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Mixed start for ASX trading amid central bank meeting anticipation

A negative start for trading on the ASX today (Monday) after a small dip in the futures market on Friday, which came on top of a ‘red’ session earlier in the day and a downer on Wall Street.

But what happens today is going to matter not very much given the importance of three central bank meetings this week – the RBA today and tomorrow, the Fed tomorrow and Wednesday, and the Bank of Japan on Tuesday (see separate story).

Investors will be nervy and cautious ahead of these meetings today and for part of tomorrow – a trend we saw locally here on Friday and in the US later in the day.

As a result of the nervousness, the ASX 200 futures index is looking at a small 10 to 13 point fall for the start today.

But investors will have to deal with the slide in iron ore prices to new multi-month lows under $US100 a tonne in Singapore late Friday, but also another jump in copper prices (which will make picking price moves in BHP and Rio Tinto quite tough today with their portfolios of iron ore and copper mines).

A fall in the gold price won’t help local sentiment either, nor will a rise in the US 10-year bond yield to nearly 4.32%. The Aussie dollar was weaker around 65.60 US cents at the close early Saturday, Sydney time.

Friday saw the ASX 200 index lose 0.6% to end at 7,670.300 points. It dropped a nasty 2.3% for the week, its worst performance since late last September and a reminder of the underlying concerns about inflation and the pace of rate cuts (if any).

Miners and gold stocks declined 1.9% and 2.2%, respectively on Friday thanks to weakish prices.

Iron ore prices kept declining on weaker demand from China, compounded by the Chinese central bank’s decision to maintain its one-year medium-term lending facility loans rate at 2.50%.

Graphite producer Syrah Resources led the fall in miners, declining 19.9%, marking its worst fall since September 2022, following a discounted placement.

Among the gold miners, Emerald Resources shed 10.1%.

Financials ended 0.2% lower, with Westpac Banking, one of the traditional “Big-Four” banks, losing 1.1% after the ASX queried the bank about reports of a possible change in leadership. ‘Nothing happening here’ was the reply but the rumors persist.

And in a bit of good news from the embattled lithium sector, Arcadium Lithium says its mining operations and expansion activities at its Fenix and Sal de Vida projects in Argentina are not impacted by a court that stopped new mining permits over environmental concerns. The Court of Justice in the province of Catamarca, Argentina, temporarily suspended the issuance of new mining permits, demanding that fresh environmental impact studies be carried out on local lithium projects. The ruling involves the Los Patos River-Salar del Hombre Muerto area, where Arcadium – formerly Livent/Galaxy – has a project.

The decision follows rising tensions over water use with local communities in the region – concerns that continue elsewhere in the country and in Chile and Peru as well.

Arcadium added that all the company’s existing permits and environmental impact assessments (EIAs) remain valid.