The Australian sharemarket is set for a flat open, with ASX 200 futures down just 1 point (-0.01%) at 8:30 am AEST this morning. The local benchmark enters today’s session hovering near record highs, having added 0.89% yesterday despite simmering global trade tensions and mixed offshore leads.
Investors will be keeping a close eye on fresh data today, including Australia’s April trade balance and China’s latest Caixin Services PMI. In Europe, the European Central Bank meets tonight, with markets widely expecting a 25-basis-point cut.
Wall Street mixed as soft US data points to slower growth
US markets closed largely unchanged overnight after another round of weaker-than-expected economic data stirred fresh debate over how much the Federal Reserve may need to cut rates later this year.
The S&P 500 added 0.01% to 5,971, the Dow Jones dipped 0.22% and the Nasdaq gained 0.32%, supported by ongoing strength in tech names despite broader growth concerns.
US private payrolls rose by just 37,000 in May, sharply missing forecasts of 130,000 and marking the softest reading since March 2023. Meanwhile, the ISM Services PMI slipped into contraction territory for the first time in nearly a year, dropping to 49.9 and raising fresh questions about the resilience of the US consumer economy.
The data led traders to ramp up bets for two or more Fed rate cuts before year-end, while US bond yields fell sharply across the curve. The 10-year Treasury yield dropped 10 basis points or 2.13% to 4.36%.
Trade tensions resurface as tariff deadlines loom
Global trade policy remains firmly in focus, with Trump’s new 50% steel and aluminium tariffs formally taking effect this week. While the UK secured a temporary five-week reprieve, other trading partners remain in limbo.
In Europe, trade officials expressed cautious optimism that negotiations with Washington are progressing despite the rising tariff risks. Meanwhile, Trump signalled frustration with Chinese President Xi Jinping, calling him “extremely hard to deal with” and warning a deal remains elusive.
On the supply side, automakers globally are warning that China’s export restrictions on key critical minerals could start disrupting manufacturing chains, particularly for EV and battery producers.
ASX eyes commodity leads as lithium shows signs of stabilising
The local market is likely to track commodity moves today, with gold names potentially supported by bullion’s overnight gains, while lithium stocks are attracting renewed attention as prices attempt to find a bottom.
The Rare Earth/Strategic Metals ETF rose 3.2% overnight, while Pilbara Minerals jumped nearly 6% in Wednesday’s trade, helping lead a broader rally across battery metals.
In other corporate news, Catapult Group acquired weight room tech company Perch for $18 million in cash and scrip, expanding its strength analytics offering, and COSOL updated guidance to forecast $118 million to 121 million in revenue with stronger second-half sales.
Iperionx was awarded a Phase III US Department of Defense contract worth up to US$99 million to supply titanium components. And the EU Commission announced it has selected 13 strategic projects for supply chain resilience, including ASX-listed Rio Tinto, Evion Group and Sarytogan Graphite.
In small-caps action:
- Far East Gold Ltd (ASX:FEG) has commenced a 36-hole, 3,670-metre diamond drilling program at its Idenburg Gold Project in Indonesia, targeting resource growth across four priority projects;
- GTI Energy Ltd (ASX:GTR, OTC:GTRIF) has released a scoping study for its 100%-owned Lo Herma Uranium Project in Wyoming, confirming potential for a low-cost in-situ recover operation;
- Yandal Resources Ltd (ASX:YRL) has kicked off a 12,500-metre air-core drilling program at its Caladan target in WA’s Northeastern Goldfields;
- Nexus Minerals Ltd (ASX:NXM) has commenced a ~4,000-metre RC drilling program at Payns Prospect within its Wallbrook Gold Project in WA;
- Lindian Resources Ltd (ASX:LIN, OTC:LINIF) has reported further site progress at its Kangankunde Rare Earths Project in Malawi.
- Asian Battery Metals PLC (ASX:AZ9) has intersected further massive sulphide zones at its Oval copper-nickel discovery in Mongolia.
Commodities edge higher as markets weigh mixed signals
Commodity markets largely held steady overnight amid the swirling crosscurrents:
- Gold added 0.8% to US$3,399.20/oz as investors continued to hedge against economic and geopolitical uncertainty.
- Copper firmed 0.15% to US$4.89/lb, supported by ongoing tight supply conditions.
- Oil (WTI) dipped 0.9% to US$62.85/barrel as Saudi Arabia pushed for OPEC+ to accelerate supply increases and US inventory builds surprised to the upside.
- Iron ore climbed 1% to US$96.26/tonne, recovering off recent lows.
Currency markets saw the Australian dollar firm 0.36% to US$0.6490 as traders factored in yesterday’s soft domestic GDP print (+0.2% q/q) and a potential policy shift from the RBA if growth continues to moderate.
Looking ahead
Locally, investors will digest this morning’s trade data for April, while Robex Resources holds an initial public offering. Offshore, attention will turn to fresh reads on Chinese services activity and the ECB’s policy decision.
US jobless claims data and corporate earnings from Broadcom and Lululemon will round out a busy global session as traders continue to weigh conflicting signals on growth, inflation and policy risks.