Morning Wrap: ASX 200 to fall, Australian Dollar falls after RBA language pivot, US CPI in focus tonight

Although the RBA held interest rates yesterday, they finally jumped off the non-committal fence when they retired the phrase "not ruling anything in or out." At the press conference, Governor Michele Bullock said that while the war against inflation was not won yet, they finally had more confidence that things are moving in the right direction. The news sent the Australian Dollar south and the equity market north. Now, all eyes turn to the ECB (who is likely to cut rates by 25 basis points), and even more importantly, the US inflation report.

Let's dive in.

S&P 500 SESSION CHART

A steady slide for the S&P 500 - Did the Santa rally come early again this year? (Source: TradingView)

OVERNIGHT MARKETS

• US equities ended lower and near worst levels in Tuesday trading. Big tech was a cushion; group was mixed though Alphabet and Tesla were notable gainers.

• Treasuries were weaker across the curve. US Dollar Index was up 0.2%.

• Gold finished up 1.2%. Bitcoin futures were up 0.2%. WTI crude settled up 0.3%.

MARKETS

• Jefferies says small caps are poised to outperform large stocks for the first time in eight years (CNBC)

• Loosening regulations poised to revive corporate dealmaking in Trump era (Bloomberg)

STOCKS

• Citigroup expects a 25% to 30% rise in investment banking fees in the fourth quarter (Reuters)

• JPMorgan Chase expects NII [net interest income] to beat expectations next year (Bloomberg)

• Boeing says it has resumed production of 737 MAX after 53-day long labour strike (Bloomberg)

• Microsoft shareholders vote against company investing in Bitcoin (Quartz)

• Walgreens reportedly in talks to sell itself to private equity firm Sycamore Partners (Bloomberg)

• Proxy advisers tell clients to vote against ANZ's remuneration report (AFR)

EARNINGS

• Oracle's Q2 results fall just short of elevated expectations (Bloomberg)

• China to investigate Nvidia over 2020 deal that may have broken anti-monopoly laws (NY Times, Bloomberg)

• TSMC sales rise 34% in November, reflecting sustained growth from AI demand (Bloomberg)

• Stellantis and Chinese battery maker CATL to build the EV gigafactory in Spain for $4.33B (Reuters)

GEOPOLITICS

• Taiwan's defense ministry says large Chinese military force has been detected nearby; unclear if drill (NPR)

• New commerce chief in Syria says country will become a free market economy (Reuters)

• Israel to impose defense security buffer in southern Syria (Reuters)

• Ukraine's Zelenskiy seeks diplomatic end to Russia's war, raises idea of foreign troops (Reuters)

• Canada PM Trudeau pledges to respond if Trump imposes tariffs (Bloomberg)

ECONOMY

• Chinese Politburo signals it is ready to deploy any stimulus needed to counter US trade-tariff war (Reuters)

• Florida orange production forecast to fall to lowest since 1930 on hurricane impact (Bloomberg)

BROKER MOVES

• Pilbara Minerals upgraded to buy from hold at Bell Potter, target price of $2.95 (implying 29% upside)

• James Hardie Industries initiated buy at US bank Truist, target price of $45 (implying 27% upside)

• Generation Development Group initiated overweight at Morgan Stanley, target price of $4.75 (implying 25% upside)

Stocks trading ex-dividend: 

• Wed 11 Dec: WCM Global Growth Limited (WCG) - 1.09%

• Fri 13 Dec: Metcash (MTS) - 2.54%

• Mon 16 Dec: Plato Income Maximiser (PL8) - 0.45%

• Tue 17 Dec: Elders (ELD) - 2.37%

Economic calendar (AEDT):

• Overnight: US CPI, Bank of Canada interest rate decision