ASX 200 afternoon report: September 5, 2023

The ASX 200 trades 22 points (-0.31%) lower at 7296 at 3.30 pm AEST.

RBA holds rates steady

The ASX200 has given back over half of Monday's gains as optimism around easing measures in China faded, despite the RBA keeping rates on hold this afternoon at 4.10% for a third consecutive month.

The RBA's decision to keep rates on hold provides further time to assess the impact of a cumulative 400bp of rate hikes and evidence that a sustainable rebalancing between supply and demand is underway.

Inflation outlook and economic rebalancing

Although the RBA displayed more comfort around the inflation outlook, it retained its tightening bias, noting, "Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe" and that inflation "is still too high and will remain so for some time yet."

Recent data has fallen the way the RBA would have hoped. While RBA Governor Lowe may have been slow to start hiking rates, he departs with his head held high, knowing that much of the heavy lifting required to bring inflation under control is in place ahead of Michele Bullock's tenure.

Headline inflation recently eased to 4.9% YoY in July, down from a peak of 8.4% YoY in December, and a much-feared wage breakout has failed to materialise. Finally, the release of the national accounts tomorrow is expected to confirm the slowest rate of growth since the December quarter of 2020.

Qantas CEO's early departure

Apart from the RBA, today's big news was that Qantas CEO Alan Joyce will leave Qantas two months earlier than planned. Joyce's position had become untenable, and his departure was a prerequisite to end the latest drama before the airline could restore its battered image amongst policymakers, regulators, shareholders, and customers.

Qantas share price is trading 2c lower at $5.63, which suggests the market might be looking for the scalp of a Board member before it is appeased.

The ASX 200 market movements today

• Financial sector

Elsewhere, the banks are trading lower despite the RBA's decision to keep rates on hold.

• Westpac: -1.33% to $21.53
• Macquarie: -0.7% to $176.41
• ANZ: -0.2% to $25.14
• NAB: -0.12% to $28.91
• CBA: Traded slightly higher at $102.06
  

• Mining sector

The share price of Fortescue continues to flounder, trading down -0.92% at $20.01 after it lost a third high-profile board member last week. Former RBA deputy Governor Guy Debelle left the organisation, joining the recently departed CEO Fiona Hick and CFO Christine Morris.

• Mineral Resources: -0.7% at $73.36
• Rio Tinto: -0.13% at $116.95
• BHP: +0.04% at $45.96

ASX 200 technical analysis

Besides a five-day trading window in late July/early August and two days in early July, the ASX 200 has spent the past five months trading sideways between 7370 and 7050ish. We expect that range to hold for a few more weeks before the ASX 200 makes its move.

ASX 200 daily chart

• _{TradingView: the figures stated are as of September 5, 2023. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}