The ASX was off the boil on Wednesday, mirroring the cautious approach from US investors as they wait to see what November’s Consumer Price Index (CPI) data suggests.
The S&P/ASX 200 dropped 22.4 points, or 0.27%, to 8.370.6 points as of 10:31am AEDT. The index has lost 1.09% for the last five days, and sits 1.69% below its 52-week high.
Five of the 11 sectors dipped into the red in early trading. However, materials went against the grain to continue strengthening following positive comments this week around 2025 Chinese stimulus.
The CME FedWatch Tool places the likelihood of a 25-basis-point rate cut at 85.8% at the 18 December meeting.
CME FedWatch tracks the probabilities of changes to the Fed rate, as implied by 30-Day Fed Funds futures prices.
However, the US Federal Reserve has cautioned that it is approaching the time where it will be appropriate to slow the pace of rate cuts.
They noted that incoming data would be important in formulating the rate discussion at the December meeting.
ANZ says the median expectation is for core CPI to have risen 0.3% month-over-month in November, with the core Personal Consumption Expenditures (PCE) deflator expected to be up 0.2% compared to the previous month.
The PCE deflator is a US-wide indicator of the average increase in prices for all domestic personal consumption.
Gold prices also edged higher, to US$2,702 ($4,235) an ounce, ahead of the US CPI numbers.
ANZ economists Kishti Sen, Brian Martin, and Daniel Hynes say that while the market is currently pricing in 90% of chances for an easing bias to continue, any signs of pause could be a headwind for gold prices.
“Haven buying amid geopolitical tension is boosting market sentiment as well. China’s central bank resumed its gold buying after pausing in May,” the analysts note.
Gold miner Vault Minerals (ASX:VAU) led the early gainers, advancing 3.42% to $0.38. Coal producer Whitehaven Coal (ASX:WHC) rose 1.91% to $6.68, and uranium miner Paladin Energy (ASX:PDN) climbed 1.57% to $7.74.
On the other end of the scale, South32 (ASX:S32) slid 3.67% to $3.55, Mineral Resources (ASX:MIN) wiped off 1.75% trade at $36.51, and gold producer West African Resources (ASX:WAF) slipped 1.53% to $1.62.
The S&P/ASX 200 is Australia’s leading share market index and contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market. The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation.
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
Images: ASX & Stock
