​EBC Markets Briefing | Aussie dollar flat; Micron Technology extended gains

USD steadied as oil eased, boosting risk appetite. AUD steadied post-RBA rate hike. Iran tensions, China demand, and technicals suggest cautious short-term AUD outlook.

The US dollar took a breather on Wednesday as easing crude oil prices sparked a glimmer of risk appetite in the markets. Meanwhile, the Australian dollar steadied following the rate decision.

The RBA raised its main cash rate for a second straight month, saying higher borrowing costs were needed to contain inflation, though a very tight vote suggested further tightening would be a ⁠close call.

Markets have ⁠been wagering on a hike after top RBA officials warned the meeting would be "live" ⁠given core inflation of 3.4% was stubbornly above the ⁠central bank's target range of 2% to 3%.

Iran intensified attacks against US assets in the Middle East and Israel in apparent retaliation against the killing of the country's security chief Ali Larijani overnight, as the conflict shows no signs of abating.

Trump said that he would delay his trip to China for "five or six weeks," officially pushing the major summit after administration officials opened the door to the trip's postponement as they focus on Iran.

China's economy started on a strong footing this year, with consumption and production both beating expectations as holiday spending and strong foreign demand provided an early boost – a boon to Australian exports.

The Australian dollar stayed firmly above 50 SMA, but a bearish MACD divergence painted a dim picture. As such, a decline below $0.7030 cannot be ruled out in the short term.

Asset recap

As of market close on 17 March, among EBC major products, Micron Technology shares still led gains. The company plans a new factory in Taiwan to expand memory chip production.

Eli Lilly and Co was weighed down by downgrade. HSBC turned bearish on the stock, for the second time in a year, saying investor expectations for weight-loss drugs are overinflated.

Oil and gas prices rose again after Iran carried out attacks on production facilities for the first time since the start of the war. The UAE said a drone struck the Shah natural gasfield.

EBC Financial Group Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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