The ASX 200 dropped 0.5% on Tuesday after the RBA held rates steady as expected, but the tone of the statement shifted the decision into a decidedly “hawkish hold”. Michele Bullock's comments pushed bond yields to their highest level since late 2024 and the $A back to its 2025 highs, leaving stocks swimming against the tide ahead of the Fed decision on Thursday.
The ASX 200 opened weaker on Monday before trading in another narrow range, eventually finishing the session down just -0.1%. Outside of another impressive session for the lithium stocks, it was a fairly non-committal session with investors and traders alike happy to sit on the sidelines ahead of the RBA today and Fed on Thursday - credit markets are still expecting no change locally and a 0.25% cut in the US, but it’s the accompanying rhetoric that will determine where stocks finish the week.
Wall Street is lending incredible sums of money as the AI revolution explodes, even as it wrestles with how to shield itself from a potential bubble of its own making. As we’ve shown before, the cost of protecting Oracle Corp. debt against default has risen to the highest since the GFC. The sheer fact that risk levels are comparable to the tumultuous times back in 2007/8 shows how much money is at stake. Mega offerings from tech behemoths, including Oracle, Meta Platforms, and Alphabet, have already helped push global bond issuance well over $US6 trillion in 2025.
The ASX 200 enjoyed a firm session on Thursday, closing up +0.3% on its intra-day high, an uncommon trait of late. It was another session where the miners supported the local market but this time the banks finally played a supporting role.
The ASX200 advanced +0.2% on Wednesday, with the utilities and energy sectors leading the market higher, even though more stocks on the main bourse ended the day in the red. On the stock level, gains were mixed, but another strong session by BHP added almost 50% of the day's gain on its own. MM remains bullish towards miners, believing they will continue to outperform the broad market as they have over the last 6-months, although we do believe several of the large tech names are close to a sharp bounce, especially if/when rate hike fears fade.
The ASX200 tried and failed to close above 8600 on Tuesday, with mining and energy stocks again supporting a nervous index. However, ongoing weakness in the rate-sensitive stocks saw the tech -1.6%, utilities -0.4%, and consumer discretionary -0.3% sectors all retreat as bets increased that the RBA will hike rates through 2026 - traders are now pricing in a ~70% chance that Michele Bullock & Co move +0.25% by next Christmas.
The ASX 200 opened firmer on Monday, but bank-led selling aided by softer US futures reversed early gains, with the index finishing 0.6% lower. The Australian Stock Exchange suffered another embarrassing episode, potentially adding to the intra-day selling that saw almost 70% of the main board closing in negative territory at the final bell.
The expected policy path of central banks, especially the RBA and the Fed, has been the main driver of the ASX’s relative performance in recent weeks. The chart below of US and Australian short-dated bond yields illustrates the divergence that weighed on local risk assets - Australian 3-year bond yields increased ~0.5% from their recent lows while the US 2s edged down towards fresh multi-year lows.
The ASX 200 drifted lower yesterday afternoon, surrendering most of the day's early gains to close up just +0.1%. The winners and losers arm wrestle was a close affair, but the bulls eventually triumphed, marking the index's longest daily winning streak since May, as renewed strength in the tech sector and the growing probability of a December interest rate cut from the US Fed put investors in a buying mood the day before Thanksgiving holiday, albeit tentatively.
The ASX200 advanced +0.8% on Wednesday, although another hot CPI reading took the edge off the strong performance. Well over 70% of the main board closed higher, with the miners again the shining light while the banks reversed early gains with two closing lower as the influential sector struggles in the face of no further rate cuts by the RBA.
The ASX 200 opened weaker on Monday before trading in another narrow range, eventually finishing the session down just -0.1%. Outside of another impressive session for the lithium stocks, it was a fairly non-committal session with investors and traders alike happy to sit on the sidelines ahead of the RBA today and Fed on Thursday - credit markets are still expecting no change locally and a 0.25% cut in the US, but it’s the accompanying rhetoric that will determine where stocks finish the week.
Wall Street is lending incredible sums of money as the AI revolution explodes, even as it wrestles with how to shield itself from a potential bubble of its own making. As we’ve shown before, the cost of protecting Oracle Corp. debt against default has risen to the highest since the GFC. The sheer fact that risk levels are comparable to the tumultuous times back in 2007/8 shows how much money is at stake. Mega offerings from tech behemoths, including Oracle, Meta Platforms, and Alphabet, have already helped push global bond issuance well over $US6 trillion in 2025.
The ASX 200 enjoyed a firm session on Thursday, closing up +0.3% on its intra-day high, an uncommon trait of late. It was another session where the miners supported the local market but this time the banks finally played a supporting role.
The ASX200 advanced +0.2% on Wednesday, with the utilities and energy sectors leading the market higher, even though more stocks on the main bourse ended the day in the red. On the stock level, gains were mixed, but another strong session by BHP added almost 50% of the day's gain on its own. MM remains bullish towards miners, believing they will continue to outperform the broad market as they have over the last 6-months, although we do believe several of the large tech names are close to a sharp bounce, especially if/when rate hike fears fade.
The ASX200 tried and failed to close above 8600 on Tuesday, with mining and energy stocks again supporting a nervous index. However, ongoing weakness in the rate-sensitive stocks saw the tech -1.6%, utilities -0.4%, and consumer discretionary -0.3% sectors all retreat as bets increased that the RBA will hike rates through 2026 - traders are now pricing in a ~70% chance that Michele Bullock & Co move +0.25% by next Christmas.
The ASX 200 opened firmer on Monday, but bank-led selling aided by softer US futures reversed early gains, with the index finishing 0.6% lower. The Australian Stock Exchange suffered another embarrassing episode, potentially adding to the intra-day selling that saw almost 70% of the main board closing in negative territory at the final bell.
The expected policy path of central banks, especially the RBA and the Fed, has been the main driver of the ASX’s relative performance in recent weeks. The chart below of US and Australian short-dated bond yields illustrates the divergence that weighed on local risk assets - Australian 3-year bond yields increased ~0.5% from their recent lows while the US 2s edged down towards fresh multi-year lows.
The ASX 200 drifted lower yesterday afternoon, surrendering most of the day's early gains to close up just +0.1%. The winners and losers arm wrestle was a close affair, but the bulls eventually triumphed, marking the index's longest daily winning streak since May, as renewed strength in the tech sector and the growing probability of a December interest rate cut from the US Fed put investors in a buying mood the day before Thanksgiving holiday, albeit tentatively.
The ASX200 advanced +0.8% on Wednesday, although another hot CPI reading took the edge off the strong performance. Well over 70% of the main board closed higher, with the miners again the shining light while the banks reversed early gains with two closing lower as the influential sector struggles in the face of no further rate cuts by the RBA.
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