ASX to rise, US banks stocks dent rally

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Australian shares are set to open higher, though fading gains in New York could dent the advance. $A edges up.

Australian shares were poised to open higher even after US stocks pared most of their early gains. Morgan Stanley downgraded Charles Schwab, citing shift in deposits, renewing concerns about US regional banks.&The local currency was 0.3 per cent higher, edging above US67¢; the Bloomberg dollar spot index slipped 0.2 per cent.The yield on the US 10-year note was 2 basis points lower to 3.55 per cent at 1.49pm in New York.

Cyprys cut his buy-equivalent rating on Schwab for the first time since he began covering the brokerage stock seven years ago. “While clients aren’t leaving and Schwab has other sources of liquidity, earnings face more pressure than we had expected,” Cyprys wrote, lowering his forecast for profit this year and next by 30 per cent.

Federal Reserve Bank of Boston president Susan Collins said the US banking system is sound and more interest-rate increases are needed to bring down inflation. “Inflation remains too high, and recent indicators reinforce my view that there is more work to do, to bring inflation down to the 2 per cent target associated with price stability,” Collins said in remarks at conference hosted by the National Association for Business Economics in Washington.

 

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