What’s happening to ASX bank shares today?

It’s a day in the red for many bank shares on Monday amid talk of interest rate rises.

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Key points

  • ASX bank shares remain on edge
  • Macquarie, ANZ, and Westpac are in the red today
  • Commonwealth Bank is in the green
  • The US Federal Reserve will hold a 2 day policy event this week, while the Australian RBA will meet next week

ASX bank shares are having a mixed day on the market today as investors remain on edge amid interest rate speculation.

Among the fallers, Macquarie Group Ltd (ASX: MQG) is down 0.61% while Australia and New Zealand Banking Group Ltd (ASX: ANZ) is 1.1% lower at the time of writing. Meanwhile, the Commonwealth Bank of Australia (ASX: CBA) share price is up 0.32%.

Let’s take a closer look at the performance of ASX bank shares today.

What’s happening to ASX bank shares?

Among other banks on Monday, the National Australia Bank Ltd (ASX: NAB) share price is 0.46% lower while Westpac Banking Corp (ASX: WBC) is 0.6% in the red.

The Bank of Queensland Ltd (ASX: BOQ) share price is flat at the time of writing while Bendigo and Adelaide Bank Ltd (ASX: BEN) is down 0.28%.

It’s no surprise the broader S&P/ASX 200 Financials Index (ASX: XFJ) is also down. It’s 0.43% lower at the time of writing.

That’s roughly in line with the S&P/ASX 200 Index (ASX: XJO) which is down 0.45% so far today.

However, it seems, Australian bank shares are outperforming their US counterparts. The Dow Jones U.S. Banks Index dropped 2.4% in Friday’s trade. Bank of America (NYSE: BAC) dropped 1.81%, Citigroup (NYSE: C) fell 1.85%, and Wells Fargo & Co (NYSE: WFC) plunged 2.42%.

US markets are not trading as yet amid mounting speculation of interest rate rises. CBNC reported Goldman Sachs is expecting four interest rate rises this year. Goldman economist David Mericle said in a Saturday note:

Our baseline forecast calls for four hikes in March, June, September, and December.

It’s no secret the Reserve Bank of Australia (RBA) often takes its lead from the US Federal Reserve.

And as my Fool colleague Bernd reported today, the Fed and other central banks, including the Reserve Bank of Australia, may have little choice but to tighten policies this year due to rising inflation.

Increasing rates can help bank shares as they improve the profit margins on loans.

The US Fed will be holding a two-day policy meeting on Tuesday and Wednesday where it is expected to give more clarity on its rate rise intentions. The next Reserve Bank of Australia board meeting is scheduled for next week on Tuesday 1 February.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. 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 and has recommended Bendigo and Adelaide Bank Limited. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. 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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