Australian shares are set to open lower, with ASX 200 futures down 21 points or 0.24% at 8:30 am AEST. The decline comes after a strong session yesterday where the S&P/ASX 200 rose 51.8 points or 0.60%, closing just 0.8 points shy of a record high.
The rally was despite weak offshore leads, buoyed by a better-than-expected inflation result. Consumer price index (CPI) data showed annual inflation fell to 2.1% in the June quarter from 2.4% in March — marking two consecutive quarters within the Reserve Bank of Australia’s (RBA) 2–3% target range.
Rob Talevski, chief executive officer of Webull Securities Australia, said the RBA “got it wrong” in response to the CPI print.
“At its July board meeting, the RBA backed its decision to leave rates unchanged with some reasoning that could be described as lukewarm at best. While all members agreed that the outlook for inflation would decline toward year end, the board failed to agree on a cut, opting to adopt a ‘wait-and-see’ mentality on data.
“The first tranche of this data has today arrived, working against the six RBA board members who voted to leave rates unchanged, while the three dovish members who voted to cut rates were vindicated in their view that lower rates are justified. Cash rate futures now predict around 50–60 basis points of cuts by December 2025.
“All eyes now will be on cost of living and employment data, set to be released August 6 & 14 respectively, to gauge whether momentum that would feed declining underlying inflationary pressures will materialise.”
US markets retreat as Powell dampens rate cut hopes
In the US, equity markets gave up early gains after Federal Reserve Chair Jerome Powell signalled that no decision had been made on cutting rates in September. While the labour market was described as strong and inflation still above target, Powell’s comments reduced expectations for near-term easing. The Federal Open Market Committee (FOMC) voted 9–2 to hold the federal funds rate at 4.25%–4.5%.
Materials stocks led losses following news that former President Donald Trump had imposed a 50% tariff on semi-finished copper imports. Freeport-McMoRan shares slumped 9.5%. The Dow Jones Industrial Average fell 172 points (0.4%), the S&P 500 edged down 0.1%, while the Nasdaq gained 31 points (0.1%).
European equities flat as tariff fallout weighs on outlook
European sharemarkets were broadly unchanged. Concerns over tariff-related costs weighed on sentiment, with Adidas falling 11.5% after warning that new US tariffs could increase its costs by €200 million. Conversely, JDE Peet rose 10.7% after lifting its annual forecast. Both the FTSEurofirst 300 and UK FTSE 100 indices closed little changed.
Currency moves and commodity snapshot
The Australian dollar fell from US65.14 cents to US64.26 cents, trading around US64.30 cents at the US close. The euro dipped from US$1.1567 to US$1.1400, while the Japanese yen eased to JPY149.50.
Oil prices climbed 1% on renewed geopolitical tensions, with Brent crude up US73 cents to US$73.24 per barrel and US Nymex crude adding US79 cents to US$70.00.
Copper futures declined 0.7% despite the exclusion of a key import class from the Trump tariffs. Aluminium shed 0.6%. Gold dropped US$28.40 (0.8%) to US$3,352.80 an ounce on expectations of delayed US rate cuts, with spot gold near US$3,275. Iron ore futures added US9 cents to US$99.07 per tonne, as optimism over Chinese stimulus faded.