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ASX this week: Cash rates in focus

ASX this week: Cash rates in focus

The Reserve Bank of Australia will make its November cash rate call tomorrow, while the US Federal Reserve will decide on its monetary policy after a two-day meeting ending Wednesday.

Australian stocks, measured by the S&P/ASX 200 index, slumped 2.7% last week to 5,283.8, the steepest decline since the week ended 17 June. All sectors were in the red last week, leading the nation's benchmark share index to a 2.8% loss so far this month.

On Friday:

  • Brent oil shed 1.5% to US$49.71 a barrel, extending its weekly loss to 4%
  • WTI crude slipped 2.1% to US$48.70 a barrel; down 4.2% for the week
  • Iron ore with 62% content delivered to Qingdao, China, gained 1.5% to US$63.96 a dry metric tonne; up 8.9% for the week
  • Spot gold traded at US$1,275.47 an ounce; up 0.7% for the week
  • Australian dollar traded at 75.99 US cents, weakening 0.1% over the week; the currency was little changed at 75.96 US cents at 10:30am Sydney time on Monday

What to watch this week

The Federal Open Market Committee, the arm of the US Federal Reserve that sets the country's monetary policy, will meet on Tuesday and Wednesday to decide on US interest rate settings.

The outcome from their meeting will be available at 5am Sydney time on Thursday.

"No change in rates is expected but the wording of the statement will be scrutinised," said CommSec.

Locally, the Reserve Bank of Australia board will meet tomorrow to make a call on the official cash rate. The decision will take into account the latest quarterly inflation data released last week, where the consumer price index unexpectedly rose 0.7% for the three months to September, lifting the annual inflation rate to 1.3% from 1%.

CommSec stated that financial markets' pricing suggested a 4% chance of a rate cut, following the inflation figures.

The US earnings reporting season enters its third week, with 134 S&P 500 companies scheduled to publish their financial results this week, CommSec said.

Stock movers

Below are the five best- and worst-performing ASX 200 stocks for the week ended Friday, October 28.

Company/Index

ASX code

Weekly price change

Aconex

ACX

+10.5%

OZ Minerals

OZL

+8%

Infigen Energy

IFN

+7.7%

Fortescue Metals Group

FMG

+7.6%

Rio Tinto

RIO

+5.5%

S&P/ASX 200

XJO

-2.7%

AMP

AMP

-11.5%

Resolute Mining

RSG

-11.8%

APN News & Media

APN

-15%

Bega Cheese

BGA

-22.1%

Ardent Leisure

AAD

-22.1%

Past performance is not a reliable indicator of future performance. Source: Bloomberg

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. The inclusion of companies in this article does not constitute a recommendation and it’s vital to remember that the value of shares in any company can fall as well as rise, which means you could lose money by investing in them. Investors should consult a range of resources, and if necessary, seek professional advice, before making investment decisions in regard to their objectives, financial and taxation situations and needs because these have not been taken into account. Any securities or prices used in the examples given are for illustrative purposes only and should not be considered as a recommendation to buy, sell or hold. Past performance is not indicative of future performance. Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 and a Participant of the ASX Group and Chi-X Australia.