ASX 200 futures were down 20 points or 0.23% at 8:30 am AEST, tracking global weakness after a weekend escalation in the Israel-Iran conflict.
The ASX 200 rose 0.37% last week to finish at 8,547, after touching a record high of 8,639 midweek. Energy (+6.49%) and Utilities (+4.68%) led sector gains. IT (-0.44%), Materials (-0.42%) and Health Care (-0.40%) were among the few laggards.
Zip Co surged 21.92%, followed by Bubs Australia (+14.29%) and Star Entertainment (+13.04%). Major decliners included Cettire (-38.82%), Coronado Global (-21.62%), and Appen (-10.92%).
Thursday’s labour force update for May is the key domestic event. Consensus expects 20,000 jobs added and the unemployment rate to remain at 4.1%. A modest outcome could reinforce expectations for a 25 basis point Reserve Bank of Australia (RBA) rate cut to 3.60% in July. Markets are pricing in an 80% chance of such a move, with 78 basis points of cuts priced in by year-end.
Markets retreat as geopolitical risks flare
United States equities declined sharply on Friday following Iran’s retaliatory missile and drone strikes against Israel, pushing crude oil prices 7% higher. The Dow Jones fell 1.32% for the week, while the Nasdaq and S&P 500 slipped 0.60% and 0.39% respectively. Weekend futures suggest further declines of 0.3–0.4% when trading resumes. European sharemarkets also fell, with the FTSEurofirst 300 index down 0.9% on Friday.
The United States Federal Reserve is widely expected to hold rates at 4.25%–4.50% this week. While soft data continues to emerge, core PCE inflation remains at 2.5%. Chair Jerome Powell is expected to maintain a cautious, data-dependent tone, despite political pressure from President Donald Trump. US markets currently imply a 54 basis point easing by December.
Currency and commodity markets mixed
The Euro firmed to US$1.1550, while the Australian dollar traded at around US64.85 cents. The Japanese yen softened to JPY144.10 per US dollar.
Base metal prices slipped on Friday as a stronger United States dollar weighed on sentiment. Copper futures declined by 0.4%, while aluminium edged 0.2% lower. On a weekly basis, copper fell 0.6%, whereas aluminium managed a 3% gain.
Gold, by contrast, surged as heightened geopolitical tensions spurred demand for safe-haven assets. The gold futures price rose US$50.40, or 1.5%, to settle at US$3,452.80 per ounce following Israeli airstrikes on Iran that renewed fears of a broader Middle East conflict. Spot gold was trading near US$3,432 at the close of US trade. Bullion jumped 3.2% over the week, drawing closer to its April record high.
Iron ore futures dipped by US8 cents, or 0.1%, to US$95.38 per tonne on Friday. The marginal loss followed United States President Donald Trump’s announcement of a planned 50% tariff on additional “steel derivative products.” For the week, the steel-making commodity dropped 0.8%.
What about small caps?
The S&P/ASX Small Ordinaries fell 0.39% on Friday to finish the week at 3,256.10. Over the week, the index lost 0.61%.
News is flowing slowly this morning, but you can read about the following and more throughout the day.
- West Wits Mining Ltd has secured firm commitments to raise approximately A$14 million before costs through a placement to existing and new sophisticated and professional investors. The capital injection is expected to support the company’s development and operational activities.
- Dynamic Metals Ltd has concluded the second phase of reverse circulation (RC) drilling at the Cognac West gold prospect within its Widgiemooltha Project in Western Australia. The 19-hole follow-up campaign aimed to expand on the positive results from Phase 1 and enhance the geological model at Anomaly A and Anomaly B.
- Asian Battery Metals PLC has reported early-stage results from regional scout drilling at the MS1 and MS2 targets within the Yambat Project in Mongolia. These findings broaden the project’s exploration footprint beyond the flagship Oval copper-nickel discovery.
- archTIS Ltd has achieved a key validation milestone for its NC Protect software solution, following a rigorous evaluation process by a US prime contractor. The software has been approved for deployment within the Microsoft DoD365 cloud environment for an initial 1,000 users.