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• In testimony to the Senate Banking Committee, US Federal Reserve chair, Jerome Powell, said that the US central bank was “strongly committed” to bringing down inflation. Powell said that ongoing increases in the central bank’s policy rate would be appropriate.

• In US economic data, mortgage applications rose by 4.2% last week after rising 6.6% in the prior week. Chain store sales rose 12.8% in the past week on a year ago, after rising an annual 11.4%
in the prior week.

• European sharemarkets fell on Wednesday but ended off the lows. UK inflation hit a fresh 40-year high of 9.1% in May, adding to investor jitters. But comments by the US Fed chair soothed investor concerns about potentially runaway inflation. Shares in major steelmaking companies fell by 11-13% after a broker downgrade. The pan-European STOXX 600 index fell by 0.7% after earlier being down 1.8%. The German Dax index lost 1.1% and the UK FTSE index fell by 0.9%. In London trade, shares of Rio Tinto fell by 4.4% and BHP lost 3.8%.

• US sharemarkets ended weaker on Wednesday in a volatile session as investors mulled comments by the Fed chair. The energy sector fell 4.2% in response to lower oil prices. The Dow Jones index fell by 47 points or 0.2% after trading in a 612 point range. The S&P 500 index fell 0.1%; the Nasdaq index lost 16 points or 0.2%.

• US long-term treasuries rose on Wednesday (yields lower) US 10-year yields fell by 14 points to near 3.16%. And US 2-year yields fell by 14 points to near 3.06%.

• Major currencies were firmer against the US dollar in European and US trade. The Euro rose from US$1.0470 to highs near US$1.0600 and was near US$1.0565 at the US close. The Aussie dollar rose from US68.80 cents to near US69.50 cents and was near US69.30 cents at the US close. And the Japanese yen rose from 136.60 yen per US dollar to JPY135.70 and was near JPY136.23 at the US close.

• Global oil prices fell by as much as 3% on Wednesday. Reuters reported that “US President Joe Biden is expected to ask Congress to consider a three-month suspension of the 18.4 cents per gallon federal tax on gasoline and call on states to suspend their fuel taxes.” The Brent crude price fell by US$2.91 or 2.5% to US$111.74 a barrel. And the US Nymex crude price fell by US$3.33 or 3.0% to US$106.19 a barrel.

• Base metal prices fell by up to 7.2% on Wednesday with tin down the most while zinc only fell 0.2%.

• The gold futures price fell by US40 cents or less than 0.1% to US$1,838.40 an ounce. Spot gold was trading near US$1,838 an ounce at the US close. The iron ore futures price fell by US$1.91 or 1.5% to US$127.02 a tonne. Ahead: In Australia, ‘flash’ purchasing manager indexes (PMI) are issued with detailed labour market data, finance and wealth figures and business conditions & sentiments. In the US, the Fed chair delivers testimony to Congress. The current account & ‘flash’ PMI are released.

Originally Published by CommSec