Thanks Brit and morning crew. Half-time round-up: Shares hit a...

Thanks Brit and morning crew.


Half-time round-up:

Shares hit a four-month high ahead of this afternoon's RBA rate decision and tonight's federal budget before paring gains as Chinese factory activity missed expectations.

At 1pm EST the ASX 200 was 40 points or 0.8% ahead at 5283 after earlier faltering within two points of 5300, the index's highest point since early January. The financials sector led the rally, rebounding 1.85% from yesterday's sharp sell-off despite an initially negative reaction to half-year results from ANZ. Shares in ANZ were last up 4.4% after opening more than 4% lower.

Other pockets of strength included health +1.1%, industrials +0.9% and utilities +0.9%. News that a private measure of Chinese factory activity deteriorated last month helped drag the energy sector down 2.1% and metals & mining 1.4%. Caixin's final manufacturing PMI for April declined to 49.4 from a February reading of 49.7. Economists had anticipated a modest rise to 49.8.

The dollar edged higher to 77.04 US cents ahead of a 2.30pm cash rate decision and policy statement from the Reserve Bank. The odds on a cut drifted to 48% this morning from 54% yesterday.

“Other than just the rate decision, there are a lot of questions regarding what the RBA will say,” Prashant Newnaha, rates strategist at TD Securities in Singapore, told Bloomberg. “Last week’s CPI [inflation] miss has contributed to the rise in Aussie volatility. If the RBA cuts, the Aussie will come under considerable pressure.”

Asian markets were mixed. China's Shanghai Composite improved 1.2% and Hong Kong's Hang Seng fell by the same percentage. Trading on Japan's Nikkei was suspended for a public holiday. S&P 500 futures were recently a quarter of a point or 0.01% weaker.

Crude oil futures rallied 27  cents or 0.6% this morning to US$45.05 a barrel. Gold futures were $1.10 or 0.08% stronger at US$1,296.90 an ounce.


Market looks keen to go on with it. ANZ's sins were quickly forgiven and everyone piled into the banks. Market looks primed for lift-off if the RBA cuts. Big if. Trading: plenty of volatility. I took SGQ at 18.5c and SGH at 49c.