The Australian share market is expected to dip in early trade as investors wait for the all important cash rate announcement from the Reserve Bank of Australia this afternoon.
The SPI is pointing to a lower open after US stocks finished mixed, following fresh data from the Institute for Supply Management showing the purchasing managers index for the services sector jumped in July. Investors were mixed on the news, with some boosted by the uptick and others worried the Fed could begin tapering its bond-buying program.
But the Australian market is expected to be focused on the RBA’s decision today, with a cash rate cut widely tipped.
An August rate cut is being reported as a near certainty after low June quarter inflation figures were followed by warnings from Reserve Bank governor Glenn Stevens last week.
Most economists expect the RBA to cut the cash rate by a quarter of a percentage point, from the already record low of 2.75 per cent.
Currencies
Currency traders will no doubt be closely watching that news from the RBA today. At 7:30AM the Aussie dollar was buying $US89.35 cents, 58.19 Pence Sterling, 87.82 Yen and 67.39 Euro cents.
Figures
Wall Street was subdued: The Dow Jones Industrial Average lost 46 points to close at 15,612, the S&P 500 dropped 3 points to close at 1,707 and the NASDAQ added 3 points to close at 3,693.
European markets followed suit: London’s FTSE lost 28 points, Paris gained 4 points and Frankfurt dipped 9 points.
Asian markets were also mixed: Tokyo’s Nikkei fell by 208 points, Hong Kong’s Hang Seng added 31 points, and China’s Shanghai Composite lifted 21 points.
The Australian share market edged slightly lower after a fairly low volume trading session yesterday, falling 0.1 per cent to break a ten day winning streak. The S&P/ASX 200 index closed 6 points down to finish at 5,111. On the futures market the SPI is 9 points down.
Economic news
All eyes will be on the Reserve Bank of Australia’s monthly board meeting and interest rate decision today. FNN will bring you that news update as soon as it happens at 2.30pm AEST.
The Australian Bureau of Statistics will also release its international trade in goods and services for June as well as the house price indexes for eight capital cities for the June quarter.
And ANZ will put out its job advertisements series for July.
Company news
Downer EDI Limited
(ASX:DOW) will release its full-year results today. The engineering company has won a few lucrative contracts recently, which may improve its outlook. But investors will be looking at the result for clues about how the mining services sector is faring. Shares in Downer EDI lifted 1.56 per cent yesterday to close at $3.91.
Cochlear Limited
(ASX:COH) will also brief investors on its full-year earnings today. The hearing device company is likely to be closely watched after it issued a profit downgrade and news of increased competition threats from a new Chinese company. Shares in Cochlear lifted almost one per cent (0.94 per cent) yesterday to close at $59.15.
Ex-dividend Djerriwarrh Investments Limited
(ASX:DJW) will pay 16 cents per share fully franked.
Commodities
Gold is down $8.10 to $US1,302 an ounce for the December contract on Comex. Silver is down $0.19 to $19.72 for September. Copper is flat at $3.17 a pound. Oil is down $0.38 at US$106.56 a barrel for September light crude in New York.
