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ASX to open higher as iron ore sinks

·2-min read
The board at the ASX showing company movements and a truck at an iron ore mine.
The ASX is expected to open higher today despite iron ore tanking as China's demand slows (Source: Getty)

Good morning.

Here is your Friday morning wrap.

ASX: The local market is set to open higher after the big tech giants propelled the US overnight.

Iron ore: This comes after heavy losses continued for Aussie iron ore giants, contributing to a fourth consecutive ASX loss in yesterday's session.

BHP and Fortescue each lost more than 6 per cent as China's reduced appetite for steel caused the iron ore price to keep falling.

Wall St: The S&P 500 rose in choppy trading, with gains in tech shares countering losses, as investors took the pulse of the economic rebound.

Tech also supported the Nasdaq on Thursday, while economically sensitive sectors such as energy and materials were weak.

Economic update: The RBA is set to give an update on Australia’s economic outlook today as Assistant Governor Christopher Kent is set to speak at the FX Markets 2021 conference today.

The RBA had been reasonably upbeat about Australia’s ability to stage another economic recovery, however things have changed drastically since the last board meeting.

Just after the August board meeting, RBA governor Philip Lowe told federal politicians an economic contraction of around 1 per cent could be expected in the September quarter.

Treasurer Josh Frydenberg now expects that contraction could be 2 per cent or more.

Jobs numbers: This comes after the jobs data yesterday showed a fall in the unemployment rate despite 64,000 jobs lost in NSW alone in just the first two week of July.

The numbers are expected to get worse for next month's release, which will include the worst of the pandemic.

Skills shortage: According to recruitment experts, Australia is suffering from a shortage of critical skills, a nation-wide issue that predated COVID-19 but has now been pushed over the edge.

So, where are the jobs and why can’t we fill them?

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