ASX to rise despite US stocks staying down

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Australian shares are expected to advance as the market opens, following American jobs data that suggested the Federal Reserve would stick to rate rises.

The Australian dollar was down 1 per cent at US67.69¢.

On Wall Street, US stocks stayed lower as investors grappled with continued evidence of strength in the labour market, which could keep the Federal Reserve firmly on its path of rate increases. Treasuries trimmed losses and the dollar remained higher.P 500 and the Nasdaq 100 fell after hiring numbers surpassed estimates in a private payrolls report on Thursday and new claims for unemployment benefits unexpectedly fell last week.

“We always say don’t fight the Fed when there are easy monetary conditions,” Kristen Bitterly of Citigroup Global Markets said on Bloomberg Television. “We have to follow that sage advice when there are tightening financial conditions. All this data we are getting is telling us that they are going to continue on this tightening path.”

Atlanta Fed president Raphael Bostic also bruised sentiment on Thursday after he said the central bank still had “much work to do” to tame inflation. He added to a chorus of hawkish Fed officials this week. Minneapolis Fed president Neel Kashkari said on Wednesday that he expected rates to rise as high as 5.4 per cent. Kansas City Fed’s Esther George said she favoured a rise above 5 per cent.

Swap rates linked to individual Fed decisions jumped and now suggest a peak in the overnight effective rate of close to 5.05 per cent in the middle of this year. The current target range for the Fed is 4.25 per cent to 4.5 per cent and there are about 0.38 of a percentage point of rises priced in for the next gathering next month.Beyond sank after warning it might not be able to continue as a going concern.

 

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ASX to rise despite US stocks staying downAustralian shares are expected to advance as the market opens, following American jobs data that suggested the Federal Reserve would stick to rate rises.
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