A soft lead from Wall Street is set to weigh on Australian equities today, with ASX SPI futures down 13 points or 0.2% ahead of the open.
The Australian dollar held firm near 65.05 US cents, despite mixed global data and diverging central bank policy signals.
US investors watched as Tesla crashed and burned – figuratively speaking, of course – as Elon Musk was relegated to the Trump administration’s doghouse.
Shares in the electric vehicle maker plunged 14.3% following a very public tweet-spat between Elon Musk and Donald Trump, while Brown-Forman tumbled 17.9% on weak guidance.
The Musk brand’s heavy losses overshadowed the administration’s talking points on diplomatic progress with China over tariffs.
Procter & Gamble also fell 1.9% after announcing plans to cut 7,000 jobs.
The Dow Jones Industrial Average fell 108 points or 0.3%, the S&P 500 shed 0.5%, and the Nasdaq lost 0.8%.
Economic data painted a mixed picture: initial jobless claims rose to 247,000, the trade deficit narrowed more than expected to US$61.6 billion, and Challenger job cuts declined 12%.
Europe edges higher as ECB cuts rates
Meanwhile, European waters were much calmer, with markets gaining ground after the European Central Bank (ECB) cut its key interest rate by 25 basis points – though it signalled a potential pause.
Bank stocks rallied 0.8%, while basic resources gained 1.4%. The pan-European FTSEurofirst 300 rose 0.2%, and London’s FTSE 100 added 0.1%.
Bond yields lifted in both the US and Europe.
The US 10-year yield rose three basis points to 4.39%, and the two-year yield gained four basis points to 3.92%.
Australia's 10-year bond yield closed at 4.27%, up four basis points.
Currencies and commodities
Currency markets were mixed overnight as traders responded to the European Central Bank’s rate cut and signs of diverging policy paths.
The Euro firmed, rising from US$1.1405 to a high of US$1.1492 before settling near US$1.1445.
The Australian dollar strengthened from 64.86 US cents to 65.37 US cents, closing near 65.05 US cents.
The Japanese yen weakened against the greenback, with the US dollar climbing from ¥142.80 to ¥143.95 before easing slightly to ¥143.35.
The Pound Sterling hovered around US$1.3568. The Australian Trade-Weighted Index closed at 59.90.
Oil prices rose following confirmation of renewed US–China trade talks. Brent crude gained 0.7% to US$65.34 per barrel, while WTI added 0.8% to US$63.37.
Copper climbed 1% on supply concerns linked to a shutdown at the Kakula mine in the Democratic Republic of Congo. Aluminium rose 0.6%.
Gold eased 0.7% to US$3,375.10 per ounce. Spot gold was near US$3,353.
Iron ore futures declined 0.6% to US$95.70 per tonne as Chinese steel demand remained subdued.
Australian labour account figures are due today, while US markets await key nonfarm payrolls data.
Domestic financial markets will be closed on Monday for the King's Birthday holiday.
Market snapshot
- ASX futures: -0.07% to 8,547 points
- Australian dollar: +0.2% to 65.07UScents
- Wall Street: Dow Jones (-0.2%), S&P 500 (-0.5%), Nasdaq (-0.8%)
- Europe: FTSE (+0.1%), DAX (+0.2%), EuroStoxx 600 (+0.1%)
- Spot gold: -0.6% to $US3,378/ounce
- Brent crude: +0.6% to $US65.23/barrel
- Iron ore: -0.5% to $US95/tonne
Source: the ABC