For the fourth straight day, Australian stocks increased on Wednesday as expectations of a September interest rate decrease by the Fed Reserve were bolstered by weaker U.S. producer price data. In broad-broad buying, the S&P/ASX 200 index increased 0.6% to 7,872.2 by 00:18 GMT. Because less expensive services offset an increase in the cost of products, U.S. producer prices rose less than anticipated in July, suggesting that inflation remained mild. Investors are now placing bets on an aggressive rate decrease by the US central bank, awaiting key consumer price data on Wednesday & data on retail sales on Thursday.
An Annual Profit Decline
According to CME’s FedWatch Tool, traders now perceive a 55% possibility of a 50 basis point rate drop by the Federal Reserve in September, up from lower than 50% prior to the announcement. When the Fed cuts interest rates, other central banks will be compelled to do the same, including Australia, where rates are already seen at a 12-year high. The US Dow Jones Industrial Average increased by 1.04% overnight. The Nasdaq increased by 2.43%, while the S&P 500 earned 1.68%. Corporate profits were the focus in Australia, where leading lender CBA reported an annual profit decline that was less than anticipated, which caused its shares to rise by 0.7%.
Bullion Prices at Record High
Following the release of a nearly three-fold increase in yearly profit, AGL Energy’s shares surged as much as 5.3% to reach their top highest level in a year. Sector-wide, gold stocks surged 1.5% to reach their highest point in three weeks, with bullion prices nearly at record highs. Real estate equities that are susceptible to interest rates increased 1% for the fourth straight trading day. Financials increased by 0.6%. The benchmark S&P/NZX 50 index in New Zealand increased by 0.7% to 12,404.1.
