The Australian sharemarket is lifting for a second day, with the ASX 200 up 96pts or 1.6 per cent to 6,048 ahead of both the Reserve Bank (RBA) meeting this afternoon and tomorrow’s US Presidential Election. All sectors are improving at lunch. Historically, the market has been 30-40 per cent quieter on Melbourne Cup Day due partly to a state holiday in Victoria.
The market is pricing in a cut to the cash rate by the RBA this afternoon at 2:30pm AEDT. The central bank last cut rates on Melbourne Cup day back in 2011. Market pricing suggests a 15bps cut to the cash rate to 0.1 per cent. There’s an expectation it could also lower the target on the three-year Australian Government Bond yield and reduce the term funding facility rate to 0.1 per cent from 0.25 per cent. The RBA could also announce some detail of a potential QE program in a bid to keep borrowing costs low.
Energy stocks are standing out at lunch, with oil prices lifting by close to 3 per cent overnight. Russian oil companies met with the Russian Energy Minister to discuss the possibility of delaying an easing of OPEC+ output cuts by three months. Keep in mind that oil prices slumped by around 10 per cent last week due to fears of rising coronavirus cases in Europe and fresh lockdowns.
Brambles (BXB) is up by 6.2 per cent after raising its FY21 guidance to be at the upper end of its prior guidance. This follows a 5 per cent lift in first quarter sales revenue, receiving a boost from its CHEP Americas unit.
Travel stocks are lifting thanks partly to encouragingly low new coronavirus cases in Australia. Victoria has had its fourth straight day with zero cases while NSW has only had one locally transmitted case. Webjet (WEB) is up 6.3 per cent, Flight Centre (FLT) is up 3.6 per cent, Sydney Airport (SYD) is up 1.6 per cent and Qantas (QAN) is 2 per cent higher.
Sandfire Resources (SFR) is down 6 per cent after releasing a short note to the market addressing media reports that “…China may be considering a ban on imports of copper ore and concentrate from Australia.” Sandfire said it isn’t aware of the reasons for the reported potential ban or the reliability of media reports.
2bn shares have changed hands so far today, worth $2.4bn. 871 stocks are up, 304 are down and 323 are unchanged.
With the RBA meeting out of the way later this afternoon, all eyes will be on tomorrow’s US election. In other news tomorrow, Woolworths (WOW) is set to post a quarterly update, Domino’s (DMP) will hold an AGM and Bank of Queensland (BOQ) will trade ex-dividend.
Published by CommSec