Trader’s Diary: Everything you need to get ready for the week ahead
The ASX Emerging Companies (XEC) Index made strong gains for the second straight week – the go-getter index is up into double figures for the month-to-date, thanks largely to renewed confidence in commodities, the expectation of of higher export numbers and a momentary pause in volatile energy prices.
The previous week in the US, the Federal Open Market Committee (FOMC) delivered a 25bp rate hike, as well as, in the words of Westpac’s chief economist, Bill Evans, ‘a clear signal that balance sheet normalisation will begin in Q2.’
Evans and WBC’s senior economist Stephen Elliot now reckon the FOMC will lift the federal funds rate to a peak of 2.375% by end 2022.
A month into the Russian invasion of Ukraine and traders both on Wall Street and here at home, appear to have acclimatised to the tidal surge in volatility.
It’s not an easy wave to ride but kudos to equity traders in general last week, although, this is the scene that comes most prominently to mind:
Dead in the water a week earlier, traders certainly did well in China, but that was thanks to some rock-solid state-led market intervention.
Their property sector is still a bit of a Frankenstein’s monster, but Dr Frankenstein’s lab in Wuhan has been officially state-sanctioned and so everything should be just fine…
At home, commodity gains carried the benchmark ASX200 to 10 positive sessions out of the last 13 sessions, which in turn is boosting the AUD. Last week the Aussie dollar-buck touched near four month highs.
Globally, we saw a series of Flash PMI reads which kind of suggest economic activity still has a pulse, although the blood pressure is rising.
Manufacturing and service sector activity accelerated here at home.
Ben Udy from Capital Economics says both reads for March also added further evidence that the pace of rising prices, if anything, is accelerating.
“We think that strong inflation will convince the RBA to hike interest rates in June,” Udy says.
In the US, jumps for the services PMI and the manufacturing index both surprised consensus estimates of waning, or at least moderating economic activity.
But they’re dead wrong. Americans, like everyone at the SCG on Friday night, have had it with COVID-19 restrictions. Their cashed up, pent-up, supply chains have improved and more jobs are lifting activity.
In Europe, even though flash PMIs for the Eurozone point to a growth slowdown, it wasn’t as Dread Pirate Roberts as expected. The war on Europe’s doorstep apparently offset by the boost to demand from the Spring reopening economic thaw.
Although Japan’s composite PMI remains in contractionary, it’s at least up nicely on February.
Meanwhile, Australia put an end to exporting alumina and bauxite into Russia. Stockhead’s Emma Davies handles that beautifully here.
The screws are tightening on Chez Putin and prices appear to be rising in concert…
…though that may not bother a man who chooses to rally the people in the comfort of a 1.5 million ruble duffle coat. Around $18,000 Pacific pesos.
While russian people are fighting for food in stores, putin addressed 90000 russians wearing a Loro Piana puffer jacket for 1.5 million rubles. pic.twitter.com/PMBY1yKIWk
— Yana Morozova 🇺🇦 (@jane_in_vain) March 18, 2022
Sources: Commsec, Westpac
February retail sales
2022/23 Australian Federal Budget: (Via CBA)
February Dwelling approvals
February Private sector credit
March CoreLogic home value index
Feb housing finance
February wholesale inventories
March Dallas Fed index
January FHFA house prices
January S&P/CS home price index
March consumer confidence index
February JOLTS job openings
March ADP employment change
February PCE deflator
Initial jobless claims
March Non-farm payrolls
Markit Manufacturing PMI
February construction spending
China Manufacturing PMI
Caixin China PMI
March economic confidence
March consumer confidence
Eurozone industrial production for January and February.
EU Unemployment rate
UK Q4 GDP
EU March Markit manufacturing PMI
EU March CPI %yr
UK March Markit manufacturing PMI
Source: ASX (Pls refer to the ASX on the day…)
Far East Gold (ASX:FEG), a minerals explorer, raised $12m at 20c a share.
International Graphite Limited (ASX:IG6), a minerals exploration and development, raised $10m at 20c a share.
Lord Resources Limited (ASX:LRD), a minerals exploration and development company, raised $4.5m at 20c a share.
Top End Energy (ASX:TEE), exploring for oil, gas and other associated product streams (including helium and hydrogen), raised $6.4m at 20c a share.