Australian equities closed the week on a positive note, with the ASX 200 gaining 0.7%. This performance was bolstered by strong showings in the Energy and Materials sectors, which rose by 4.1% and 3.3% respectively. The rally in commodities following a cooler-than-expected US ISM report contributed significantly to this rise.
The Reserve Bank of Australia’s (RBA) June meeting minutes revealed that the board had considered further tightening before ultimately leaving rates unchanged at a 12-year high of 4.35%. The RBA reiterated its commitment to returning inflation to the 2-3% target, keeping the possibility of a rate hike in August open.
In the United States, equity markets experienced a robust performance during the holiday-shortened week. The S&P 500, Dow Jones, and Nasdaq all recorded gains, with the S&P 500 closing above the 5,500 mark for the first time, driven by significant advances in big tech stocks.
Despite the mixed economic data, including lower-than-expected ADP private payrolls and initial jobless claims pointing to a labour market slowdown, investor sentiment remained buoyant. The Federal Reserve’s latest meeting minutes suggested a cautious approach to future interest rate cuts, emphasising a wait-and-see strategy amidst diminishing price pressures.
European equities saw a recovery, with key indices such as the Euro Stoxx 50, EuroStoxx 600, and FTSE all finishing higher. France’s CAC 40 index led the charge, boosted by the positive outlook from the French parliamentary election polls. European Central Bank President Christine Lagarde indicated that more time was needed to assess inflation trends before making any further policy decisions.
Meanwhile, in Asia, Japanese markets enjoyed a strong week, with the Nikkei reaching record highs. A weak yen and robust performance from blue-chip companies contributed to this rise.
Published 9/7/2024
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