Closing Bell 21st November: ASX Climbs with Mining Boost and China Stimulus, US Stocks Surge on Microsoft’s Record High

RBA Minutes Indicate Further Rate Rises Dependent on Data

The Reserve Bank of Australia’s November policy meeting minutes revealed considerations for additional rate hikes, contingent on future economic data. The decision to raise the cash rate to 4.35% was influenced by higher-than-expected underlying inflation in the September quarter, broad inflationary pressures, and resilient domestic demand. The RBA noted that bringing demand and supply into balance would take longer than anticipated, necessitating potentially one to two more rate increases. Concerns were raised about rising inflation expectations in financial markets and the mindset among businesses to pass on cost increases to consumers. The RBA emphasized the importance of preventing a significant rise in inflation expectations and acknowledged the varying impacts of their decisions on household finances.

Michele Bullock Addresses Inflation Concerns Amid Economic Optimism

At the ASIC Forum in Melbourne, Reserve Bank governor Michele Bullock expressed optimism about the Australian economy, highlighting the labor market’s inclusivity and businesses’ agility post-pandemic. However, she voiced concerns about inflation, describing the current period as a critical juncture. Bullock’s comments reflect the delicate balance the RBA faces in managing inflationary pressures while maintaining economic growth and stability.

Iron Ore Prices Surge to $US133 a Ton

Iron ore prices experienced a significant increase, reaching $US133.75 per tonne, driven by expectations of easing measures and increased construction activity in China. This surge positively impacted major mining companies like BHP Group, Rio Tinto, and Fortescue Metals, which saw notable gains in their stock prices. The market’s optimism was further bolstered by potential supply disruptions due to industrial action by BHP train drivers. This development indicates a robust demand for iron ore, influenced by China’s economic policies and market dynamics.