Closing Bell: Aussie dollar climbs and ASX pares back gains on inflation data

Both the Australian dollar and the ASX have made gains following today’s inflation read, which has all but locked-in an interest rate cut for the RBA’s May meeting.

Both the Aussie dollar and the ASX made gains today, supported by a positive inflation data reading which will likely spell a rate cut for May. Pic: Getty Images.

• ASX pares back early gains to settle up 0.69pc

• Inflation marginally exceeds forecast (0.9pc vs 0.8pc)

• Australian dollar climbs to around US$0.6395

The ASX had a bit of a wobble after today’s inflation data came in marginally higher than expected, tipping up 0.9% instead of 0.8% for a steady annual rate of 2.4%.

More importantly, trimmed core inflation – the Reserve Bank’s preferred inflation metric – nudged under the RBA’s 2-3% target for the first time in three years, settling at 2.9%.

The numbers have convinced markets a 25-basis-point interest rate reduction is all but guaranteed for the RBA’s May meeting, with predictions of another four cuts on the cards throughout the rest of the year.

While the RBA has been hawkish on rate cuts since Michele Bullock took the helm, deflationary pressures from the ongoing international trade war are no doubt on their minds.

"We view an RBA rate cut of 25bp in May as a near certainty, given the downside risks to global and domestic growth stemming from global trade policy uncertainty and the inflation outcomes over the past two quarters," ANZ senior economist Adelaide Timbrell wrote in a note.

Turning back to the market, the ASX has lifted 0.69% during today’s trading, supported by strength in the Info Tech, Real Estate, Discretionary and Health Care sectors.

Source: Market Index

The ASX 200 Banks index also rose 1.37%, alongside a 1.22% uptick by the All Technology.

Source: Market Index

Commonwealth Bank (ASX:CBA) gained 2.22%, standing out from more modest gains by other major banks. They were joined by Suncorp (ASX:SUN), up 2.27% and Insurance Australia (ASX:IAG), up 1.36%.

Over in the tech sector, Life360 (ASX:360) gained 2.67% and Megaport (ASX:MP1) 3.44%. Big caps WiseTech (ASX:WTC), Xero (ASX:XRO), Technology One (ASX:TNE) and NextDC (ASX:NXT) all lifted between 1.05% and 2.45%.

ASX SMALL CAP LEADERS

Today’s best performing small cap stocks:

Security	Description	Last	%	Volume	MktCap
MOM	Moab Minerals Ltd	0.0015	50%	245980	$1,733,666
JLL	Jindalee Lithium Ltd	0.58	41%	696836	$30,172,658
SKK	Stakk Limited	0.007	40%	305663	$10,375,398
ERA	Energy Resources	0.002	33%	4901144	$608,094,361
WOA	Wide Open Agricultur	0.0355	31%	34887241	$14,409,538
ALM	Alma Metals Ltd	0.005	25%	4005600	$6,345,381
CYQ	Cycliq Group Ltd	0.0025	25%	249999	$921,033
ERL	Empire Resources	0.005	25%	500000	$5,935,653
OVT	Ovanti Limited	0.005	25%	4147687	$10,806,191
WHK	Whitehawk Limited	0.016	23%	7400433	$9,354,933
OSX	Osteopore Limited	0.018	20%	4460326	$2,283,284
BMR	Ballymore Resources	0.12	20%	182966	$17,673,059
1AI	Algorae Pharma	0.006	20%	1455146	$8,436,974
AZL	Arizona Lithium Ltd	0.006	20%	5190549	$22,809,073
LMG	Latrobe Magnesium	0.012	20%	10632106	$25,485,374
PV1	Provaris Energy Ltd	0.012	20%	758334	$6,980,013
SMM	Somerset Minerals	0.012	20%	6678247	$3,271,122
TMX	Terrain Minerals	0.003	20%	1000000	$5,008,892
REM	Remsensetechnologies	0.062	19%	1383821	$8,696,167
SVG	Savannah Goldfields	0.025	19%	1120359	$18,263,918
NUC	Nuchev Limited	0.19	19%	7784	$23,414,288
ECS	ECS Botanics Holding	0.013	18%	3350172	$14,256,545
NMT	Neometals Ltd	0.075	17%	1936292	$49,243,205
AKN	Auking Mining Ltd	0.007	17%	500000	$3,448,673
CRR	Critical Resources	0.0035	17%	2019002	$7,842,664

Making news…

Wide Open Agriculture (ASX:WOA) has signed a deal with Univar Solutions China, naming it the exclusive distributor of its lupin protein products across mainland China. Univar’s no small player, it’s the second-biggest ingredient distributor in the world, pulling in over $11 billion in sales last year. Under the deal, Univar has agreed to buy at least 50 tonnes of lupin protein over 12 months (after a 6-month prep phase), with pricing to be sorted between the two.

Arizona Lithium (ASX:AZL) is powering ahead with its Prairie Project in Canada, locking in approvals to kick off brine production and raising $1.3 million to fund its first facility. It’s also reworking plans at Big Sandy alongside key shareholder NTEC. With DLE tech in hand and the lithium market tipped to bounce back, AZL reckons it’s in prime position to make a splash.

Strong exploration potential and the formal acquisition of the Coppermine project have delighted Somerset Minerals (ASX:SMM) investors. The company has drummed up 15 anomalous copper zones on the project tenure, with at least five coinciding with other indicators of mineralisation, including positive historical drilling, surface exploration and geophysical results.

A cash flow positive quarter achieving net cash of $420k and customer cash receipts of $1.403m boosted RemSense Technologies (ASX:REM) shares after the company released its quarterly report. Major customer Woodside Energy also renewed its virtualplant subscription during the quarter, alongside Newmont Mining. REM says it's discussing a global rollout across all Newmont Mining operations with the major gold production company.

ASX SMALL CAP LAGGARDS

Today’s worse performing small cap stocks:

Code	Name	Price	% Change	Volume	Market Cap
ICU	Investor Centre Ltd	0.001	-50%	103990	$609,023
IVT	Inventis Limited	0.01	-38%	51005	$1,222,790
EEL	Enrg Elements Ltd	0.001	-33%	6454216	$4,880,668
WEL	Winchester Energy	0.001	-33%	100000	$2,044,528
3DP	Pointerra Limited	0.06	-28%	9513299	$66,821,374
NC6	Nanollose Limited	0.034	-28%	2056610	$10,950,168
1TT	Thrive Tribe Tech	0.0015	-25%	3112589	$4,063,446
88E	88 Energy Ltd	0.0015	-25%	1976288	$57,867,624
CT1	Constellation Tech	0.0015	-25%	1000000	$2,949,467
GMN	Gold Mountain Ltd	0.0015	-25%	433530	$9,591,960
M2R	Miramar	0.003	-25%	7372978	$3,987,293
RFA	Rare Foods Australia	0.006	-25%	362307	$2,175,866
TFL	Tasfoods Ltd	0.003	-25%	60261	$1,748,382
MAP	Microbalifesciences	0.17	-24%	763535	$100,766,695
GSM	Golden State Mining	0.007	-22%	426513	$2,514,336
TMS	Tennant Minerals Ltd	0.007	-22%	3058097	$8,603,014
ODE	Odessa Minerals Ltd	0.0055	-21%	1838502	$11,196,728
VAR	Variscan Mines Ltd	0.0055	-21%	3877994	$5,480,004
ASR	Asra Minerals Ltd	0.002	-20%	7556077	$6,765,117
BLZ	Blaze Minerals Ltd	0.002	-20%	700000	$3,917,370
C7A	Clara Resources	0.004	-20%	6962	$2,558,021
HLX	Helix Resources	0.002	-20%	160999	$8,410,484
MGU	Magnum Mining & Exp	0.004	-20%	139999	$4,046,807
MMR	Mec Resources	0.004	-20%	2558333	$9,248,829
PHL	Propell Holdings Ltd	0.008	-20%	125431	$2,783,381

IN CASE YOU MISSED IT

Hot Chili (ASX:HCH) has taken a step toward obtaining priority status for both its Costa Fuego copper-gold project and Huasco water project in Chile, after securing registration with the Office for Sustainable Project Management of the Chilean Ministry of Economy. Both projects fulfilled key requirements to be considered in the government’s list of strategic investment projects to be expedited through a streamlined approval process.

In an effort to focus resources on the flagship Yarramba uranium project, Koba Resources (ASX:KOB) has entered into agreements to offload 100% of its interest in the Harrier uranium project in Newfoundland and Labrador to Azincourt Energy Corp in return for C$50,000 and 30m Azincourt shares.

Silver Mines (ASX:SVL) submitted an application with the Department of Planning, Housing and Infrastructure to determine whether a transmission line to power the Bowdens Silver project forms part of a single proposed development in an ongoing effort to reinstate development consent for the project. The development application itself remains alive, with the final decision to be made by the consent authority, the NSW Independent Planning Commission.

Refurbishment of the Casposo toll milling track is on schedule, supporting a binding agreement between Challenger Gold (ASX:CEL) and the plant operator to process a minimum of 450,000t of material from the Hualilan gold project over three years. CEL is looking to capitalise on current high gold prices.

Trading Halts

AdAlta (ASX:1AD) – evaluate financing opportunities
Advance Metals (ASX:AVM) – cap raise
Arika Resources (ASX:ARI) – cap raise
Clime Investment Management (ASX:CIW) – distribution deal with a US based fund manager
Dreadnought Resources (ASX:DRE) – farm-in and joint venture agreement
Equinox Resources (ASX:EQN) – cap raise
Opyl (ASX:OPL) – cap raise
Red Mountain Mining (ASX:RMX) – cap raise

At Stockhead, we tell it like it is. While Hot Chili, Koba Resources, Silver Mines and Challenger Gold are Stockhead advertisers, they did not sponsor this article.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

Originally published as Closing Bell: Aussie dollar climbs and ASX pares back gains on inflation data