CPI Rises & So Might Rates This Cup Day – 25th October

Markets were tracking higher in the morning, but a stronger-than-expected quarterly CPI report pushed markets lower as reality set in that another rate rise by the RBA looks more likely by the day. The ASX200 index ended the day down 2.6 points or 0.04% to 6,854.30.

The September Quarterly CPI figure came in slightly higher than expected, with markets now seemingly pricing in at least one more rate rise before the end of the year. The most significant price increases from the previous quarter were Automotive fuel (+7.2%), Rent (+2.2%), New dwelling purchases by owner-occupiers (+1.3%) and Electricity (+4.2%). Economists from CBA, NAB and ANZ expect the RBA to raise rates at the next meeting on November 7.

From a sector standpoint, Materials (+1.62%) and Telco (+0.79%) finished higher. Iron Ore futures rose to US$119.00, with BHP (+2.6%), Fortescue Metals (+3.1%) and Rio Tinto (+2.3%) all rising. The interest rate sensitive REITS (-2.0%) sector was hit hardest today, with Goodman Group (-1.6%), Scentre Group (-2.8%) and Stockland (-0.8%) all finishing lower.

WTI crude oil futures remained steady at US$83 per barrel, while Gold prices are trading at US$1,972.40/oz.

A busy day of earnings reports both in Australia and overseas. We have two dedicated sections in today’s newsletter covering the companies that reported.