The ASX is poised to extend losses on Monday
Wall Street falls on Friday despite jobs report
Gazprom to keep European gas pipeline shut down for now
Local shares are set to extend their losses this morning following the 4% loss last week. At 8am AEST, the benchmark ASX 200 September futures contract was pointing down by 0.25%.
On Friday, major Wall Street indices fell around 1%, suffering its third straight weekly loss.
Data released showed the US economy added 315k jobs in August, versus 298k consensus. In all, around 3.5 million jobs have been created in 2022 despite the economy technically being in recession.
“GDP is likely to rebound 3% in the current quarter, and core inflation is set to rise to 6.1% from 5.9% on September 13th. So a 75bp rate hike on September 21st looks a solid call,” said ING’s James Knightley.
But there are real fears the Eurozone could go into a recession after Russia’s Gazprom said it could not yet turn back the tap after shutting down the Nord Stream pipeline for maintenance work last week.
— Gazprom (@GazpromEN) September 2, 2022
Major European stock markets rose on Friday despite the news, and oil prices jumped 1%.
The rebound in oil comes as nuclear talks between Iran and the US appear to have stalled.
“A deal has been a big downside risk for oil prices recently (which fell 10% over the past week), something Saudi Arabia sought to counter with warnings of production cuts from the alliance,” said OANDA analyst, Craig Erlam.
Gold keeps falling and is heading towards the technical support price of US$1,700 – currently trading at US$1,710 an ounce.
“Gold is really struggling amid growing expectations of another 75 basis point rate hike from the Fed this month,” said Erlam.
Iron ore price was also down 0.6% to US$95/tonne, while Bitcoin is at US$19,857.
BTC has been flirting with $20K for a couple of weeks now, and it appears that the bulls may have finally given up.
Looking ahead, this could be a week for the cold-blooded with a busy, potentially market-moving set of economic data in the post.
Critically, the Reserve Bank of Australia (RBA) and the European Central Bank (ECB) are announcing their interest rate decisions.
The RBA board meeting is on Tuesday, and the experts have predicted another 25bp to 50bp rate hike this month.
Today, a set of data reports will be released in Australia including:
– AIG Construction index for August
– Services PMI for August
– Business inventories for Q2
– Company profits pre-tax for Q2
5 ASX small caps to watch today
Wide Open Agriculture (ASX:WOA)
WOA’s expansion into Southeast Asia has continued after entering into an agreement with The GrowHub Innovations Company. The deal will see WOA’s Dirty Clean Food’s oat milk marketed throughout Indonesia and Malaysia. The GrowHub will initially purchase approximately $150k worth of products.
Botala Energy (ASX:BTE)
A binding MOU has been signed with Solar Finland to jointly investigate solar power generation projects and establish solar panel manufacturing in Botswana. Solar Finland will employ its Salo technology, while Botala will establish a Salo panel manufacturing plant at its proposed Leupane Industrial Park.
Duketon Mining (ASX:DKM)
Results of metallurgical testwork at the C2 Project have been received. In summary, C2 ore responds well to conventional flotation; nickel recovery was as high as 77.3% to a saleable grade concentrate; while copper and cobalt were recovered.
Tyro Payments (ASX:TYR)
Tyro released a report saying that its transaction value for the first three months of the financial year up to end of August was $6.838 billion. This was an increase of 57% on the pcp.
Gold 50 (ASX:G50)
Drilling is now anticipated to commence in October at the company’s flagship Golconda Project in Arizona. A drilling contract has been agreed with Nevada-based Harris Drilling, and the exploration program is fully funded.
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