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The share market was poised to open little changed ahead of today’s rates announcement after Wall Street gave up most of its early overnight gains.

US stocks closed ahead, but well off session highs. Iron ore extended last week’s advance. Oil and gold declined. The dollar dipped back under 72 US cents.

ASX futures eased five points or 0.07 per cent ahead of today’s Reserve Bank policy meeting. The bank is widely expected to announce an increase in the cash rate target of between 25 and 50 basis points this afternoon.

Wall Street

Gains in Asia and Europe got the US session off to a bright start amid optimism about China lifting Covid restrictions and winding down a crackdown on its megacap tech sector. The early advance dwindled as familiar concerns about inflation and the risk of a recession encouraged traders to fade the rally.

The Dow Jones Industrial Average finished 16 points or 0.05 per cent ahead after being up more than 300 points. The S&P 500 added 13 points or 0.31 per cent. The Nasdaq Composite held on to a gain of 49 points or 0.4 per cent.

Asian markets rallied after Beijing lifted a ban on indoor dining, the latest step towards restarting the economy as Covid infection rates drop. The Wall Street Journal reported a Chinese government probe into ride-hailing firm Didi and two other US-listed Chinese firms was wrapping up amid reports authorities underestimated the chilling effect of the intervention on economic growth.

“China is reopening and hopefully the economy will be close to operating at near-full capacity within a month. That will add a large tail-wind to the global economy, and perhaps most importantly, ease supply chain stress,” Tom Essaye, founder of the Sevens Report, said.

Hong Kong’s Hang Seng index jumped 2.71 per cent. China’s benchmark index rallied 1.28 per cent. The positive mood flowed into Europe, where the Stoxx 600 index added 0.92 per cent.

Didi‘s US listed shares jumped 24.32 per cent. Other US-listed Chinese companies also advanced.

US stocks lost altitude as bond markets sold off, pushing yields higher. The ten-year treasury yield climbed to its highest in a month.

Big Tech did most of the night’s heavy lifting. Amazon gained 1.99 per cent following a 20-for-1 stock split. Apple edged up 0.52 per cent after unveiling a new chip and software update.

Consumer stocks were also strong, boosted by casino operators with interests in Macau. Twitter eased 1.49 per cent as the board and suitor Elon Musk continued to bicker over spam accounts.

Australian outlook

A cautious start coming up as investors await this afternoon’s RBA rates announcement. The bank is certain to raise the cash rate target at 2.30 pm AEST. The question is whether Australia gets a standard 25 basis points increase or a more hawkish hike. Economists are divided. A relief rally seems possible if the former, increased pressure on equities if the latter.

The S&P/ASX 200 took a step backwards yesterday, falling 32.5 points or 0.45 per cent on weak leads from Wall Street. Overnight US action was positive, but far from compelling as the major indices steadily lost strength.

Consumer stocks outperformed, with support from the materials sector (+0.97 per cent). Financials edged up 0.38 per cent and industrials 0.4 per cent.

The night’s only sector losses were energy -0.11 per cent and real estate -0.29 per cent.

A busy day for domestic economic data includes services sector activity, building approvals and weekly consumer confidence.

IPOs: Uvre Limited lists at 11 am AEST. Uvre is an explorer targeting uranium and vanadium in Utah.

The dollar eased 0.1 per cent to 71.93 US cents.

Commodities

Iron ore added to gains from its best week in three months amid expectations for stronger demand as China reopens. Inventories at several major ports fell to an eight-month low, according to Steelhome data. Margins at Chinese steel mills reportedly expanded after contracting to a 15-month low.

The spot price for ore landed in China climbed 84 US cents or 0.6 per cent to US$145.24 a tonne.

The prices of most industrial metals jumped as the London Metal Exchange resumed trade after a four-day holiday. Benchmark copper surged 2.6 per cent to US$9,743 a tonne. Aluminium firmed 2 per cent, nickel 5.6 per cent, lead 2 per cent and tin 2.2 per cent. Zinc dipped 0.2 per cent.

“The market is a lot healthier than it was a few weeks ago, with global economic data continuing to hold up amid the ongoing China reopening narrative,” Stephen Innes, managing partner at SPI Asset Management, told Reuters.

Copper prices in the US later retreated. July copper dropped 0.9 per cent on Comex to US$4.43 a pound.

Oil took a breather after retesting US$120 a barrel. Brent crude settled 21 US cents or 0.2 per cent weaker at US$119.51 a barrel. The US benchmark finished 0.3 per cent lower at US$118.50 after trading as high as US$121 on news Saudi Arabia increased official selling prices to Asia and much of Europe.

Gold fell for a second day as rising yields weighed on non-yielding assets. Metal for August delivery settled US$6.50 or 0.3 per cent lower at US$1,843.70 an ounce. The NYSE Arca Gold Bugs Index declined 1.26 per cent.

BHP and Rio Tinto surged in UK trade as the London Stock Exchange reopened after Jubilee celebrations. BHP gained 4.25 per cent. Rio Tinto added 3.44 per cent. In US trade, Rio firmed 1.4 per cent, while BHP dropped 0.48 per cent

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