The Reserve Bank of Australia’s minutes from their December meeting were released today, revealing that a rate hike was considered but ultimately postponed due to limited data. The RBA deliberated over the decision to raise rates by 25 basis points, but ultimately decided to keep rates at 4.35%. This consideration was tied to expectations of prolonged inflation remaining above the 2% target, along with higher underlying inflation in Australia compared to other countries.
Meanwhile, Japanese conglomerate Nippon Steel saw a plunge of nearly 6% in the stock market after it announced an agreement to acquire U.S. Steel for $14.9 billion. This acquisition would allow Nippon Steel to expand its global crude steel capacity to 100 million metric tons.
Additionally, the Japanese yen showed signs of strengthening for the third consecutive day, with investors await the Bank of Japan’s decision on interest rates. It is anticipated that the central bank will maintain its negative interest rate policy, and the market will also monitor the BOJ’s stance on its yield curve control policy.
Furthermore, oil prices rose more than 1% due to shipping disruptions caused by attacks on vessels in the Red Sea. These events prompted BP to pause shipping through the Suez Canal in response to attacks by militants in Yemen on vessels in the Red Sea.
In the U.S., Fed President Austan Goolsbee expressed confusion about the market’s reaction to the central bank’s update from last week. He stated that the Fed is not actively planning a series of rate cuts, despite the speculation in the market.
Also, real estate and utilities underperformed in the S&P 500, with both sectors trading in negative territory. Real estate was down by 0.8%, while utilities declined by 0.6%.
Moreover, Bernstein senior research analyst Toni Sacconaghi noted that tech stocks could face increased pressure in 2024, but the firm is not moving to an underweight rating due to strong momentum and other contributing factors.