The Australian sharemarket looks set to ease back this morning after Friday’s modest gain, with futures pointing to a small dip at the open. On Friday, Wall Street surrendered early strength on weaker US jobs data, which pushed bond yields to multi-month lows and reinforced expectations for Federal Reserve rate cuts. At the same time, gold continues to shine, holding just shy of record highs, while oil remains heavy on supply concerns.
ASX recap
The ASX 200 managed a steady finish to the week, rising 44.7 points, or 0.5%, to 8,871. It was not an especially explosive session, but enough to claw back some of the previous day’s weakness.
Interest rate-sensitive sectors led the way as yields eased, with Real Estate, Consumer Discretionary and Technology stocks all posting gains of more than 1%. The gold sector also bounced, reversing a short bout of mid-week softness as bullion pushed into record territory, helping the Small Ords and Emerging Companies indices outperform with gains of more than 1%.
On the downside, Energy and Staples slipped, with resource majors largely flat and traders rotating into growth and defensive yield plays. By the close, the All Ords added 0.54% to 9,140 and the All Tech index was up 1.05%. The Australian dollar firmed to US65.4 cents.
Wall Street and global markets
US equities ended lower on Friday, with the S&P 500 down 0.3%, the Dow falling 0.5% and the Nasdaq essentially flat. Markets initially rallied after a string of solid sessions, but a weak August payrolls print quickly shifted sentiment. The US economy added just 22,000 jobs against expectations for 75,000, while previous months were revised down. The unemployment rate rose to 4.3% — its highest in nearly four years.
The weaker labour data fuelled bets on Fed easing, with futures markets now assigning a strong chance of a September cut and even entertaining the possibility of a larger 50-basis-point move. Bond yields dropped sharply, with the 10-year Treasury falling to 4.08%, its lowest since April.
In Europe, major indices ended the week in the red, dragged by energy names and lingering growth concerns. The Euro Stoxx 50 fell 0.5%, while Germany’s DAX lost 0.7% and London’s FTSE dipped 0.1%. Asian markets fared better, with China’s CSI 300 up 2.2%, the Hang Seng up 1.4% and Japan’s Nikkei adding 1.0%
Commodities and currencies
The standout in commodities remains gold, which briefly touched US$3,650/ounce on Friday before easing back just under US$3,600. Spot prices are still near record highs, supported by weaker yields and investor nervousness about central bank independence. Silver also held above US$40/ounce.
Oil, by contrast, continues to struggle. Brent crude fell more than 2% to US$65.50/barrel and WTI slipped to US$61.87 as OPEC+ moves towards reviving more supply in October.
Iron ore futures gained 1.2% to US$104.49/tonne, marking a fourth straight daily rise and finishing the week up 2.6%. Copper was flat, while nickel and zinc posted small gains. The Aussie dollar strengthened to a six-week high of US65.6 cents against a softer US dollar, while Bitcoin edged back above US$111,000.
ASX today
Futures are pointing to a modestly weaker start, down 5.6 points or 0.06% at 9:35 am AEST, though the combination of falling global yields and strong precious-metals prices could underpin local sentiment. Gold miners are likely to stay in focus after bullion’s latest surge, while lithium also bears watching after strong gains for Chinese producers late last week.
On the corporate front, Perpetual is reportedly close to selling its wealth management platform to AZ Next Generation Advisory for more than $500 million. A busy ex-dividend calendar will see AUB Group, Super Retail and Smartgroup trade ex today.
Looking ahead
China’s August trade balance at 1:00pm AEST is the local highlight, offering a key read on global demand conditions. Later in the week, the European Central Bank meets (Thursday) and US CPI data drops (Thursday night AEST), both likely to shape expectations for central bank moves.