That’s a good question Chrisso.
Especially after Wall Street surged overnight on excitement about the potential signing of the US-Iran ‘memorandum of understanding’ later this week!
The ASX 200 was down 0.5% to 8,870 points by around 11:15am AEST.
IG analyst Tony Sycamore reckons it’s due to “profit-taking after a very strong run higher, combined with some pre-RBA caution”.
“The index has rallied around 300 points, or 3.5%, from Friday’s low at 8633 to yesterday’s high of 8937 [points],” he says.
“That’s a good rally in a short space of time, so some selling to lock in gains this morning isn’t surprising. At the same time, there’s a bit of nervousness ahead of this afternoon’s RBA Board meeting.
“We’re also seeing some of the initial euphoria around yesterday’s US-Iran Memorandum of Understanding start to fade. While the deal is positive, the path back to normal oil supply flows is far from straightforward.
“Clearing mines, restoring full marine insurance coverage, and getting vessels and operators comfortable returning to the Gulf will all take time — as will bringing shuttered wells and damaged infrastructure back online. Whether that process takes days, weeks or months remains highly uncertain.”