rose again by 1% following the release of CPI report which shows US inflation has cooled down for the sixth straight month in December.

The headline CPI index for December cooled from 7.1% to 6.5% as energy prices tumbled. Gasoline prices fell 9.4% on a monthly basis, declining by 1.5% from a year ago.

“Inflation isn’t broadly coming down, but it is cooling as the economy starts to feel the impact of the Fed’s earlier rate hikes,” said OANDA analyst, Edward Moya.

US bond yields sank (bond prices higher) as traders reduced bets on higher rates after the CPI report.

The futures market is currently pricing in less than 50bp of tightening in total over the next two Fed meetings (Feb and Mar).

The weekly jobless claims however spoiled the partyafter falling by just 1,000 to 205,000.

“Until we see strong signs the labor market is cooling, the Fed will keep suggesting a rate hike could be coming,” said Moya.

READ: Mission Accomplished: US inflation get’s an ass kicking, just like President George W. Bush promised

Over to Europe, where inflation expectations over the next 12 months eased for the first time since May 2022, from 5.4% to 5%.

The news will come as a relief for the ECB, but the bloc’s inflation is still a distant way from the ECB’s target rate of 2%.

In stock news, American Airlines shares rose 9% after the airline upgraded its revenue and profit estimates for Q4. Keyboard and mouse maker Logitech meanwhile fell 16% after preliminary results showed declining sales.

Crude prices extended gains after the US dollar weakened on the inflation report. The benchmark Brent crude was up 2% to US$84.02 a barrel.

Gold prices also tested the $1900 level, trading now at US$1,896 an ounce.

Bitcoin made a run towards the $18,500 after the inflation report.

“Bitcoin was unable to break the $18,500 barrier, which suggests price might remain trapped in the trading range that has been in place over the past couple of months,” said Moya.

 

5 ASX small caps to watch today

Magnum Mining (ASX:MGU)
Independently calculated Exploration Target Estimate has been derived for the Buena Vista Green Pig Iron Project. The Exploration Target Estimate is approximately 407 to 540 million tonnes at 15% to 22% iron (Fe), exclusive of the existing Indicated and Inferred Resources of 232Mt @ 18.6% Fe announced in 2021.

Everest Metals (ASX:EMC)
Drilling results highlighted extensive well developed pegmatite field. The pegmatites are highly anomalous in terms of lithium, caesium, tantalum and rubidium. EMC also said it intends to exercise its exclusive right to farm-in to earn 51% beneficial interest in the Mt Edon Project ML 59/714.

Black Cat Syndicate (ASX:BC8)
Drilling into the Gabbro Veins continues to be highly encouraging, with all holes to date intersecting quartz-sulphide (pyrite+/-chalcopyrite+/-galena) veins within altered gabbro. Visible gold has also been intersected in several holes. Assay results include: 0.92m @ 11.10g/t Au, and 0.50m @ 47.20g/t Au.

Jindalee Resources (ASX:JRL)
Jindalee announced that it has successfully completed the spin-out and IPO of Dynamic Metals (ASX:DYM). The IPO received strong support from Jindalee shareholders and new investors, with the cap raise of $7 million oversubscribed. Dynamic Metals is expected to commence trading on the ASX on Monday, 16 January.

Moab Minerals (ASX:MOM)
Assay results were received for the gold soil sampling program completed in November. Strong gold in soil anomaly was generated, which justifies follow-up sampling to define full extent. Other anomalies are to be followed-up as justified, Moab says.

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