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ASX to inch higher as US jobs market strengthens and RBA downplays mortgage stress

The XJO is expected to inch higher, following a US lead with Wall Street returning to its strongest levels since March 2022 thanks to an improving job market which exceeded forecasts. These expected gains follow RBA commentary last week that outlined how financial stress is unlikely to impact stability as majority of borrowers remain able to cover expenses and service their loans.

US Markets

Equity markets closed higher on Friday, with all Dow Jones, S&P 500 and NASDAQ up +0.4%. Nonfarm payrolls increased 199k in November, the unemployment rate fell to 3.7% and monthly wage growth increased.

European Markets

European equity markets closed higher on Friday, with the Stoxx Europe 600 up +0.7% and German DAX up +0.8%.

The U.K. FTSE 100 gained +0.5%, after a survey by BOE revealed British households are growing more optimistic that inflation is cooling and interest rates have peaked.

Asian Markets

Asian equity markets closed mixed on Friday, with the Shanghai Composite up +0.1%, as China’s top leaders pledged to strengthen fiscal support and emphasized the importance of economic “progress” at the Politburoa that supported economists’ expectations for a growth goal of around 5% for 2024.

The Hang Seng was down -0.1% and KOSPI gained +1.0%. Nikkei 225 declined -1.7%, as data revealed Japan’s economy contracted more sharply than initially estimated in 3Q23 with GDP shrinking at an annualized 2.9%, as private consumption figures were revised to show a decline.

RBI voted unanimously to keep the benchmark repurchase rate at 6.5% and raised its 2023 GDP growth projection by +50bps to +7%, while signaling it’s nowhere close to cutting interest rates yet as a survey by the bank revealed Indian households expect inflation to climb in the next few months to a year, mainly driven by costly food and housing prices.

WTI oil is trading at US$71.20 a barrel.

Iron ore price is at US$126.96 per ton. 

Spot gold is trading at US$2003 per oz.

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Emily Maxwell

Emily Maxwell is a business writer at The Sentiment with interest in the tech, fintech and retail industries.

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