AU Morning Wrap: ASX falls ahead of RBA rate decision; Magellan FUM down $2.5b

Wall Street Summary
US stocks slumped after services-sector data added to concerns this year's aggressive interest rate increases have yet to have a significant impact on inflationary pressures. Following unexpectedly robust jobs data on Friday, the services report appeared to increase pressure on the Fed to raise rates higher and for longer.

A measure of business conditions in the US services sector climbed to 56.5 per cent last month from 54.4 per cent in October, a sign the economy was still growing strongly.

Interest-rate-sensitive tech stocks bore the brunt of the declines, down 2.3 per cent. Energy stocks fell 1.3 per cent as West Texas Intermediate futures shed 3.8 per cent to settle below $US77 a barrel after earlier topping $US82 on Monday.

Communication services and industrials were up around 0.3 per cent.

Australia's Reserve Bank is widely expected to raise interest rates by 0.25 of a percentage point when it meets today, bringing the official cash rate to 3.1 per cent.

A quarterly ACCC report shows the average revenue per passenger was 27 per cent higher in October 2022 than it was in October 2019 due to “strong demand for travel and constrained supply as airlines have scaled back their schedules in response to high jet fuel costs and operational challenges”.

Securities will remain in trading halt until December 8 or when the announcement is released to the market.

Investors pulled $2.5 billion from the funds last month comprising $600 million of net retail outflows and $1.9 billion of institutional money.

Dividends Paid: None

Commodities
• Newcastle coal futures rose 2.3% to US$400.0 a tonne.

Iron ore futures fell 1.9% to US$106.5 a tonne.

Global steel production totaled 147.3 million tonnes in October, down 3% month-on-month but up 1.0% compared to a year ago, according to Breakwave Advisors

"Global crude steel production has now increased on a year-on-year basis for two straight months after previously contracting on a year-on-year basis for twelve straight months. However, the growth remains almost entirely due to growth in China’s crude steel production." - Breakwave Advisors

• Oil prices tumbled as the G7 price cap of US$60 a barrel goes live against Russian oil exports. Russia said it will refuse to export to countries abiding to the cap.

• Gold sold off sharply as the US dollar and bond yields bounced.

"The risk of more Fed tightening due to strong wage pressures is clearly not going away. Gold has a nice run and investors will be quick to lock in profits if the bond market selloff accelerates." - Oanda senior market analyst, Ed Moya