ASX extends slump as rates rally runs out of puff – Sydney Morning Herald

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VanEck deputy head of investments and capital markets, Jamie Hannah, said he expected the Reserve Bank to lift interests rates by 50 basis points next month, with the solid jobs figures highlighting the lack of spare capacity in the Australian economy.

“We may not see Australian official rates rise as much as US rates as our inflation rate isn’t quite as high.

Our view is that Australia’s share market is likely to continue outperforming the US share market, with the heavyweight resources companies benefitting from higher commodity prices,” Hannah said.

BetaShares chief economist David Bassanese has predicted the United States will enter a recession within the next year, but says Australia may avoid a similar fate.

“While I am still hopeful the Australian economy can avoid recession, it is at least a 40 per cent risk in the coming 12 months,” Bassanese said.

Meanwhile, Link Administration Services suffered one of the biggest slips of the session, declining by more than 10 per cent after the Australian Competition and Consumer Commission (ACCC) said it had significant concerns about Canadian suitor Dye & Durham’s proposed $2.9 billion acquisition of the company.

Tweet of the day:

Quote of the day: “The worst mistake we could make would be to fail – it’s not an option – we have to restore price stability. It’s the bedrock of the economy. If you don’t have price stability, the economy is really not going to work the way it’s supposed to,” US Federal Reserve chair Jerome Powell said.

You may have missed: New Zealand’s economy unexpectedly contracted in the first quarter of this year, with GDP falling by 0.2 per cent amid rising interest rates and the Omicron COVID-19 wave.

The Reserve Bank of New Zealand had forecast growth of 0.7 per cent for the quarter, with a fall in exports overriding strong domestic spending, according to Statistics NZ figures. New Zealand was one of the first developed economies to begin to raise interest rates in response to inflation in October last year.

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