18 June Markets at a glance

Around the grounds

• ASX continues to track higher
• RBA keeps rates steady
• Iron ore rebounds on profit-taking
• FMG tumbles on reports of a AU$1.1 billion block trade

The ASX is higher after the Reserve Bank of Australia (RBA), as expected, left rates on hold at a 12-year high of 4.35%, and kept the “not ruling anything out bias” reiterating further increases to the benchmark would be warranted to control inflation.

It came as no surprise to market participants who had expected a hold given the economy ground to a halt in the first quarter and wage growth slowed more than expected.

The board said it remains resolute in its determination to return inflation to target though added price pressures are proving persistent and inflation is easing more slowly than previously expected. 

The Australian dollar (AUD) is marginally weaker on the back of that decision trading around 66 US cents.  

Elsewhere, rate-sensitive financial stocks are tracking higher with the broader index up nearly 1.5%, while the miners have recovered earlier losses. The broader index has rebounded from 1.5 year lows earlier in the session as the price of iron ore gained ground on profit-taking following market talks of steel output control in China.

The most-traded September iron ore contract on China's Dalian Commodity Exchange ended morning trade nearly 1.6% higher.

In the news

Australian listed shares of Fortescue (FMG) have hit their lowest level since October last year, as the AFR reports an institutional investor has sold a stake worth over AU$1 billion in a block trade.

Elsewhere, ASX listed shares of Tamboran Resources (TBN) are in focus after the company confirmed it is targeting a valuation of up to AU$474 million from an initial public offering in New York.

The company, valued at AU$391.5 million in the domestic market is looking to list in the US as it seeks to tap institutional shale gas investors with access to deeper capital markets.

And Premier Investments (PMV) is trading ex-dividend.

Going global

Around the region Japan’s Nikkei 225 has rebounded, up around 1% as investors sought to buy the dip following a yesterday’s plunge as investors remain cautious on the path of policy at the Bank of Japan.

On Friday, the BOJ said it would start trimming its bond purchases and said it would announce a detailed plan in July on reducing its mammoth balance sheet.

More broadly, MSCI’s index of Asia-Pacific shares outside of Japan were higher, driven by another rally on Wall Street.

Stateside, focus turns to Fed policy makers with six members on the speaking docket tonight, with investors eager for any clues on the US interest rate outlook following the FOMC’s policy decision and revised dot plots last week.

Futures signal around 45 basis points of cuts for the US central bank for the rest of 2024, according to the CME FedWatch Tool.

In forex, the US dollar is mixed, the euro is a touch lower, and sterling is higher.

China’s onshore yuan has continued to hover near a seven-month low, weighed down by mixed economic data out of the tiger economy earlier in the week that signalled further support from Beijing may be needed to shore up the country’s economy.  

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