In the fourth quarter, Australian wages saw a year-on-year increase of 4.2%, compared to a rise of 4.1% in the previous quarter. Economists had predicted a 4.1% increase.
As reported by the ABS:
The fourth-quarter wage data might counterbalance the impact of RBA monetary policy and contribute to increased disposable income. A rise in disposable income could stimulate consumer spending and demand-led inflation.
On February 6, RBA Governor Michelle Bullock discussed the embedded inflation risks facing the economy. Notably, the Governor did not rule out the possibility of an RBA rate hike. If the wage growth translates into heightened household spending, the RBA might opt to raise rates to moderate spending and control inflation.
On Wednesday morning, the ASX 200 witnessed a 0.74% decline, reaching 7,604. Investor apprehension ahead of NVIDIA Corp. (NVDA) earnings and the release of the FOMC Meeting Minutes influenced market sentiment.
Growing pressure on the RBA to increase interest rates, along with corporate earnings concerns, weighed on the ASX 200.
Rio Tinto Ltd (ASX: RIO) experienced a 3.26% drop, dragging BHP Group Ltd (BHP) and Fortescue Metals Group Ltd. (FMG) into negative territory. BHP and FMG recorded declines of 3.29% and 4.36%, respectively, following the announcement of full-year earnings.
Woolworths (ASX: WOW) suffered an 8.98% decline after CEO Brad Banducci's announcement of stepping down, coupled with a reported $781 million loss, which unsettled investors. Despite the positive Australian wage growth figures, the AUD/USD saw marginal gains. On Wednesday morning, the AUD/USD rose by 0.08% to $0.65535.
ASX 200 Hourly Chart 210224
AUDUSD Hourly Chart 210224
In other market news, the Hang Seng Index (+1.13%) recorded early gains, with technology and property stocks leading the way. The Hang Seng Mainland Properties Index (HSMPI) and Hang Seng Tech Index (HSTECH) saw increases of 2.17% and 1.23%, respectively, on Wednesday morning.
However, the banking sector is expected to draw attention, with Hang Seng Bank (HK: 0011) and HSBC (HK: 0005) set to release earnings on Wednesday. Both HSBC and Hang Seng Bank recorded increases of 0.64% and 0.67%, respectively.
Hang Seng Index Hourly Chart 210224
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