Australia’s ASX 200 drops to more than one-month low

Australia’s equity index ASX drop to more than one-month low of 5344.7 after the uptick in inflation led to a drop in Nov RBA rate cut bets.

At the time of writing, index was trading around daily lows. Prices clocked a high of 5423.7 before breaching 50-DMA and 100-DMA support to clock a low of 5344.7.

The implied probability of RBA rate cut in November fell to 6% from 15% following the CPI release.  Flattening of the Australia bond yield curve, which signaled low probability of further monetary easing, further added to the selling pressure in stocks.

ASX Technical Levels

Breach of support at 5326 (50% of 5151.5-5500.9), under which psychological level of 5300 could be put to test. On the higher side, ony a beach of 5367.4 (38.2% of 5151.5-5500.9) would open doors for a re-test of 5396.9 (Oct 13 low).