12 June Markets at a glance

Around the grounds

• ASX falls for second session
• Miners touch 11-week low
• China data signals efforts to prop up economy are working
• Currency markets hold steady ahead of FOMC & CPI

The S&P/ASX200 continues under pressure in today’s trade, as investors eye upcoming US inflation data and the FOMC’s rate decision, with the benchmark hovering near a one- week low.

Australian listed miners are the worst performers, as the broader sub-index touches an 11-week low on the tails of a drop in iron ore futures, weighed down by lingering weak fundamentals and concerns over demand in top consumer China. The index is down over 10.5% this year, as of last close.  

Financial stocks are also faltering, with gold stocks hitting their lowest level since early April, despite bullion prices firming.

Energy is bucking the trend, trading higher tracking a move up in the price of oil.

In the news

Australian listed shares of Evolution Mining (EVN) have taken a dip after the gold miner said its operations in NSW and Queensland had been impacted by high levels of rainfall, while operations at its Canadian mine were disrupted by seismic events. Both disruptions will impact its net gold production in the quarter-to-date. 

Meanwhile, BHP Group (BHP) shares are lower, after Australia's mining and energy union filed for same job same pay orders covering 1,700 labour-hire coal mine workers at three large BHP coal mines in Queensland.

Shares of Australian listed BirdDog Technology (BDT) are up nearly 6% as the hardware and software solutions firm inked binding agreements with Home Made Robots to purchase nearly 32 million company shares through a selective buyback programme. The stock is down 39.1% this year as of last close.

Finally across the ditch, New Zealand has launched an inquiry to assess competition in the banking sector, focusing on services in rural regions. The decision comes after a draft report released in March by the country’s competition watchdog said New Zealand’s four major banks provided limited competition for personal banking. Adding a focus on maintaining profit margins had resulted in under=investment in technology and low levels of innovation.

Going global

The US dollar is holding steady after touching a four-week peak against its peers as investors eagerly await key U.S. inflation data and the Federal Reserve’s rate decision. While no change is expected to policy, market participants will be keeping a close watch on the dot plots. NAB expects the projections to show policy makers see two cuts to the benchmark this year, down from the three expected at the FOMC’s March meeting.

In his press conference following the decision, markets expect a dovish tilt from FOMC Chair Jerome Powell with firm focus on any hints for when the first cut will be. Markets are currently pricing in a 56% chance of the first cut in September, according to the CME FedWatch tool.

On the inflation print, released just hours before the Fed concludes its two-day policy meeting, consensus is for the headline number to ease to 0.1% from 0.3% last month, while NAB tips core prices to remain steady at 0.3%.

China is also on investors watchlist. After data showed consumer inflation measures rose at a steady pace in May, while producer price declines narrowed. The moves signal government efforts to prop up the economy could be starting to bear fruit.

Elsewhere in forex, the euro was mostly flat, as investors continue to digest French President Emmanuel Macron’s call for a snap election, while sterling struggled to find direction, unchanged at $1.2735.

The yen is also steady ahead of the Bank of Japan (BOJ) meeting later this week, where policy is widley expected to remain steady.

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