ASX 200 futures were down 23 points or 0.27% as of 8:30 am AEST, pointing to a softer open after the benchmark index ended yesterday’s session marginally lower.
The ASX 200 dipped 7 points (-0.09%) to 8,523 yesterday, with the Materials (-1.78%), Information Technology (-1.14%), and Health Care (-1.01%) sectors dragging, while Financials (+0.92%), Consumer Discretionary (+0.61%), and Real Estate (+0.44%) led the gains.
Miners declined in response to iron ore prices hovering near nine-month lows at US$92.50 per tonne, while interest rate-sensitive sectors rose on expectations the Reserve Bank of Australia (RBA) could cut the cash rate to 3.60% in July. This follows a weaker-than-expected labour force report, showing employment fell by 2,500 jobs in May and the participation rate eased to 67%, keeping unemployment steady at 4.1% for a third month.
Westpac rose 1.73%, CBA added 1.5%, and Charter Hall and Centuria each lifted more than 2%, while Mineral Resources slid 2.39% and Rio Tinto fell 2.31%.
US markets closed, focus on geopolitical risks
US markets were closed overnight for the Juneteenth public holiday. In their absence, US equity futures softened, and global sentiment remained fragile amid heightened concern over a potential US military response to the escalating Israel-Iran conflict.
Former President Donald Trump said a decision on intervention may come “within the next two weeks” – a familiar stalling tactic from his previous foreign policy rhetoric. Markets are now navigating the potential for increased Middle Eastern instability, possible disruption to oil transit through the Strait of Hormuz, and divisions among US political factions.
Meanwhile, a major cybersecurity breach involving 16 billion stolen login credentials linked to major tech platforms – including Apple, Meta, and Google – has raised fresh risks for the tech sector when trading resumes.
Europe weakens on war fears, rate cuts
European sharemarkets declined, with the FTSEurofirst 300 down 0.8% and the UK FTSE 100 losing 0.6%, dragged by rising oil prices and geopolitical tension. The energy sector rose 0.8%, but travel and leisure stocks fell 2.3%.
The Swiss National Bank and Norwegian central bank both cut rates, with the latter delivering a surprise 25 basis point cut, its first in five years. The Bank of England held rates steady but flagged growing downside risks from a weakening labour market and rising energy costs.
Commodities and currencies
Brent crude gained US$2.15 (2.8%) to US$78.85 per barrel amid fears of a wider regional war.
- US Nymex crude rose 66 cents (0.9%) to US$75.80.
- Gold eased US$20.70 (0.6%) to US$3,387.40 in futures trade, although spot prices held steady around US$3,370.
- Copper fell 0.1%, and aluminium shed 1.2% in London.
- Iron ore futures rose 0.2% to US$94.33, breaking a five-session losing streak.
On currencies, the Australian dollar edged higher to US64.75 cents, while the euro firmed to US$1.1495, and the yen weakened to JPY145.45 against the US dollar.