Australian shares are expected to tread water on Monday after a choppy session for global markets, with ASX 200 futures down 5 points (-0.05%) at 8:30 am AEST. The local market is coming off a 0.5% loss on Friday, driven by weakness in the banks and miners, while Wall Street ended broadly higher on hopes for tariff relief and strong corporate earnings.
The S&P 500 and Nasdaq both closed at fresh record highs — their eighth and twelfth, respectively, for the month — buoyed by a broad US-EU trade deal and expectations for more tech earnings surprises. The Nasdaq added 0.24%, the S&P 500 gained 0.4%, and the Dow rose 0.47%.
US and EU clinch trade deal as earnings drive momentum
Risk appetite improved after the US and European Union announced a sweeping new trade deal that will cut tariffs on autos and increase European imports of US energy and goods. The agreement, which includes up to US$750 billion in US energy purchases and US$600 billion in US investment, also lowers auto tariffs to 15% and sets a precedent for further bilateral deals.
Tech stocks continued to support Wall Street’s rally, with Alphabet, Amazon, Meta and Microsoft all set to report earnings this week. Roughly 38% of the S&P 500 will release results in coming days, with more than 80% of those reporting so far having beaten analyst expectations.
Traders are also watching durable goods data and central bank meetings this week, including the US Federal Reserve’s decision on Thursday and Australia’s Q2 trimmed mean CPI release on Wednesday — a potential pivot point for RBA policy.
ASX eyes cautious start to a busy reporting season
Back home, the ASX is set for a quiet open ahead of Wednesday’s key inflation data and the official start of earnings season, with Pilbara Minerals releasing its FY25 results midweek.
The benchmark index closed 0.49% lower on Monday, dragged down by a steep sell-off in the Big Four banks and a mixed session for miners. Strike Energy rose after Carnarvon Energy revealed a 13% stake, while WiseTech Global and The Lottery Corporation announced new CEO appointments.
CommSec’s quarterly “State of the States” report is also out today, offering a snapshot of Australia’s top-performing state economies.
Gold eases as safe haven demand slips
Gold prices dipped 0.13% overnight to US$3,337/oz after a strong week, with signs of progress on the trade front dampening safe-haven demand. Still, money managers raised their bullish bets on the metal to the highest since April, according to Bloomberg, as inflation data and central bank meetings loom.
Other commodities were mixed. Copper rose 0.49%, supported by strong Chinese demand and tight global supplies, while oil prices slipped on concerns about oversupply. Brent crude fell 1.1% to US$68.44/barrel after the US cleared Chevron to resume pumping in Venezuela. Iron ore was steady at US$98.55/tonne, and the AUD firmed slightly to US$0.6573.
Looking ahead
Today’s calendar is light on economic data, with no major domestic or global releases scheduled. However, the stage is set for a volatile second half of the week as trimmed mean CPI lands on Wednesday, followed by the Fed decision and Trump’s August 1 deadline for new trade deals.
With the S&P 500 and Nasdaq continuing to post record highs, investor sentiment is holding firm ahead of a data-heavy week. Central bank decisions, fresh inflation figures and earnings from major tech companies could shape the next leg of market direction.