TMH Market Open: ASX to dip despite yesterday’s two-month high

Australian shares are expected to fall, despite closing yesterday at a two-month high.

US stocks resumed trade overnight following the Juneteenth long weekend. The NASDAQ and S&P both gave up around 0.5 per cent.

10 of 11 US sectors fell, with the energy and materials sectors hit hardest.

Meanwhile, fresh data out of the US has shown a surge in homebuilding. There was a marked pick-up in the construction of new homes in May, plus more permits were issued for future buildings. The news comes despite interest rate hikes by the Federal Reserve.

Back home, airline Regional Express has forecast a loss of $35 million for the financial year.

Rex Airlines blamed the downgrade on supply chain shocks and a shortage of pilots. The news was a surprise, considering the airline’s earlier predictions of turning a profit.

The Australian dollar retreated nearly a per cent. One Aussie dollar is buying 68 US cents and 53 British pence.

To commodities, and iron ore retreated from a two-month high following the widely expected People’s Bank of China lending cuts. 

Capital Economics Head of China Economics Julian Evans-Pritchard said the cuts would lower the cost of new loans, as well as interest payments on existing loans. Iron ore is trading at US$112 per tonne.

Gold also took a tumble, down nearly one per cent to US$1936.48 per ounce.