ASX200 futures were trading 97 points higher (+1.13%) at 8:30 am AEDT.
The ASX200 finished 11 points higher (0.14%) at 8,537. Materials (+1.70%), IT (+1.20%) and Energy (+0.63%) led gains, while Financials (-0.67%), Real Estate (-0.56%) and Consumer Staples (-0.55%) weighed on the index.
The benchmark opened strongly, adding 47 points (+0.55%) to an intraday high of 8,572.6 as it looked to extend Monday’s rally and follow another firm Wall Street session. Buyers then faded, with the index retracing to test support at the 200-day moving average around 8,508.
Caution dominated ahead of today’s monthly inflation update, with headline CPI expected to rise to 3.6% in October and the trimmed mean to 2.9% YoY. The heavyweight Financials sector is down 7.58% month-to-date, on track for its worst month since July 2022. Bendigo & Adelaide Bank slid 7.36% to $10.10 after regulators identified serious shortcomings in its anti–money laundering and counter-terrorism financing controls. Among the majors, CBA fell 1.17% to $153.14, NAB eased 0.10% to $40.63, ANZ dipped 0.09% to $34.91, while Westpac edged 0.11% higher to $38.02.
Miners outperformed as iron ore futures rose 0.83% to US$105.90 in Asian trade. Rio Tinto gained 2.30% to $132.28, Fortescue added 2.74% to $21.00 and BHP climbed 0.96% to $41.01. The IT sector, down more than 18% month-to-date at last week’s low, found support from strong Nasdaq futures. Life360 jumped 6.57% to $41.67, Megaport rose 3.35% to $13.87, ZIP added 1.01% to $3.00 and Technology One advanced 1.80% to $30.58.
In rates, the Australian interest rate market is pricing around 2 basis points of easing for the RBA’s December meeting and about 12 basis points of cuts by May 2026.
Softer US data fuels rate-cut bets and rotations in big tech
US equities rose for a third straight session as softer data reinforced expectations of a Federal Reserve rate cut at the December 10 FOMC meeting.
The ADP report showed average weekly private payroll losses of 13,500 for the four weeks to November 8, up sharply from 2,500 previously, suggesting job losses accelerated following layoff announcements from major employers including Amazon, Target and, most recently, HP. Core producer prices rose 2.6% YoY in September, down from an upwardly revised 2.9% in August and slightly below forecasts of 2.7%. The retail sales control group fell 0.1% versus expectations of a 0.4% rise, while the CB Consumer Confidence Index slumped to 88.7 from 95.5 as households turned more pessimistic on the labour market and the recent government shutdown.
The data bundle saw the US rates market lift the implied probability of a 25-basis point cut in December to 83%. In big tech, Meta gained 3.8% to US$636.22 and Alphabet rose 1.6% to US$323.64 on reports Meta is exploring a multibillion-dollar deal for Google’s AI chips. Nvidia fell 2.6% to US$177.82 and is down about 12% month-to-date, tracking its weakest month since March 2024.
Looking ahead, US releases include durable goods orders, initial jobless claims and the Chicago PMI. The Fed’s Beige Book is also due, along with earnings from Deere.
European equities ride peace hopes and cyclical rebound
European sharemarkets extended gains on Tuesday, supported by optimism around a potential resolution to the near four-year Russia–Ukraine war. Construction and materials stocks led the move, rising 2.4%.
The continent-wide FTSEurofirst 300 index gained 0.9%, while London’s FTSE 100 advanced 0.8%. Investor sentiment in Europe remains anchored to the geopolitical backdrop and the outlook for global growth-sensitive sectors such as industrials and materials.
In the UK, attention is turning to the government’s upcoming budget, which will help set the fiscal tone heading into year-end.
Currencies: Dollar eases as markets reprice the Fed path
Major currencies strengthened against the US dollar in European and US trade.
- The euro rose from US$1.1511 to US$1.1584 and was near US$1.1570 at the US close.
- The Australian dollar climbed from US64.34 cents to US64.74 cents and was trading around US64.70 cents late in New York.
- The Japanese yen firmed from 156.84 per US dollar to JPY155.80 before easing slightly to around JPY156.05 at the close. The moves reflected a combination of softer US data, shifting Fed expectations and ongoing sensitivity to geopolitical headlines.
Commodities: Oil tracks peace headlines while gold, copper lean into rate-cut hopes
Oil prices fell as signs of progress in peace talks between Ukraine and Russia supported expectations that Russian supply will remain in the market.
- Brent crude slipped US89 cents or 1.4% to US$62.48 a barrel.
- US Nymex crude dropped US89 cents or 1.5% to US$57.95 a barrel.
Base metals were mixed.
- Copper futures were up 0.8% and aluminium futures down 0.6%.
- Iron ore futures gained US9 cents or 0.1% to US$104.51 a tonne, helped by proposed cuts to Chinese port fees that could discourage long-term stockpiling.
- Gold futures rose US$45.80 or 1.1% to US$4,140 an ounce as weaker US retail sales cemented expectations of a December Fed rate cut. Spot gold was trading near US$4,130 at the US close, with lower yields and a softer dollar underpinning demand.
Looking ahead: key risk events
In Australia, the monthly CPI and construction work done data are released, while Fisher & Paykel Healthcare reports earnings and around 15 ASX-listed companies hold AGMs.
The Reserve Bank of New Zealand delivers its latest interest rate decision, and the UK government hands down its budget, providing further catalysts across regional markets.
US data on initial jobless claims and durable goods orders are due alongside the Fed’s Beige Book, while Deere reports earnings, giving further insight into the industrial and agricultural cycle.