Traders’ Diary: Everything you need to get ready for the week ahead
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While the market closed in the green on Friday – the ASX 200 gained 2% for the week – the benchmark still closed many many moons from last year’s strength.
Market volatility remains the watchword. Inflation and the fight against it is the Western Front.
The Reserve Bank of Australia delivered a third consecutive interest rate increase at their July meeting.
As largely expected, the RBA bumped the cash rate ahead by 50bps to 1.35%.
Westpac’s Bill Evans says that’s “still below neutral” and the WBC team appear unhappy with the bank’s approach last Tuesday.
“At this level, rates are still too low in an environment of high inflation and the tightest labour market in 50 years. Informed by this, we expect the RBA to deliver a third back-to-back 50bp rate hike in August, taking the cash rate to 1.85%,” he said.
The British Pound vs the USD dropped under 1.2000 after the UK PM Boris Johnson resigned, Friday morning (but intends to stay in Downing Street as a caretaker PM. Forever.)
The Japanese Yen vs the USD fell sharply on the Friday afternoon shock that former PM Shinzo Abe was fatally shot.
Japan’s current account surplus narrowed to a seven-year low of ¥10.1 trillion in the 12 months to May. But according to CBA’s senior currency strategist Elias Haddad, at circa 2% of GDP, Japan’s meek surplus is yen supportive in periods of rising risk aversion.
Those resources ended a crazy week for local commodities with a surge on the back of a potential Chinese stimulus plan which Bloomberg says the world’s second largest economy would put into the hands of local government – talking up a possible $300 billion (and largely familiar) infrastructure spend to help support an ailing and zero-COVID thwacked economy.
The largely discarded and unloved Buy Now Pay Later names, bleeding out in an unregarded corner of the faltering tech sector reawakened during the week and into the weekend, despite the ridiculous business model and a slight rise in bond yields.
On the local bourse, James Gerrish from Market Matters noted telecommunications were the worst off as investors preferred the risk-on trade, however, it was the financials that held the index back the most.
Stateside, US stocks recovered from midweek losses after a decent jobs report, easing traders’ entrenched inflation anxieties and even curbing a little of the talk of America’s looming recession.
The first week of the new year tech-heavy NASDAQ posted its longest winning streak of 2022 in the process but the 2- and 10-year yield curves remained inverted for the fourth consecutive day which is regarded by many as the best leading indicator of a recession – one to watch.
The SPI Futures closed firm, pointing to a 20-point gain on Monday which would take the ASX 200 back to 6700.
CBA Household Spending, June
NAB Business Business, June
New Zealand RBNZ Meeting
Westpac Consumer Confidence Index, July
Australia Consumer Inflation Expectations, July
Trade balance for May
ABS Full Employment Change and June Participation Rate
Japan BOJ Governor Kuroda
United States Fed’s Williams Takes Part in Discussion on Libor Transition
UK BRC Sales Like-For-Like for June
Germany ZEW Survey Expectations, July
US NFIB Small Business Optimism, June
EU ECB’s Villeroy speaks
US Fed’s Barkin Discusses the `Recession Question’
UK BoE Governor Bailey
China Trade Balance Jun
UK Monthly GDP May
EUIndustrial Production May
US CPI June
US Federal Reserve Beige Book
Canada BoC Meeting, Monetary Policy Report
BoC Governor Macklem speaks post-decision
EU ECB’s Centeno Speaks at Parliamentary Hearing in Lisbon
Sweden CPI June
US PPI June
US Fed’s Waller Discusses the Economic Outlook
China New Home Prices & Residential Property Sales
China Industrial Production, Retail Sales & Fixed Asset Investment, June
China GDP 2Q
Bank of Korea Interest rate decision
EU Trade Balance for May
Finland ECB’s Rehn speaks
US Empire Manufacturing July
US Retail Sales Advanced for June
US Import & Export Price Indexes, June
US Fed’s Bostic Discusses Monetary Policy
US Industrial Production Jun
US Uni of Michigan Sentiment for July
Source: CBA, investingdotcom
According to the ASX these stocks will make their debut listing this month (subject to change without notice)
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.
Listing: 20 July
IPO: $8m at $0.20
The copper explorer has tenements in the prospective North West minerals province of QLD – adjacent to the world-class Mt Isa mines.
The company is embarking on an aggressive drill program with target testing underway.
Listing: 26 July
IPO: $7.5m at $0.35
This Australian-based holding company, through its subsidiaries, operates a glass production and supply business for structural building facades.
The group has a fully automated processing plant which it says is highly efficient, accurate and scalable and an R&D focus on the development of cyclone resistant glass using new laminating and bonding techniques.