ASX 200 afternoon report: 14 September 2023

The ASX 200 trades 38 points (0.53%) higher at 7192 at 3.10 pm AEST.

Trapped in a narrow range amidst uncertain economic data

The ASX 200 has spent its fifth straight session encapsulated within a very tight 70-point range between 721 on the top side and 7135 on the downside.

The lack of volatility follows data that fails to prove that economies are cooling sufficiently to allow central banks to rule off their respective rate-hiking cycles.

In the US, last night's consumer price index (CPI) report provided something for everyone. The annual headline inflation rate rose to 3.7% in August, firmer than the 3.6% expected. However, the annual core inflation rate eased for a fifth month to 4.3% from 4.7% in July. Low enough to keep the Federal Reserve Bank (Fed) on hold when it meets next week but still too far from the Fed's 2% inflation target to rule out a rate hike in November.

Australian jobs outperform expectations

The Australian labor force report for August delivered positive surprises as the economy added 64.9k jobs, exceeding the expected 25k. The unemployment rate remained stable at 3.7%, despite a rise in the participation rate to 67% from 66.9%.

The Australian Bureau of Statistics (ABS) noted that the significant increase in employment in August followed a minor drop in July, which was influenced by the school holiday period.

Taking a broader view, the labor market continues to display strength, even in the face of the Reserve Bank of Australia's (RBA) 400 basis points of rate hikes. However, today's data may not provide the RBA with the breathing room it was hoping for to conclude its rate hiking cycle.

The ASX 200 is seeing a boost today, primarily driven by the big mining companies, as the price of iron ore has surged to $120 per tonne. Fortescue, Rio Tinto, BHP, and Mineral Resources are among the leaders in these gains. Fortescue recorded a 3.62% increase to $20.30, Rio Tinto rose by 2.34% to $116.04, BHP gained 1.16% to $44.31, and Mineral Resources added 0.61% to $69.16.

Clean energy support grows, pushing up uranium share price

The drumbeat for uranium as a clean energy solution is growing louder, propelling the share prices of companies like Bannerman Energy, Deep Yellow, and Paladin Energy. Bannerman Energy surged by 8.9% to reach $2.57, while Deep Yellow gained 7.73% to hit $1.05, and Paladin Energy saw a 4.47% increase to $0.94c.

In the financial sector, the influential banking giants saw gains as bond yields eased following the release of US inflation data. ANZ rose by 1.2% to reach $25.63, NAB gained 1.14% to $29.31, Westpac added 1.84% to $21.66, CBA increased by 0.64% to $102.35, and Macquarie showed a modest rise of 0.3% to $172.63.

On another note, former buy now, pay later (BNPL) star Sezzle rebounded with a remarkable 12.77% increase, reaching $18.10 after hitting a fresh cycle low of $14.61 earlier in the week. Meanwhile, Myer's share price remained flat at $0.63, despite reporting solid FY23 profits, as concerns about slower growth in the second half weighed on the market's sentiment.

ASX 200 technical analysis

At the risk of sounding like a broken record, again, besides a five-day trading window in late July/early August and two days in early July, the ASX200 has spent the past five months trading sideways between 7370 and 7050ish.

We see no reason for that to change in the short term and expect further range trading over the next two weeks.

ASX 200 daily chart

• _{TradingView: the figures stated are as of September 14, 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.}