...ASX market this morning decided not to look at what Dow futures is doing (-200pts). And commodities start off the block continuing with their declines.
ANZ has declared a 50 basis point rate rise by the RBA tomorrow is a “done deal”, citing further evidence of solid consumer spending in June.
The bank noted that average daily spending (excluding petrol) rose by 1.9 per cent month-on-month in June, based on its data until June 28.
Consumers flocked to the shops for end-of-financial-year sales, with shopping spending rising 7.7 per cent on the final weekend of June compared to the previous weekend.
Average daily entertainment spending rose 14.2 per cent after a slight dip in May, with cinema spending the standout.
“The RBA has noted it will be ‘watching consumer spending carefully’, and solid June spending only reinforces the case for a 50bp rate hike on Tuesday, as do strong job vacancies, a very tight labour market and still very negative real interest rates,” ANZ economist Madeline Dunk said.
Commodities under pressure on recession fears
Alex Gluyas
Commodities prices tumbled last week amid concerns that an economic slowdown will hurt demand.
Copper fell to its lowest since February 2021 as the market became increasingly concerned about the effect slowing economic activity will have on demand. The metal, which is seen as an economic bellwether, is now around 25 per cent off its peak reached in early March.
Other industrial metals also tumbled, with nickel down 3.9 per cent while zinc fell close to 10 per cent last week week.
Iron ore sank for a third consecutive day on Friday following renewed fears of curbs on Chinese steel output. Rumours swirled through the market that the Chinese government was targeting a cut to annual output for a second year in 2022, according to ANZ.
Crude oil finished the week on a positive note as supply side issues offset concerns of weaker demand.
