ASX set to edge higher as turbulent trading persists

July 7, 2022 - 1 month ago

The Australian share market is poised to rise as Wall Street capped another choppy day of trading Wednesday.

The Australian share market futures point to +38 points rise, or +0.59%, to 6,531, while our local currency, the Australian dollar, is currently buying US$0.6782 (as of writing).

All three major U.S. stock indexes on Wall Street finished with modest gains after investors combed the minutes from the U.S. Federal Reserve’s most recent interest rate policy meeting for clues about what the U.S. central bank may do next to tackle rising inflation.

The Fed’s minutes offered no major surprises for Wall Street as investors will now focus on what the U.S. Fed will say in July’s meeting.

Meanwhile, the minutes from the Fed’s two-day meeting last month show that the central bank’s policymakers concluded higher interest rates could be needed to restrain what they saw as a worrying trend.

The policymakers also acknowledged that more rate hikes could weaken the economy.

At the finishing bell, on the New York Stock Exchange (NYSE), the blue-chip Dow Jones Industrial Average rose +0.2%, or +69.86 points, to 31,037.68.

The broad-based Standard & Poor’s 500 Index gained +0.4%, or +13.69 points, to 3,845.08, while the rich-tech Nasdaq Composite Index, added +0.3%, or +39.61 points, to 11,361.85.

The US dollar index (US DXY), which tracks the greenback against a basket of its peers, increased +0.5% to 106.92 after soaring to a 20-year high of 107.05 while in the bond market, the yield on 10-year Treasury notes gained +4.1% to 2.926%. Yields climb when bond prices decline.

Precious metals were down, with gold falling -1.4% to $1,738 and silver losing -0.1% to $19.24.

Since nosediving more than -8% Tuesday, crude prices were still in negative territory, with the global oil benchmark Brent crude trading at $100.40 per barrel for a -2.2% loss, while U.S. benchmark West Texas Intermediate (WTI) was at $98.22 — down -1.4%.

Meanwhile, iron ore prices rose by +1.8% to US$112.35 a tonne, and cryptocurrencies Bitcoin, the world’s largest cryptocurrency by market value, advanced by +1.49% and is trading at US$20,400.00 (as of writing).

Based on the daily technical assessment of the S&P/ASX 200 (XJO), a firmer opening is foreseen, with the intraday resistance now at 6,635 minor, with 6,670 seen above. Reassess from there.

Assessing the downside, the support is observed at 6,570 minor, with 6,525 located beneath. Reassess from there.

Daily outlook on the benchmark S&P/ASX 200