PERTH: The Australian sharemarket has lifted ahead of today’s Reserve Bank of Australia board meeting, where the central bank is expected to “chill out” and hold interest rates steady.
At the 10.15am (AEDT) official market open, the benchmark S&P/ASX200 index was up 10.1 points, or 0.2 per cent, at 5176.6, while the broader All Ordinaries index climbed 9.9 points, or 0.19 per cent, to 5228.1.
“The RBA is not expected to move rates at its meeting today, but some inflation focussed analysts are pointing to the potential for a shift in language towards easing,” CMC Markets chief analyst Ric Spooner said.
“However, given Governor Stevens ‘chill out’ comments, and the clear indication of data dependency, no change and no impact remains the favoured runner.”
The Australian market will also take note of China’s manufacturing and non-manufacturing PMI, both out at noon today.
But the focus remains on commodities after the iron ore price fell to a new spot-price low overnight, slipping below $US43 a tonne for the first time in at least a decade. At the close iron ore was down 1.6 per cent at $US42.80 a tonne.
“There is a huge adjustment going on in many commodity markets at present, and much of that has to do with the ramping up of supply infrastructure to meet China’s needs, followed by the theme of oversupply once China’s appetite for raw materials stopped growing,” Rivkin chief executive Scott Schuberg said.
“From crude oil to copper to iron ore and nickel, this adjustment is inescapable and all one can do is allow lower prices to do their job and remove supply, before inventories diminish and the markets find price equilibrium,” Mr Schuberg said.