Australian shares trimmed yesterday's gains ahead of this afternoon's Reserve Bank rates decision and the resumption of trading action in the US tonight.
At 1pm EST the ASX 200 was 16 points or 0.3% weaker at 5413 as traders locked in profits from yesterday's rebound, the index's first advance in four sessions. Slender gains in energy +0.3%, consumer staples +0.2% and metals & mining +0.2% were outweighed by declines in gold -1.5%, utilities -0.8% and financials -0.4%.
Yesterday's global surge came after Friday's tepid US jobs report appeared to quash any temptation for the Federal Reserve to raise its lending rate this month. Back home, expectations were low ahead of today's RBA policy meeting and announcement, with commentators predicting the central bank will leave its key rate on hold.
“Monetary policy is going to remain easy around the world and that will continue to be supportive of risk assets,” James Woods, strategist at Rivkin Securities, told Bloomberg. "The non-farm payrolls last week indicate there’s no rush for the Fed to raise rates. The Australian central bank will probably adopt a wait-and-see attitude before lowering rates further.”
US equity futures were near neutral ahead of the resumption of trade tonight after the Labor Day long weekend. Dow futures were recently ahead eight points or 0.04%. China's Shanghai Composite was off 0.13%, Hong Kong's Hang Seng ahead 0.21% and Japan's Nikkei up 0.22%.
Crude oil futures surged 85 cents or 1.91% this morning to US$45.29 a barrel. Gold futures were $4.10 or 0.31% stronger at US$1,330.80 an ounce. The dollar was buying 76.26 US cents.
The market got a little ahead of itself yesterday without Wall Street to worry about overnight and is now falling back into line. No chance of a rate cut this afternoon, it appears. Trading: would have been nice to still hold the BBX I bought and sold yesterday - the day trader's lament. Sold 'em for a pip. Ah well. Scraped something out of SMA this morning and had a dab at NOX.
