Cool inflation print warms investor hearts, lifts ASX

The news: The Australian sharemarket finished higher on Wednesday after October inflation figures came in cooler than expected following three months of rises. The easing price growth will take pressure of the Reserve Bank and increase the likelihood of a hold at next week's cash rate meeting. The benchmark ASX 200 lifted 0.29% to 7,035.30, with the broader All Ordinaries increasing by 0.31%.

The numbers: The Aussie dollar has continued to gain against the greenback, trading above 66 US cents for the second day in a row to buy 66.5 US cents by Wednesday afternoon. Oil traded in a tight range ahead of an OPEC+ supply meeting tomorrow, with Brent crude futures losing 3 cents to trade at USD81.65 a barrel and West Texas trading at roughly USD76.50. Sectors were mixed with strong performances in IT stocks (+2.1%) and health care stocks (+1.8%), while consumer discretionary stocks gained 1.6% following strong trading updates following the Black Friday trading period. Energy stocks (-0.8%), utilities (-0.6%) and financials stocks (-0.4) lost ground.

The context: Investor confidence is building the US Federal Reserve will cut rates in the first half of 2024, which today pushed the US dollar to its lowest levels since early August and lifted gold to more than six-month highs of USD2045 an ounce.

The ABS will publish monthly building approval data tomorrow. Further abroad, German and Spanish CPI figures are due tonight, and manufacturing PMI data from China prints tomorrow afternoon ahead of key US inflation and unemployment data overnight on Friday.