Fed Reserve keeps rates unchanged: ASX poised to open lower

Market Reports

by Rachael Jones

Following a fall from US markets overnight, the Australian share market looks set to open lower this morning. Yesterday it closed higher for its seventh consecutive session, despite falls for mining, bank and energy stocks. In the US the Federal Reserve left rates unchanged yesterday and indicated that they’ll likely remain near zero until at least 2022 as the economy tries to recover from the coronavirus pandemic. It sees the economy contracting 6.5 per cent this year, before rebounding a little and growing 5 per cent in 2021. The Aussie dollar fell but managed to gain some ground, now standing around 69 US cents.

Local economic news due out today

The ABS will be releasing a report measuring the impact of COVID-19, March - May 2020.


Wall Street closed mixed yesterday: The Dow Jones Industrial Average closed 1.04 per cent lower at 26,990, the S&P 500 lost 0.5 per cent to 3190 and the NASDAQ gained 0.7 per cent to 10,020.

European markets closed lower, London’s FTSE fell 0.1 per cent, Paris lost 0.8 per cent and Frankfurt closed 0.7 per cent lower.

Asian markets closed mixed, Tokyo’s Nikkei added 0.2 per cent, Hong Kong’s Hang Seng closed 0.03 per cent lower, and China’s Shanghai Composite closed 0.4 per cent lower.

Taking all of this into equation, the SPI futures are pointing to a 1.1 per cent fall.

Yesterday, the Australian share market closed 0.06 per cent higher at 6148.

Company news 

Air New Zealand (ASX:AIZ) released a statement this morning responding to the recent speculation included in the Australian Financial Review regarding Air New Zealand currently considering various funding options, including a potential capital raising. Air New Zealand currently has a $900 million facility from the Crown which has yet to be drawn. The company continues to assess its capital structure and the options available to it, including taking advice from professional advisers as required. Air New Zealand will provide any further updates to the market as required in accordance with its continuous disclosure obligations. Shares in Air New Zealand (ASX:AIZ) closed 6.97 per cent lower at $1.74 yesterday.


One Australian Dollar at 7:45 AM was buying 69.97 US cents, 54.89 Pence Sterling, 74.95 Yen and 61.52 Euro cents.


Iron Ore lost 0.6 per cent to US$103.93.
Iron Ore futures suggest a 0.1 per cent fall.
Gold has lost $1.20 to US$1721 an ounce.
Silver is flat at US$17.80 an ounce.
Oil was up $0.66 to US$39.60 a barrel.