Wall St edged higher overnight and the ASX is expected to follow the trend today, with ASX 200 futures up 47pts (+0.58%) as of 8:30 am AEDT.
The S&P/ASX 200 Index edged 5 points (0.07%) higher on Tuesday to close at 7,942, lifted by strength in Information Technology (1.87%), Health Care (0.98%) and Real Estate (0.42%). Consumer Staples (-0.86%), Materials (-0.61%) and Utilities (-0.58%) lagged.
Local investors are eyeing the release of February’s Monthly Indicator today, with consensus expecting headline inflation to ease to 2.4% year-on-year and trimmed mean inflation to decline to 2.7%.
Among notable stock moves, James Hardie Industries fell 5.02% to A$37.99 after agreeing to acquire US building materials group AZEK for US$8.75 billion in cash and stock. In contrast, Gold Road Resources soared 13.88% to A$2.79 after rejecting a takeover bid from Gold Fields, calling it “highly opportunistic.” ANZ shares closed 3.18% lower at A$28.59 following volatile afternoon trading.
The Australian interest rate market is currently pricing in 17 basis points of Reserve Bank of Australia (RBA) rate cuts for May and 65 basis points of cuts across 2025.
“The RBA's hawkish rate cut in February has been followed by evidence of a slowing global growth outlook, softer-than-expected wages and jobs data, and a benign near-term inflation outlook,” IG Markets analyst Tony Sycamore said.
“Assuming this inflation outlook is confirmed today, we expect the RBA will use its April Board meeting to prepare the market for a rate cut in May, pending the release of inline Q1 inflation data on April 30.”
Wall Street extends rally as focus shifts to Fed signals and data releases
United States equity markets notched a third consecutive session of gains overnight, continuing their rebound from mid-March lows. The rally remains underpinned by investor optimism that the tariff announcement expected next week will be more measured and sector-specific than initially feared.
On the economic front, the Conference Board’s Consumer Confidence Index declined to 92.9 in March, its lowest reading since February 2021. Federal Reserve Governor Adriana Kugler cited persistent goods price increases as slowing progress toward the central bank’s 2% inflation target. New York Federal Reserve President John Williams pointed to “heightened uncertainty” among businesses and households. Meanwhile, Atlanta Fed President Raphael Bostic adjusted his outlook to just one rate cut this year, cautioning that inflation's decline would be “very bumpy.”
Investor attention now turns to upcoming Federal Reserve speeches from Neel Kashkari and Adriana Musalem, as well as the release of Durable Goods orders. Markets are forecasting a 1.2% decline in February, following a 3.1% rise in January. The US interest rate market is currently pricing in 18 basis points of cuts by June and 62 basis points over the full year.
“Since mid-March, when President Trump proposed a 200% tariff on EU wine and briefly raised tariffs on Canada to 50%, there has been a clear softening in President Trump's hawkish tariff rhetoric,” Sycamore noted.
“We can’t help but think this shift has been deliberate, perhaps prompted by recent stock market turmoil or by a trusted advisor (Musk or Bessent?) pulling aside the President and suggesting that the outcome of raising revenues via tariffs can be achieved without sending the US economy into recession via a series of frantic and haphazard announcements. Or by a combination of both.
“Regardless of the cause, the change of tact has supported the current rebound in US equity markets. A continuation of the more moderate approach next week could sustain the rally, while a return to hawkish tariff rhetoric will undoubtedly unleash another round of equity market volatility.”
European equities advance as German business sentiment improves
European sharemarkets advanced on Tuesday, with all major bourses and most sectors finishing in positive territory. Investor confidence was buoyed by an uptick in German business sentiment, as the Ifo Institute’s business climate index rose to 86.7 in March, up from 85.3 in February, aligning with market expectations.
Banking stocks led the gains, with the European bank index climbing 1.8% to approach record highs.
- The continent-wide FTSEurofirst 300 index gained 0.7%.
- London’s FTSE 100 index rose by 0.3%.
Currencies and commodities
Currencies
Currency markets also firmed against the US dollar during European and US sessions.
- The euro strengthened from US$1.0774 to US$1.0829, settling near US$1.0795 at the US close.
- The Australian dollar lifted from US62.77 cents to US63.24 cents and was near US63.00 cents late in the session.
- The Japanese yen appreciated from 150.75 to JPY149.55 per US dollar, ending near JPY149.90.
Commodities
Oil prices were mixed. Brent crude edged up by US2 cents to US$73.02 per barrel after reports that Ukrainian President Volodymyr Zelenskiy agreed to a truce with Russia concerning Black Sea and energy infrastructure. However, gains were capped by prospects of tighter global supply amid proposed US tariffs on Venezuelan oil buyers. US Nymex crude slipped US11 cents to US$69.00 per barrel.
Base metal prices were varied.
- Copper futures surged 2.3% to a record high on expectations of US trade actions, while aluminium eased 0.5%.
- Gold rose by US$10.30 or 0.3% to US$3,025.90 per ounce, supported by safe-haven demand. Spot gold was near US$3,020.
- Iron ore declined slightly by US3 cents to US$102.18 per tonne as Chinese steel production cuts weighed on sentiment.
What about small caps?
The S&P/ASX Small Ordinaries gained 0.31% to 3,060.20. Over the past five trading days, the index has gained 0.19%.
Proactive is covering the ASX SMIDS Caps Conference today, where a range of small and mid cap companies will be presenting their investors case.
You can read more about it here: ASX SMIDcaps Conference to spotlight emerging companies
It has been a slow start on the news front, but you can read about the following and more throughout the day.
- Orthocell Ltd’s exclusive global distribution partner BioHorizons has officially launched and completed first sales of Orthocell’s leading dental guided bone and tissue regeneration product, Striate+™, in the significant markets of Germany, Austria and Switzerland (DACH region).
- Prescient Therapeutics Ltd announced that the first Site Initiation Visit (SIV) of its Phase 2a clinical study of PTX-100 has been completed.