ASX rises 0.46% to 9020.1; Bank shares lead as Waller eases rate-hike fears
Australian stocks posted their first positive weekly session with bank yields retreating, while Federal Reserve Governor Christopher Waller signaled a likely pause in interest rate hikes ahead of the September meeting.
Australian shares achieved their first positive trading day this week as inflation concerns and bond market instability eased. The S&P/ASX 200 gained 41.7 points to close at 9020.1, a 0.46% rise, while the broader All Ordinaries index climbed 38 points or 0.41%. Financial sector stocks were the primary drivers, recovering more than 1% and reaching their highest level in over two weeks. Global X ETFs investment strategist Justin Lin attributed this to lower bond yields combined with positive GDP figures from the previous session.
However, ex-dividend price drops for major companies BHP, Woodside, and Coles capped potential gains. Analysts noted that Australia remains in a deleveraging cycle driven by policy and interest rates.
In the United States, traders adjusted expectations regarding Federal Reserve monetary policy. MSCI Asia Pacific equities rose 0.3%, and the S&P 500 advanced 1%. Swaps betting on a quarter-point rate hike in September fell to roughly 50% from nearly 70% the day prior. Federal Reserve Governor Christopher Waller stated he favored keeping rates steady if upcoming data confirmed disinflation trends.
Consequently, two-year Treasury yields fell three basis points to 4.34%. The dollar weakened to its lowest level since May. Gold prices recovered to approximately $4,475 an ounce. Traders are now awaiting the August non-farm payrolls report, which economists estimate will show 53,000 jobs added.
