The S&P/ASX 200 is poised to open lower, with futures down 47 points or 0.55% at 8:30 am AEST. This follows Monday’s 13-point (0.16%) decline to 8,589, weighed down by Materials (-0.86%), Consumer Discretionary (-0.75%) and Real Estate (-0.46%) sectors. Strength in Utilities (+3.52%) and Health Care (+0.92%) provided some offset.
Investor caution prevailed ahead of today’s Reserve Bank of Australia (RBA) Board meeting and a looming July 9 deadline for US tariff announcements, which could impact global trade dynamics.
Stock-level standouts included Northern Star Resources, which dropped 8.65% to A$16.80 after a disappointing fourth-quarter update and weak financial year 2026 guidance. In contrast, Origin Energy rallied 6.75% to A$11.55 on news of Octopus Energy’s planned demerger of Kraken, its A$13.7 billion technology platform, in which Origin holds a 23% stake.
The RBA is widely expected to deliver a 25 basis point rate cut, taking the cash rate to 3.60%. Market pricing indicates a 97% chance of a cut today, with 77 basis points of easing expected by year-end. Recent soft inflation data and sluggish gross domestic product (GDP) growth have strengthened the case for further easing.
US markets fall on tariff announcement
US equities declined overnight as President Donald Trump imposed new tariffs on 14 countries, including 25% levies on Japan and South Korea. Despite modest declines, markets had largely anticipated the move. The Nikkei futures fell 0.60%, reflecting regional concern.
While Canada, Mexico and Europe were spared — the latter reportedly close to a “preliminary agreement in principle” — more tariff announcements are expected later this week. The focus now turns to the US Federal Open Market Committee (FOMC) minutes and jobless claims, with 17 basis points of rate cuts priced for the September meeting.
European markets edge higher; UK lags
Continental European indices ended higher on Monday, led by technology and bank stocks. The FTSEurofirst 300 gained 0.5%, supported by SAP and ASML, which both rose 2%. French bank Société Générale added 2.8%, hitting a seven-year high.
The United Kingdom’s FTSE 100 dipped 0.2%, dragged down by a 2.9% fall in Shell shares following a profit warning for its integrated gas and chemicals divisions.
Currencies and commodities
Currency movements were mixed. The Euro eased from US$1.1778 to US$1.1710, while the Australian dollar hovered near US64.90 cents after reaching a high of US65.18 cents. The Japanese yen firmed to JPY146.00.
Oil prices rose over 1% on strong US demand. Brent crude gained US$1.28 to US$69.58 per barrel, while West Texas Intermediate (WTI) added 93 cents to US$67.93.
Base metals declined amid renewed tariff tension. Copper fell 2.2% and aluminium 2.3%. Gold futures were little changed at US$3,342.80 an ounce, with spot gold trading near US$3,336. Iron ore slipped 1.1% to US$95.22 per tonne, pressured by output restrictions in China’s Tangshan steel hub.