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THe S&P/ASX 200 Index (ASX: XJO) had a rather flat day this Tuesday. At close, the ASX 200 is down 0.73% to 7,261.8 points. The days of 7,400 points that we saw (briefly) last month certainly look far away on these numbers. But let’s take a look at some of the ASX 200 shares that moved around on the markets today in terms of trading volume.

3 ASX 200 shares on the move today

Beach Energy Ltd (ASX: BPT)

There have been a substantial 12.97 million Beach shares traded on the share market today. At the same time, there were no major news or announcements that might have precipitated such a move. However, energy shares like Beach had a very strong day today.

Beach itself closed up a healthy 2.35% to $1.30 a share. My Fool colleague Brendon had a look at this earlier today. This might explain the high volume of Beach shares that found a new home this Tuesday.

Aventus Group (ASX: AVN)

Today has seen a whopping 31.11 million Aventus shares swap hands. That’s despite no major news or announcements coming out of the company. Well, almost.

My Fool colleague James reported today that company executive Brett Blundy has recently sold around 28.5 million shares (worth roughly $90.4 million) in a blocktrade. Perhaps as a result, the Aventus share price finished down a not-insignificant 4.85% today, closing at $3.14. It could be a combination of these developments that saw so many Aventus shares trade today.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

And the award for the ASX 200’s most traded share today goes to Sydney Airport. A very hefty 32.41 million shares swapped hands. A few things may have caused the high trading volume.

Sydney Airport had a very dramatic day indeed yesterday. Its share price jumped more than 35% after it revealed it had received a takeover offer from a consortium of large infrastructure investors. Saying that, its share price finished down 0.9% at $7.71 today.  Again, it’s likely a combination of these factors was behind all of those shares bouncing around today.

The post Here are 3 ASX 200 shares that were on the move today appeared first on The Motley Fool Australia.

More reading

• 3 companies that broke their way into the ASX 200 in FY21
• Why Appen, Aventus, HomeCo Daily Needs, & Ramelius are dropping
• The Cochlear (ASX:COH) share price drops 3% today
• Near all-time highs, why the ASX 200 could keep running higher
• Suncorp (ASX:SUN) share price bucks market downtrend on ~$84m divestment

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended AVENTUS RE UNIT. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Boral Limited (ASX: BLD) share price is now in the green after Seven Group Holdings Ltd (ASX: SVW) confirmed this afternoon that the requisite number of Boral shareholders sold to it so as to reach its desired goal of 34.5% ownership of Boral.

At close of trade today, shares in the construction materials company were selling for $7.39 – up 0.27%.

Let’s take a closer look at the latest updates.

Why the Boral share price is rising

Despite Boral’s board recommending shareholders reject the offer from Seven, it was confirmed that Seven’s ownership of the company increased from about 24.5% to 34.5%. Seven sent an initial offer of $6.50 per Boral share. This was quickly increased to two conditional offers.

• If it acquired 29.5% of Boral, it would pay $7.30 per share.
• If it acquired 34.5% of Boral, it would pay $7.40 per share.

Boral’s share price jumped on the news to new 52-week highs. Seven also extended its offer to 15 July to aid its bid.

Today’s news confirms Seven will pay the $7.40 per share. It will not be increasing its offer any further.

While Boral has not said anything about today’s developments, it is safe to assume the board is not pleased about it. When it asked owners to not sell, it said Seven’s bid was “opportunistic” and did not reflect fair value. Enough investors clearly disagreed.

Boral sold its North American building supplies business in an apparent attempt to stave off the sale. Seven later criticised the sale as “rushed” and claimed it was sold for a loss.

Boral share price snapshot

Over the past 12 months, the Boral share price has increased by 96.5%. Its 52-week high of $7.40 is on par with Seven’s offer and only 1 cent above its current market price.

If an investor was savvy enough to buy Boral at its COVID low of $1.79 a share, they would be sitting on an impressive 313% return on investment (ROI).

Given its current valuation, Boral has a market capitalisation of approximately $8.7 billion.

The post Boral (ASX: BLD) share price lifts as Seven gets increased stake appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most traded ASX 200 shares on the market today
• Boral (ASX:BLD) share price lifts, Board rejects increased offer from Seven
• The Calix (ASX:CXL) share price is rising 5% today. Here’s why
• Here are 3 ASX 200 shares making market moves today
• ASX construction shares like Brickworks (ASX:BKW) are falling today

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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On Monday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below. Here’s why these brokers are bearish on these ASX shares:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of Credit Suisse, its analysts have retained their sell rating but lifted their price target on this fresh milk and infant formula company’s shares to $5.50. The broker has increased its earnings estimates slightly to reflect better than expected demand for infant formula. However, despite this, its earnings estimates are below consensus. In addition, the broker has concerns over its daigou sales and a lack of product differentiation. The a2 Milk share price is fetching $6.69 today.

Commonwealth Bank of Australia (ASX: CBA)

A note out of Morgans reveals that its analysts have retained their reduce rating with an improved price target of $76.00. The broker is positive on the banks and expects better than expected net interest margins, cost reductions, and buybacks to be supportive. However, due to valuation reasons, the broker is holding firm with its reduce rating on CBA’s shares. It believes the multiples its shares are trading on are stretched. The CBA share price is trading at $98.77 today.

Magellan Financial Group Ltd (ASX: MFG)

Analysts at Morgan Stanley have retained their underweight rating and $39.60 price target on this fund manager’s shares. According to the note, the broker sees downside risk to fund inflows in FY 2022 and doesn’t believe this is being reflected in its share price. In addition to this, the broker believes its performance has been soft and notes that its shares are among the most expensive in the industry globally. The Magellan share price is trading at $53.80 on Tuesday.

The post Leading brokers name 3 ASX shares to sell today appeared first on The Motley Fool Australia.

More reading

• Here’s what leading brokers are saying about the Commonwealth Bank of Australia (ASX:CBA) share price in July 2021.
• A2 Milk (ASX:A2M) share price falling despite trademark settlement
• 2 fallen stars of ASX now worth buying: experts
• PEXA (ASX:PXA) share price jumps to new heights on first ‘normal’ trading day
• Why A2 Milk, Airtasker, BetMakers, & Sydney Airport shares are storming higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Bitcoin (CRYPTO: BTC) has rebounded from modest earlier losses to be up 1% over the past 24 hours.

One Bitcoin is currently worth US$34,611 (AU$45,540). That gives the world’s biggest crypto a market cap $649 billion.

That’s nothing to sneeze at. But it wasn’t too long ago – mid-April, in fact – when Bitcoin claimed a market cap north of US$1.1 trillion. At the time, it was still trading near its all time highs of US$64,829.

Year-to-date, Bitcoin remains up 18%. Again, nothing to sneeze at, if you can stomach the volatility.

But with some 4,000 cryptocurrencies in virtual circulation, we thought we’d turn the spotlight on today’s best performing crypto.

This little known token has gained 40 times more than Bitcoin today

While Bitcoin has gained 1% over the past 24 hours (which may well have changed by the time you read this!), KuCoin Token (CRYPTO: KCS) is up 41% over that same time.

One KuCoin is currently worth US$10.64. That gives it a market cap of US$852 million, ranking it as the 82nd biggest crypto, according to data from CoinMarketCap.

KuCoin is a relative veteran, by crypto standards. It’s been around since October 2017 and quickly rode the crypto bubble of the time to record highs above US$20 by January 2018.

And then… Well, you probably recall what happened when the bubble burst.

KuCoin’s price collapsed within months and spent the next 3 years trading around the US$1 range.

Until 2021 rolled around.

On 12 April this year, KuCoin hit a multi-year peak of US$19.29.

While it’s down considerably from there, KuCoin still handily beats Bitcoin’s year-to-date returns, with KuCoin gaining 1,420% so far in 2021.

What the heck does KuCoin do?

If you’re unfamiliar with KuCoin, don’t worry. Unlike Bitcoin or Ethereum (CRYPTO: ETH), even many crypto enthusiasts can’t name many of the smaller tokens.

So what the heck is the point of KuCoin’s existence?

For that, we turn to CoinMarketCap, which tells us the token was launched:

[A]s a profit-sharing token that allows traders to draw value from the exchange. It was issued as an ERC-20 token running on the Ethereum network and was supported by most Ethereum wallets. The total supply of KCS was set at 200 million, and there is a planned buyback and burn until just 100 million KCS remain. 

As with every cryptocurrency, KuCoin is highly volatile.

While it’s up over 40% today, there are no guarantees as to its performance tomorrow.

The post This little known token has gained 40 times more than Bitcoin today appeared first on The Motley Fool Australia.

More reading

• These 5 cryptos outperformed Bitcoin in FY21, delivering more than 2500%
• This is the only reason to invest in Bitcoin
• ASX 200 Weekly Wrap: ASX finishes FY21 on a high
• How Tyler Winklevoss plans to go green with Bitcoin
• ASIC just poured cold water on an ASX Bitcoin ETF

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Australia’s leading investment platform provider CommSec has released data on the most traded ASX shares on its platform from last week.

Here’s the data:

BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

This ethical ETF was the most traded share on CommSec last week and attributable to 2.2% of total trading volume. And despite 94% of the volume coming from buyers, it couldn’t stop the BetaShares Global Sustainability Leaders ETF share price from losing 3.3% of its value over the period. Though, the ETF is up by a solid 11% year to date.

Betashares Nasdaq 100 ETF (ASX: NDQ)

This ETF was popular with investors once again last week. The Betashares Nasdaq 100 ETF was responsible of 2.1% of trades on CommSec, with 89% of the volume from the buy side. The technology-focused ETF fell 1% over the week but recorded a 9.4% gain in June.

Zip Co Ltd (ASX: Z1P)

This buy now pay later (BNPL) provider remains popular with investors. Zip’s shares were involved in 2% of trades on CommSec. Approximately 60% of the volume came from buyers. However, it will have been the sellers that were the happier group. The Zip share price fell 7.5% last week. This was possibly due to concerns that Afterpay could win market share from it in the US with its new pay anywhere offering.

AGL Energy Limited (ASX: AGL)

This energy company’s shares were heavily traded last week and responsible for 1.4% of trades on CommSec. This followed an announcement by AGL which revealed that it has firm plans to split into two separate companies – Accel Energy and AGL Australia. And although buyers were responsible for 70% of the volume, it wasn’t enough to stop the AGL share price dropping 10% last week.

iShares Core S&P/ASX 200 ETF (ASX: IOZ)

Finally, a third ETF was popular with investors. It was involved in 1.4% of trades on CommSec last week, with a massive 90% of the volume from buyers. The ETF was largely flat last week but up 2.2% in June.

The post AGL and Zip shares were among the most traded ASX shares last week appeared first on The Motley Fool Australia.

More reading

• 3 companies that broke their way into the ASX 200 in FY21
• These are the 10 most shorted shares on the ASX
• Got Sezzle (ASX:SZL) shares? What’s in store for FY22?
• ASX 200 Weekly Wrap: ASX finishes FY21 on a high
• 2 ETFs that could be buys in July 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended BETANASDAQ ETF UNITS and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) had a wild ride in the last financial year. Emerging from the depths of the COVID market crash, the index ended up gaining nearly 1,400 points – or a record 23.4% – over the 12 months. The index eventually surpassed its pre-coronavirus levels to break its all-time high.

Some companies thrived in these unexpected conditions while others struggled to recover.

Once a quarter, S&P re-evaluates the ASX 200 to ensure the list is up to date. Here are just 3 businesses that did so well last financial year, they were able to climb into the vaunted index.

Zip Co Ltd (ASX: Z1P)

The buy now, pay later (BNPL) provider entered the top 200 in the first quarter of FY21. The company grew 38% during the year to end at $7.57 per share and a market capitalisation of around $4.3 billion.

Big stories that affected the Zip share price last year included partnerships with Harvey Norman Holdings Limited (ASX: HVN) and eBay Australia. The latter deal sent Zip shares rocketing more than 20% at the time. Zip also announced an expansion into Europe and the Middle East in the second half of the year. This news sent the BNPL’s price up 5% on the day.

In its half-year report, Zip reported revenues of $2.3 billion and earnings before interest, taxes, depreciation, and amortisation (EBITDA) of -$14.9 billion.

Kogan.com Ltd (ASX: KGN)

The online retailer was recognised as one of Australia’s 200 largest public companies in the second quarter of FY21. Its value decreased during the 12 months by around 22%. The Kogan share price dropped to $11.58 on the last day of the year and its market cap was about $1.2 billion.

During the financial year, the biggest story about Kogan was its purchase of online retailer Mighty Ape for $122 million. Kogan shares appreciated about 5% on the day of the announcement. Kogan also passed a milestone 3 million “active” customers last year.

For the six months to 31 December, gross sales increased 97% to $640 million and EBITDA was up 184% to $51.7 million. The Kogan share price sank 9% on the news.

Nuix Ltd (ASX: NXL)

Software provider Nuix jumped into the ASX 200 in Q3 of the last financial year. The company only floated on the stock market in December 2020 but, up to 30 June 2021, lost an astonishing 72% in value. Shares were swapping hands for $2.21 and its market cap crashed to just over $700 million. For perspective, its largest market valuation was about $3.8 billion.

The company has been mired in controversy for most of its life as an ASX 200 company. Repeated profit and earnings downgrades sent investors fleeing time and time again. Reports also emerged of poor business practices at the company, including questions over the accuracy of its financial reports.

In May, Australian Federal Police began investigating the company and it was even called out in federal parliament. The first signs of trouble for the beleaguered company came with the release of its first financial report as an ASX-listed entity. The share price plummeted 27% on a 4% decline in revenue to $85.3 million and a net loss of $16.6 million.

The post 3 companies that broke their way into the ASX 200 in FY21 appeared first on The Motley Fool Australia.

More reading

• The Cochlear (ASX:COH) share price drops 3% today
• Near all-time highs, why the ASX 200 could keep running higher
• Suncorp (ASX:SUN) share price bucks market downtrend on ~$84m divestment
• Blazing it? How the top ASX cannabis shares performed in FY21
• How these top ASX biotech shares performed in FY21

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Kogan.com ltd and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) has given back its morning gains and is tumbling lower this afternoon. At the time of writing, the benchmark index is down 0.35% to 7,288.9 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Appen Ltd (ASX: APX)

The Appen share price is down 4.5% to $12.35. This decline may have been driven by news that a major shareholder has been selling down its holding shortly after building it up. According to a ceasing to be a substantial holder notice, the Capital Group Companies has been selling a significant number of shares just a month after buying them. It most recently sold 583,170 shares for just a touch over $8 million on 1 July.

Aventus Group (ASX: AVN)

The Aventus share price is down 4.5% to $3.15. This follows news that Brett Blundy sold approximately 28.5 million Aventus shares via a blocktrade on Monday. Mr Blundy received $90.4 million for the shares. It is worth noting that he still owns just over 129 million shares in the retail property company.

HomeCo Daily Needs REIT (ASX: HDN)

The HomeCo Daily Needs REIT share price has fallen 3% to $1.45. This morning the property company announced the successful completion of a $70 million institutional placement. These funds were raised at $1.45 per new share. HomeCo is raising the funds to acquire Town Centre Victoria Point in Queensland.

Ramelius Resources Limited (ASX: RMS)

The Ramelius share price is down over 4.5% to $1.66. This morning the gold miner revealed that it has fallen short of its full year production guidance. In FY 2021, Ramelius achieved gold production of 272,109 ounces. Although this was a record for the gold miner, it fell short of its upgraded guidance of 275,000 ounces to 280,000 ounces. Management blamed the guidance miss on issues such as rainfall and personnel shortages at the Edna May operation.

The post Why Appen, Aventus, HomeCo Daily Needs, & Ramelius are dropping appeared first on The Motley Fool Australia.

More reading

• Why the Appen (ASX:APX) share price is sinking 5% today
• ASX 200 up 0.2%: Westpac asset sale, Ramsay increases Spire offer
• The Ramelius (ASX:RMS) share price is on watch today. Here’s why
• 2 fallen stars of ASX now worth buying: experts
• Here are the 5 worst performing ASX 200 tech shares from FY21

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen Ltd. The Motley Fool Australia has recommended AVENTUS RE UNIT. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Vital Metals Limited (ASX: VML) share price was going gangbusters this morning, flying more than 9% higher in intraday trade.

At the time of writing, the Vital metals share price has lost some of that ground and is trading at 5.4 cents, up 3.85%. Even at this lower price, shares in the mineral exploration company have surged more than 17% in the last 3 trading sessions.

Let’s take a look at what appears to be fuelling the Vital Metals share price in July.

What’s happening with Vital Metals?

The Vital Metals share price received a boost yesterday after the company provided an update on activities at its Nechalacho project in Canada.

According to the announcement, the company has started rare earth production starting with ore crushing.  

Vital Metals noted that its mining contractor Nahanni Construction Ltd completed the first blast of ore at Nechalacho’s North T Zone on 28 June.  The company then started production, with first ore crushed at Nechalacho on 30 June 2021.

Vital Metals managing director Geoff Atkins noted that the company’s crews worked hard on-site through June to accelerate mining activities. In addition, management said that crushing and ore sorting equipment had been installed and was ready to start commissioning.

Vital Metals aims to ramp up crushing and ore sorting at Nachalacho, with full production rates expected to be achieved this month.

Snapshot of the Vital Metals share price

Vital Metals is a mining explorer and developer focusing on rare earths, technology metals and gold projects. The company’s flagship projects include the Nechalacho Rare Earth Project in Canada and Wigu Hill project in Tanzania.

The Vital Metals share price has had a tumultuous year thus far.

Shares in the company started the year at around 3 cents and bolted to a high of 9 cents in mid-March. Since then, the Vital Metals share price has waned, but still remains more than 70% higher for the year.

The post Here’s why the Vital Metals (ASX:VML) share price is flying higher today appeared first on The Motley Fool Australia.

More reading

• Why the Myer (ASX:MYR) share price is up 9% today
• The Cochlear (ASX:COH) share price drops 3% today
• What you need to know about the RBA’s interest rate decision today
• Near all-time highs, why the ASX 200 could keep running higher
• Here’s what leading brokers are saying about the Commonwealth Bank of Australia (ASX:CBA) share price in July 2021.

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Myer Holdings Ltd (ASX: MYR) shares are surging on Tuesday. At the time of writing, the Myer share price is trading 9.46% higher at 40.5 cents.

The embattled retailer has not announced any price-sensitive news since its half-year results back in March.

Let’s take a look at what else might be propping up Myer shares.

Is this driving the Myer share price?

According to a report published late yesterday by the Australian Financial Review (AFR), Solomon Lew has been buying up Myer shares through Premier Investments Limited (ASX: PMV).

On Monday, Myer recorded more than 40 million shares changing hands, or approximately 5% of its 819.9 million shares outstanding.

Lew is the chair and largest shareholder of Premier Investments which, up until yesterday, already held a 10% stake in Myer.

According to the AFR, “Premier Investments is understood to be keen to increase its stake, to once again seek to bring about change at the struggling retailer.”

A comeback in the making?

Surprisingly, the Myer share price has rallied more than 14% in the new financial year, reaching an 18-month high of 42.5 cents in intraday trading today.

The company’s share price was also a solid performer in FY21, lifting 92% from 18.5 cents to 35.5 cents by 30 June.

Looking back at Myer’s half-year results, the company flagged a 13.1% decline in sales to $1,398 million, driven by store closures and reduced CBD footfall.

Its comparable CBD store sales were far worse, down 32.2% due to a restricted CBD workforce, reduced tourism and subdued confidence from continued lockdowns.

On a more positive note, Myer’s online division delivered $287.6 million in sales for the half-year, up 71.0% against the prior corresponding period.

The company said that its online sales provides “a strong platform to drive further growth and remains [a] focus of future investment”.

The post Why the Myer (ASX:MYR) share price is up 9% today appeared first on The Motley Fool Australia.

More reading

• Here’s why the Vital Metals (ASX:VML) share price is flying higher today
• The Cochlear (ASX:COH) share price drops 3% today
• What you need to know about the RBA’s interest rate decision today
• Near all-time highs, why the ASX 200 could keep running higher
• Here’s what leading brokers are saying about the Commonwealth Bank of Australia (ASX:CBA) share price in July 2021.

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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ASX investors have reason to cheer after the Reserve Bank of Australia (RBA) handed down its interest rate decision today.

But the Australia dollar came under pressure as our central bankers poured cold water on rate rise speculators and tapered its bond buying program.

While everyone was expecting the RBA to hold the cash rate at 0.1% this afternoon, it made it clear that the cash rate will stay at the record low until at least 2024.

RBA’s interest rate decision is good news for ASX shares

Low interest rates are good news for global equities, including ASX shares. This is because share valuations typically move in opposite direction to rates.

But the Australian dollar is positively correlated to rates. This is why the Aussie dropped from US75.7 cents to US75.5 cents on the news. Traders are paring bets that rates will rise sooner than expected.

“The Board of the Reserve Bank of Australia (RBA) today announced the holding of the Official Cash Rate at its record low of 0.10%,” said the chief economist at CreditorWatch, Harley Dale.

“That is no surprise to anybody, but it’s also not the real point. Speculation is running wild about interest rates rising before the RBA’s long time ‘deadline’ of 2024 and the RBA is inching into that debate.”

No rate hikes till 2024

The RBA made it clear that it won’t move on rates until actual inflation is sustainably within the 2% to 3% target range.

Even though there is a notable pick-up in inflation recently, RBA thinks it will only be a blip.

“In the short term, CPI inflation is expected to rise temporarily to about 3½ per cent over the year to the June quarter because of the reversal of some COVID-19-related price reductions a year ago,” said RBA Governor Philip Lowe.

“In the central scenario, inflation in underlying terms is expected to be 1½ per cent over 2021 and 2 per cent by mid 2023.”

RBA rate decision tied to inflation and wages

One big reason why the RBA is unconcerned about inflation is because of wages growth – or the lack of.

That may sound funny to some. After all, the unemployment rate fell further to 5.1% in May and more Aussies are in jobs than before the pandemic.

Further, underemployment is also trending down and labour force participation is close to record highs.

But the RBA believes that wages growth will be subdued and that any increase will be gradual and modest.

Cautious optimism behind QE wind-back

However, our central bankers acknowledged that the economic recovery is stronger and has come earlier than expected.

This is probably why the RBA is sticking to using the April 2024 government bond as the benchmark for its yield target of 0.1% instead of using a later dated bond.

While the RBA will continue to buy government bonds as part of its quantitative easing (QE) program beyond the September deadline, it will purchase $4 billion a week until at least mid-November.

We may be witnessing the start of the QE taper in Australia. That won’t be good news for ASX shares as investors have gotten addicted to easy money.

The post What you need to know about the RBA’s interest rate decision today appeared first on The Motley Fool Australia.

More reading

• Here’s why the Vital Metals (ASX:VML) share price is flying higher today
• Why the Myer (ASX:MYR) share price is up 9% today
• The Cochlear (ASX:COH) share price drops 3% today
• Near all-time highs, why the ASX 200 could keep running higher
• Here’s what leading brokers are saying about the Commonwealth Bank of Australia (ASX:CBA) share price in July 2021.

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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