The ASX is expected to rise today, with ASX 200 futures at 8556 points this morning. The ASX last closed at 8515.70 points.
The S&P/ASX 200 Index advanced 81 points, or 0.96%, last week to close at 8,516, marking its seventh weekly gain in the past eight. The rally was fuelled by a soft Australian gross domestic product (GDP) reading for the March quarter of 2025 and strength from US equity markets, reinforcing expectations for further interest rate cuts by the Reserve Bank of Australia (RBA) before year-end.
Gains were broad-based but led by Financials (+2.32%), Energy (+1.57%), Real Estate (+1.48%), and Information Technology (+1.34%). Underperforming sectors included Health Care (-0.47%), Utilities (+0.05%), Consumer Staples (+0.36%), and Consumer Discretionary (+0.52%).
Notable gainers included Helios Energy (+30.77%), Articore (+27.27%), Mineral Resources (+21.09%), and Drone Shield (+20.70%). On the downside, IDP Education plunged 51.94% following an earnings downgrade, while Seven West Media (-9.37%), Fleetwood Corporation (-9.36%), and Brickworks (-7.64%) also fell sharply.
Investor attention now turns to key domestic sentiment indicators. Consumer and Business Confidence surveys are due today, with the Westpac-Melbourne Institute Consumer Sentiment Index for June expected to rise to 94.4. This is anticipated to reflect May’s market gains, the RBA’s 25 basis point (bp) rate cut last month, and expectations for another reduction in July or August. Interest rate futures are pricing in an 80% chance of a 25bp cut in July and a cumulative 70bp of easing by year-end.
Jobs drive US gains
US markets ended higher last week, supported by Friday’s non-farm payrolls report and geopolitical developments. The United States added 139,000 jobs in May, exceeding the 125,000 consensus. However, prior months were revised down by a combined 95,000. The unemployment rate remained at 4.2%, although a fall in the labour force participation rate to 62.4% masked underlying softness.
Trade talks between US and Chinese officials commenced in London overnight, focusing on tariffs, rare earth exports, technology access, and student visa arrangements. China has reportedly increased rare earth exports in a sign of goodwill, though no significant breakthroughs have been confirmed.
The key upcoming data point is the US inflation report for May, due Tuesday night. Market expectations point to a 0.2% month-on-month rise in headline inflation, lifting the annual rate to 2.5%. Core inflation is forecast to rise 0.3% month-on-month, pushing the year-on-year rate to 2.9%. The US interest rate market is currently pricing a 65% chance of a 25bp Federal Reserve rate cut in September, with 45bp of cuts expected in total by year-end.
European markets ease
European sharemarkets retreated modestly on Monday as investors adopted a risk-averse stance ahead of scheduled trade negotiations between the United States and China in London. Market activity was subdued, with bourses in Switzerland, Denmark and Norway closed for the Whit Monday public holiday.
The FTSEurofirst 300 index fell 0.1%, weighed down in part by a 0.3% decline in utilities, which were pressured by a downturn in Eurozone bond markets. In London, the FTSE 100 index also dipped 0.1%.
Currency markets mixed
Currencies were mixed against the US dollar.
- The Euro eased from US$1.1438 to US$1.1387 before closing near US$1.1420 in US trade.
- The Australian dollar edged lower from US65.33 cents to US65.05 cents, ending near US65.15 cents.
- The Japanese yen weakened from 143.96 to 144.75 per US dollar and was trading close to 144.60 yen at the US close.
Oil rallies on trade optimism
Crude oil prices hit multi-week highs, buoyed by a weaker US dollar and optimism that a breakthrough in trade talks could support global demand.
- Brent crude rose US57 cents or 0.9% to US$67.04 per barrel.
- US Nymex crude advanced US71 cents or 1.1% to US$65.29 per barrel.
Gold rises; iron ore slips on China data
Base metals also climbed.
- Copper gained 1.6%, supported by lower inventories and hopes of progress in trade negotiations, despite weak Chinese export data. Aluminium rose 1.2%.
- Gold futures rose US$8.30 or 0.2% to US$3,354.90 per ounce, with spot gold near US$3,326 in late US trade.
- Iron ore futures declined US56 cents or 0.6% to US$95.62 per tonne, as weak Chinese inflation data weighed on sentiment. China’s producer prices in May recorded their steepest annual fall in nearly two years, while consumer prices continued to contract amid prolonged economic pressures.
What about small caps?
The S&P/ASX Small ordinaries (XSO) lost 0.97% on Friday to finish at 3,244.30, but gained 0.47% across the week.
As expected it’s been a relatively busy morning on the news front, following yesterday’s ASX holiday.
You can read about the following and more throughout the day.
- Titan Minerals Ltd has resumed drilling at its 100%-owned Dynasty Gold Project in southern Ecuador following a two-month suspension due to heavy rainfall. Resource definition diamond drilling is now fully operational with three rigs active on site. The campaign supports an upcoming Mineral Resource update targeted for the third quarter of 2025.
- Sovereign Metals Ltd has received confirmation from Japan-based Toho Titanium Company Limited regarding the suitability of natural rutile from the Kasiya Rutile-Graphite Project in Malawi. Toho Titanium, a leading titanium metal producer, has verified the material’s compatibility for producing high-specification titanium products used in aerospace and industrial applications.
- Solis Minerals Ltd has applied for a voluntary delisting of its common shares from the TSX Venture Exchange. The company intends to focus on a single primary listing on the Australian Securities Exchange (ASX), citing improved trading liquidity, cost reductions and streamlined governance as key benefits of the move.
- Krakatoa Resources Ltd has provided an operational update on the Zopkhito Antimony-Gold Project in Georgia, Eastern Europe. The company holds an exclusive option to acquire up to an 80% interest in the granted mining licence over the project area. Planned work programs and drilling activities are set to advance exploration efforts in the region.