Asx Closes On Rate Cuts Forecast

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Asx Closes On Rate Cuts Forecast

Asx Closes Near 7782 On Rate Cuts Forecast

During Thursday's session, the ASX 200 moved in a tight range and eventually closed at 7782 on a positive note. It appears that the index is under a little pressure after the recent employment rate.

On a seasonally adjusted basis, the employment rate during February was 116.5K, which was way higher than the forecast for 400,000, and the last value was 153,000.

Australian Unemployment Rate Down To 3.7%

The unemployment rate, also a key metric of the Australian labour market, came out at 3.7%, lower than the earlier reading of 4.1%. All of these things mean the RBA can still maintain its hawkish stance, and that's what happened as the central bank didn't change the interest rates, which now stand at 12 years high.

Despite the hawkish signals, the ASX 200 turned higher and gained 1%, following the rally seen on Wall Street. It appears that the ASX 200 is driving its strength all the way back to the USA, where the Fed has hinted at several rate cuts this year.

That's why even the S&P 500 turned higher and touched the 5200 level. Additionally, all the metals like Palladium, Gold, and Copper also showed upside.

However, the Australian equity market showed a decline as the Commonwealth Bank turned lower towards the 116 level, with a change of 0.42%.

Similarly, the National Australia Bank also declined by 0.54% and was seen near the 34.80 level. Westpac Bank, which is also a notable name, declined by 0.75% during the day.

Overall, the activity in the private sector of Australia painted a picture of resilience during March and showed a healthy expansion.

However, the optimism seen in the ASX 200 will be short-term as it was driven by the Federal Reserve. The bigger picture is that the RBA is still not ready to cut rates which is not a good news for the ASX 200.

That's why we believe that the long-term outlook for the ASX 200 is still geared towards the downside as opposed to the upside.

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