Trader’s Diary: Everything you need to get ready for the week ahead
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Last week’s headlines include the Q1 US GDP, which contracted at an annual rate of 1.6% and was worse than the consensus of -1.5%.
Another negative print next month would fit the technical definition of a recession.
“I think it’s [a recession] going to happen, but the more important question is how do consumers feel; are they willing to spend?” says Michael Bright, Structure Finance Association CEO, told Fox.
“Or are they hunkering down because they’re afraid of where the economy is going?” he added.
Either way, it looks certain the Fed is just getting started in raising rates.
Loretta Mester, a voting member of the US FOMC, said July’s Fed meeting will likely involve a debate among FOMC policymakers over whether to go for 50 or 75 basis points.
“If conditions were exactly the way they were today going into that meeting — if the meeting were today — I would be advocating for 75 because I haven’t seen the kind of numbers on the inflation side that I need to see in order to think that we can go back to a 50 increase,” Mester told CNBC.
Back home, the RBA’s board will meet and make its rates decision on Tuesday.
In the last meeting in June, the RBA raised its cash rate by 50bp to 0.85%, and conceded that Australia’s inflation will spike to 7% by end of the year.
“We are now expecting inflation to peak at around 7 per cent in the December quarter. Following this, by early next year, we expect that inflation will begin to decline,” RBA governor Philip Lowe said.
Experts believe it will be a difficult juggling act for the RBA – as it will have to contend with rising commodity and food prices on one hand, and falling house prices on the other.
Friday’s CoreLogic data showed that home prices across Australia fell by 0.6% in June, led by declines in big cities like Sydney (-1.6%), Melbourne (-1.1%), and Hobart (-0.2%).
Gareth Aird, head of Australian economics at CBA said: “The trend is now established and price falls will accelerate as the RBA continues to raise rates, which is widely expected.”
“Based on our forecast profile for the cash rate, we expect home price falls nationally of around ~15% over the next 18 months.”
This week’s economic calendar will be headlined by the RBA interest rates decision on Tuesday.
MI inflation gauge
ANZ job advertisements
RBA interest rates decision
Trade balance for May
Eurozone Sentix consumer confidence
Eurozone producers price index (PPI)
US factory orders
China PMi index
Eurozone retail sales
US mortgage markets
US crude oil stock
FOMC meeting minutes
ECB publishes meeting minutes
US exports and imports
US initial jobless claims
US natural gas storage
US gasoline production
China FX reserves
US non-farm payrolls
US unemployment rate for June
According to the ASX and Stockhead’s own Nadine McGrath, these stocks will make their debut listing this week (subject to change without notice)
Listing: 6 July
IPO: $5.5m at $0.20
The company is proposing to acquire the tenements comprising the Kookynie (Niagara) Gold Project in Western Australia from GTI Resources (ASX:GTR).
“It is exciting for the company to have secured tenements containing historical high-grade workings, identified mineralisation and high priority, walk-up targets whilst in the company of peers that are actively finding encouraging results,” chairman Robert Boston says.
The company plans to kick off maiden exploration and apply modern techniques to the “historically significant, underexplored tenement package”.
Listed: July 6
IPO: $7m at $0.20
The company has a portfolio of lithium, tin, tantalum, manganese, copper, gold and base metal exploration projects in WA and the NT.
Its assets include the Woodie Woodie North project and the Upper Coondina project in WA.
In NT, it holds the Edwards Creek project, the Box Hole project and the Bruce project.
Listing: 7 July
IPO: $7m at $0.20
AEN plans to explore and develop the ‘Treasure’ (Black Pine) Project, in the Republic of Cyprus, which has numerous occurrences of high-grade nickel, copper, gold and cobalt in sulphides associated with a major transform fault. There is also evidence of past mining activity with multiple underground adits and shafts.
AEN says Cyprus was historically a major producer of copper and is well placed to supply the European electric vehicle market with copper, nickel and cobalt, along with gold.