ASX 200 futures were up 50 points (+0.56%) at 8:30 am AEST. The benchmark closed 87 points (+1.0%) higher on Thursday at 8,826, rebounding strongly after Tuesday’s sharp sell-off that erased about A$53 billion from market value.
Financials (+1.71%), Consumer Discretionary (+1.39%) and Information Technology (+1.28%) drove gains, while Telcos (-0.12%), Materials (-0.02%) and Energy (+0.13%) lagged. Among banks, Commonwealth Bank rose 2.1% to A$168, National Australia Bank gained 2% to A$42.81, Westpac added 2% to A$37.90 and ANZ was up 1.35% to A$33.20.
Miners were mixed as iron ore futures in Asia gained 1.27% to US$104.44. Rio Tinto added 2.27% to A$116.15, Fortescue rose 1.8% to A$18.66 and Mineral Resources lifted 1.29% to A$36.79. BHP declined 0.72% to A$41.98 after going ex-dividend.
Following stronger-than-expected Q2 GDP, markets are pricing in a 20-basis-point cut in November with 89% probability, while expectations for the next 25-basis-point cut have been pushed back to May 2026.
Extended gain in the United States
US equity markets extended gains on Thursday as labour market data pointed to cooling conditions. The ADP employment report showed private payrolls rising by 54,000 in August, well below 106,000 in July and short of the 65,000 expected. Initial jobless claims increased by 8,000 to 237,000, the highest in two months.
Markets are fully pricing in a 25-basis-point cut at the September 17 Federal Open Market Committee meeting, with 150 basis points of cuts anticipated by December 2026. The focus now turns to the non-farm payrolls report, expected to show 75,000 new jobs and unemployment rising to 4.3% from 4.2%.
Revisions from the Bureau of Labor Statistics next week could see large downward adjustments, with whisper numbers suggesting losses of 600,000 to 900,000 jobs.
Europe advances
European markets advanced on Thursday, buoyed by expectations of US interest rate cuts and easing pressure on bond markets. The continent-wide FTSEurofirst 300 index gained 0.6%, while London’s FTSE 100 rose 0.4%. Sector gains were led by media (+2.0%) and telecommunications (+1.8%).
Bond yields retreated as investors positioned for easier monetary policy from the US Federal Reserve. Sentiment also improved on expectations that Europe may indirectly benefit from renewed liquidity and demand spillover once the Fed begins cutting rates.
Currencies
The US dollar strengthened across the board.
- The euro fell from US$1.1660 to US$1.1630 and was trading near US$1.1650 at the US close.
- The Australian dollar eased from US$0.6526 to US$0.6501 before recovering slightly to US$0.6515.
- The Japanese yen weakened, moving from ¥148.12 to ¥148.77 per US dollar, before settling around ¥148.45.
Commodities
Oil prices fell about 1% ahead of this weekend’s OPEC+ meeting, with expectations of higher output targets. US inventories showed an unexpected 2.4-million-barrel build versus forecasts for a 2-million-barrel draw. Brent crude declined 0.9% to US$66.99 a barrel, while WTI shed 0.8% to US$63.48.
Base metals weakened as the US dollar firmed.
- Copper futures fell 1.5%, aluminium slipped 0.7%.
- Gold retreated by US$28.80 (-0.8%) to US$3,606.70 an ounce, with spot gold near US$3,545, as traders booked profits ahead of payrolls data.
- Iron ore rose for the third session, up 1.2% to US$104.53 a tonne on China demand hopes.