The ASX has posted its second-best start to a year in at least three decades as optimism grows around inflation and a rebound in China.
Westpac chief economist Bill Evans forecast that inflation data on Wednesday will show annual price increases eased to 7.4 per cent, and headline inflation will slow to 3.7 per cent this year – well below the Reserve Bank’s forecast of 4.7 per cent.
Wall Street’s tech-heavy Nasdaq 100 has jumped 6.4 per cent this year, with the Dow Jones Index 0.7 per cent higher, while Europe’s benchmark STOXX 600 Index is up 5.4 per cent year to date. “Each week, there is data reinforcing the resilience in the western world economies versus expectations, with clear signs of inflation continuing to fall,” Mr Boubouras said.December quarter inflation data out on Wednesday is expected to sandbag financial markets’ confidence the tide is ebbing on inflation after a series of strong results.
JPMorgan Australia chief economist Ben Jarman said there was likely to be some meaningful areas of persistence that would make a sustained return to the target band in 2023 unlikely. For example,climbed 9.2 per cent in the December quarter. Financial markets are pricing in a cash rate peak of 3.6 per cent, according to the 30-day interbank rate futures implied yield curve, down from 3.9 per cent earlier in the month.
K2 Asset Management is overweight globally in energy, materials, and metals stocks because the sectors are viewed as key to the energy transition.
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