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Greetings and welcome to HotCopper’s the ASX Today for Wednesday of Week 11, I’m Jon Davidson and my big takeaway from the market today is we’ve got a mixed bag. The good news is we’re slowly recovering back over 8,700points; the bad news is the RBA is expected by a large majority of experts to hike rates next week, undoing last year’s cuts as oil prices co-mingle with electricity price pressures.
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So, we mightn’t be surging back to 9,200pts anytime soon, though interest rate fatigue is already well baked into the Australian investment psychology, making it hard to predict what might happen in the aftermath.
The bottom line: Iran can still influence global oil when it wants to, even if it needs to bomb the entire Middle East and shut down a major shipping corridor.
When it comes to the RBA next week, NAB and Westpac are tipping a rate hike, so too are UBS, Citi, Deutsche Bank and the Bank of America; as well as money market traders, and both RBA Governors haven’t exactly sounded bullish in the last week. Many appear to be seeing writing on the wall.
Let’s focus on the good news. Rare earths stocks had a pretty solid Wednesday after Lynas Rare Earths struck an improved deal with a Japanese customer tied to that nation’s government; long story short, Japan has offered Lynas a neodymium price floor of $110 a kilo in the greenback, and that good news story has lifted all boats.
Even Arafura Rare Earths jumped, a stock that isn’t winning much love from retail lately; Larvotto Resources also climbed upwards in apparent confusion.
Elsewhere, Qantas kept bouncing back off a record low on Monday at $8.50/sh, implying the market decided the price had dropped quite enough.
All of the airlines are struggling, Air New Zealand in particular, which suspended FY26 guidance yesterday, blaming high oil prices; though it’s also been blaming engine maintenance costs for a while, which is perhaps the kind of thing you’d expect an airline to have a plan for. Who knows, I don’t run an airline.
Finally, in a show of confidence the worst of this latest Iran war might be over when it comes to the Oz stock market, the L1 Global Long Short Fund was among the day’s biggest fallers as that effective ETF dropped over -7% intraday, while Betashares’ GEAR leveraged bull ETF continues to climb.
Given the popularity of index ETFs in the modern world, you can basically view those two assets as sentiment benchmarks; that the International Energy Agency intends to release oil into the market also helping matters.
That’s The ASX Today for Wednesday, I’m Jon Davidson, have a fantastic evening.
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