Thanks Brit and morning regulars. Half-time round-up: The share...

Thanks Brit and morning regulars.


Half-time round-up:

The share market hit its second-lowest level in three months this morning before paring losses after the Reserve Bank indicated it remains open to further rate cuts.

At lunchtime the ASX 200 was 12 points or 0.2% lower at 5649 after earlier touching a two-week low at 5611. Yield sectors led the turnaround after the minutes from this month's RBA policy meeting showed the central bank will consider cutting the cash rate again if required. Health stocks rallied 0.8%, telecoms 0.3% and financials 0.1%, tempering weakness in metals & mining -0.7% and industrials -0.6%.

The RBA minutes indicated the bank deliberately removed any reference to an "easing bias" in its policy guidance, but "Members did not see this as limiting the board's scope for any action that might be appropriate at future meetings". The bank cut the cash rate to a record low of 2% earlier this month.

The mood across regional markets was brighter after the S&P 500 recorded a third straight record close overnight. China's Shanghai Composite put on 2.25%, Hong Kong's Hang Seng 0.28% and Japan's Nikkei 0.73%. Dow futures were recently ahead by 20 points or more than 0.1%.

“Patchy US data means that the Fed is highly unlikely to begin its policy normalisation process until late in the December quarter,” Matthew Sherwood, head of investment strategy at Perpetual, told Bloomberg. “There has been a large upward movement in the US dollar in the past ten months and this has clearly weighed on US growth. The Fed could not possibly be convinced that the economy is on the right track until growth is above 3 percent for two consecutive quarters.”

Spot gold trimmed five days of gains with a fall of $4.70 to US$1,222.90 an ounce this morning. Crude oil futures were virtually unchanged, up one six cent at US$59.44 a barrel. The dollar was buying 79.86 US cents.


Good to see the RBA laying some foam on the runway this morning. The market was looking a bit jittery at the prospect the rate cycle was over. Sharp observers of the central bank would have picked up on a strong clue from a speech by Phil Lowe yesterday of what was coming today. That was the reason I picked up TTS and TAH this morning in anticipation that the bank minutes would throw the market a bone. TTS has rebounded nicely. Disappointed with TAH, but the day is young.