The ASX 200 (ASX: XJO) had been steadily trading lower since Monday, albeit mostly flat, until a surprise 0.25% RBA rate rise yesterday afternoon saw markets take a hit, closing 0.92% lower on Tuesday.

While inflation has passed its peak, according to the RBA, 7% is “still too high”, Treasurer Philip Lowe said in his statement. 

This translated to 10 out of 11 sectors in the XJO finishing in the red. Real Estate sector was particularly hit hard, as is often the case with interest rate hikes, falling 2.12% for the day.

Having said this, the gold price was supported overnight, rising 1.6%, while Iron Ore was also up, finishing 2.3% higher. This could be a combination of factors: a weaker US Dollar coupled with gold being viewed as a safe haven asset in times of economic uncertainty.

In terms of upcoming economic data, the US Federal Reserve will hand down its interest rate decision tomorrow morning (6pm GMT) Thursday 4th May, for which most economists predict a 25 basis point increase from 5% to 5.25%. There is also an update on inflation in the Eurozone, which will impact future Monetary Policy decisions in Europe. 

The XJO Bounced off strong resistance around 7364 and has moved lower especially in the last 2 sessions down over 1.8% in the last 7 days. Futures continue to move lower on surprise RBA rate rise and the recent failure of First Republic Bank in the US. The decline has seen volatility move higher from a low of 10.65% to 11.37%. 

As mentioned previously the XJO has found resistance around the 7,364 level, with the reversal we have seen the XJO fall through support at the 50-day MA (7,200). The next major multi month support level being the 6946 level. 

Locally, we have retail trade figures out which will determine the state of our discretionary spending as a result of high inflation.

We have an upcoming investor briefing with an Aussie company offering the only security and surveillance solution that can sense, think and act – without needing people, data cables or power cords. Spectur Limited (ASX: SP3) is used by institutions such as Optus, Surf Life Saving and the Department of Defence and was recently highlighted by Martin Pretty of Equitable Investors as a favourite stock.

Tomorrow, Thursday 4th May at 12pm (AEST), we will be joined by Managing Director Dr Gerard Dyson who will discuss Spectur’s Q3 FY23 results, including the acquisition of 3 Crowns Technologies and Spectur NZ, and how the company is focused on generating revenue and its growing sales pipeline of institutional contracts. Click here to book your spot or request the replay.

Past performance is not a reliable indicator of future performance.

Reach Corporate provides Corporate Advisory Services, including managing investor communications on behalf of Spectur Limited and will receive fees for its services.