The Australian stock market closed higher after ANZ predicted that the Reserve Bank would raise the country’s official interest rate as early as 2023.
- The Australian stock market showed a slight increase towards the close of trading.
- ANZ predicted that the RBA would raise interest rates by 2023.
- Previous data suggests that the RBA will keep its interest rate at an all-time low of 0.1 percent until 2024.
The ASX 200 closed day trade 0.4% higher at 7,302, while the All Ordinaries closed half a percentage point higher at 7,558.
The leader of growth was Iress with a gain of 16.8%, the mining company Whitehaven grew by 5.1%, and the owner of the Westfield shopping center – by 3.8%.
In the red were NRW Holdings (-3.3%), A2 Milk (-3.3%) and Oil Search (-3.3%).
Worley closed 3.2% after an out-of-court settlement with Rio Tinto over a fire at an iron ore refinery in Western Australia.
Raising the ANZ tip rate
ANZ’s forecast is that as inflation rises, the RBA will tighten the money rate in two stages in the second half of 2023, to bring it to 0.5% by the end of the same year.
It is currently at an all-time low of 0.1 percent and has not reached 0.5 percent since the start of the pandemic in March 2020.
The central bank itself continues to predict that the historically low interest rate will remain “at least” until 2024.
ANZ noted that growth benchmarks, including inflation above 2 percent and wage growth above 3 percent, could be met by next year as unemployment declines and GDP rises.
“A tougher labor market will lead to higher wages and, ultimately, to higher inflation,” – wrote in the department of economics of the bank.
“The bands of uncertainty around our forecasts remain wider than usual.
“It is possible that the conditions for rate hikes will come even earlier than in the second half of 2023, if the recent trend of rapid economic improvement continues.
“But there is also the prospect that the recovery will be halted by COVID and the rate hike will be delayed.”
ACCC approves controversial Woolies deal
Woolworths is set to take over PFD, a distributor of whole foods, by June after the controversial move was approved by the ACCC.
The family-run PFD purchases food from producers and distributes it to businesses such as cafes, hotels and fast food restaurants.
Small business groups are lobbying for the $ 552 million acquisition of Woolworths because they argue it will create an even tighter grocery supply chain.
ACCC says some of PFD’s competitors have “expressed very serious concern” that the move will allow Woolworths to “aggressively expand food distribution and use its purchasing power in supermarkets to distribute food, including through the sale of private label products. via PFD “.
However, he announced this morning that he approved the takeover.
“Ultimately, the evidence presented to us does not indicate that the deal could significantly reduce competition,” said ACCC Chairman Rod Sims.
“There are very few vendors for whom both PFD and Woolworths represent a significant portion of their go-to-market channels.”
Woolworths shares rose 0.6% on the opening day.
In a statement to ASX, it was confirmed that the purchase will now proceed to June and that PFD will remain under the control of its CEO and founder of the family-owned company, Kerry Smith.
Greensill’s appeal denied
Today is another loss for the Greensill family, Bundaberg watermelon farmers who have built controversial financial businesses around the world.
The Australian Internal Revenue Service required Peter Greensill to pay for the capital gains earned from the sale of shares between 2015 and 2017. The Peter Greensill Family Foundation paid out 100 percent of the profits – $ 58 million – to Mr. Greensill, who lived abroad and was considered a foreign resident.
The ATO said that the Trust must pay tax on it. Mr. Greensill sued ATO and lost. He appealed against this decision.
Today he lost this too, and now he has to pay the costs of the ATO.
Peter Greensill has a stake in Greensill Capital, a finance company that took over in March.
In 2018, AFR included him on its Young Rich List with a net worth of $ 412 million.
The collapse of Greensill Capital, run by his older brother Lex, has jeopardized businesses around the world.
The ATO welcomed the verdict.
“The court decision clarifies the capital gains assessed by the trustee of a resident trust, where the trustee grants the non-resident beneficiary the right to receive that profit,” the spokesman said in a statement.
“The ATO cannot comment further on tax matters of any person or entity due to our confidentiality obligations under the law.”
Wall Street suppressed trade
On Wall Street, all major indices closed down 0.1-0.4% overnight.
Investors are awaiting the release of inflation data.
Central Bank analysts expect US data to affect currencies when they are released at 22:30 AEST tonight.
The US dollar fell and the yield on 10-year US Treasuries fell below 1.5% for the first time since March, the CBA said.
“Given the high expectations, a decline in the consumer price index below consensus could lead to a fall in the US dollar,” they said.
“In our opinion, the factors that led to the rise in inflation are considered short-term and therefore will not stimulate the FOMC. [Federal Open Market Committee] toughen up the policy soon.
“We continue to expect the FOMC to initiate discussions on asset purchase cuts at its policy meeting in July or September.
The Australian dollar was unchanged against the dollar at 77.31 US cents.