The ASX is expected to rise today with ASX 200 futures up 5pts (+0.06%) as of 8:30 am AEDT.
Yesterday, the ASX 200 finished 48 points, or 0.57%, lower at 8,565.2, with Health Care, Information Technology and Telcos the main drags, down 1.65%, 1.33% and 1.11% respectively. Energy, Materials and Utilities outperformed the broader market with modest gains.
The final month of the year began on a softer note as several headwinds emerged, including a technical issue that stopped price-sensitive ASX announcements being published for roughly three hours, creating confusion and frustration.
Offshore, a drop in US equity futures and Bitcoin in thin liquidity was followed by a sharp rise in Japanese Government Bond (JGB) yields after Bank of Japan Governor Ueda said the central bank would weigh the “pros and cons” of a rate increase at its meeting in 2 weeks. That pushed 2-year JGB yields above the psychological 1% mark for the first time since June 2008 and triggered risk-off flows in the Nikkei and the JPY.
Even so, the Energy sector held up as crude rose about 2.5% to $59.97 a barrel after OPEC+ reaffirmed a pause in supply increases and Ukrainian drones reportedly hit as many as 3 ships in the Russian “shadow fleet”.
Woodside Energy gained 0.92% to $25.16, Ampol added 0.58% to $30.95 and Santos edged up 0.31% to $6.46.
Iron ore futures in Asia climbed 1.47% to $103.70, shrugging off a weaker China manufacturing PMI for November of 49.9, below both expectations of 50.5 and October’s 50.6, with BHP, Fortescue and Rio Tinto all posting small gains.
On the downside, Metcash slumped 9.19% to $3.36 after delivering softer-than-expected half-year earnings to 31 October, while AUB tumbled 17.8% to $30.63 after takeover talks with EQT and CVC were terminated.
In rates, the local interest-rate market begins the day pricing only around 1 basis point in total of a 25 bp Reserve Bank of Australia cut across the December, February and March meetings, before shifting towards tightening with roughly 14 bp of hikes implied by December 2026.
Winning streak broken
US equities broke a 5-day winning streak as the new month opened, with higher bond yields overshadowing softer economic data.
The ISM Manufacturing PMI fell to 48.2 in November 2025, the lowest level in 4 months and below both September’s 48.7 and forecasts of 48.6, marking a 9th consecutive month of contraction. The detail showed faster weakness in supplier deliveries at 49.3 (from 54.2), new orders at 47.4 (from 49.4) and employment at 44 (from 46), all pointing to softer manufacturing conditions and supporting expectations that the Federal Reserve could cut rates next week. Nonetheless, US Treasury yields rose by around 4–8 basis points across the curve, echoing the move higher in JGB yields after Governor Ueda’s hawkish comments on a potential December hike, and markets will be alert to any further move in Japanese bond yields given their spill-over into global bond markets.
Equity-market pressure was most evident in blue chips and large-cap technology stocks: Broadcom fell 4.2% to $386.00, Alphabet declined 1.56% to $315.12 and Intel slipped 1.36% to $40.01. Nvidia was a notable outlier, rising 1.65% to $179.92 after a difficult month in November.
The near-term macro calendar in the US is light, and there appears little in the upcoming data flow to meaningfully shift the current market-implied probability of roughly 87% for a 25 bp cut at the 10 December FOMC meeting.
Caution in Europe
European sharemarkets also started the new month on a cautious footing, giving back a small part of November’s gains.
The continent-wide FTSEurofirst 300 and the UK FTSE 100 both slipped about 0.2% on Monday, with sector moves doing most of the heavy lifting. Industrials led the declines, down around 1.2%, dragged by a 5.8% fall in Airbus after the plane maker disclosed a quality issue affecting metal panels on a “limited” number of A320-family aircraft.
Defence stocks underperformed as well, falling about 3.2% as investors continued to rotate away from the sector amid progress towards a potential deal to end the war in Ukraine.
Overall, the tone across European bourses was one of consolidation rather than capitulation, with modest index moves masking more pronounced stock-specific volatility in names exposed to aerospace and defence.
Currencies
In foreign-exchange trade, major currencies were firmer against the US dollar in both European and US sessions.
- The euro rose from around US$1.1595 to US$1.1651 and was trading near US$1.1610 at the US close.
- The Australian dollar lifted from about US$0.6537 to US$0.6565, before easing back towards US$0.6540 late in the session.
- The Japanese yen strengthened from about JPY155.70 per US dollar to JPY154.69 and was near JPY155.40 at the close, reflecting the rebound in local bond yields and associated risk-aversion flows.
Commodity markets were broadly stronger
Global oil prices rose on Monday after further Ukrainian drone strikes, the closure of Venezuelan airspace by the US and OPEC’s decision to keep production unchanged in the first quarter of 2026.
- Brent crude added US$0.79, or about 1.3%, to US$63.17 a barrel.
- US Nymex crude climbed US$0.77, or 1.3%, to US$59.32 a barrel.
Base metals also moved higher, with copper futures up around 0.6% on plans by Chinese smelters to cut output next year and aluminium futures gaining about 1.3%.
- Gold futures advanced US$19.90, or roughly 0.5%, to a 6-week high near US$4,274.80 an ounce, supported by growing expectations of US rate cuts and a softer dollar ahead of key data, while spot gold traded close to US$4,236 at the US close.
- Iron ore futures rose US$0.85, or about 0.8%, to US$106.94 a tonne, supported by strong buying interest in medium-grade cargoes, although year-end blast furnace maintenance capped the upside.
Looking ahead
In Australia, today’s focus is on data releases for building approvals, government finance statistics and the balance of payments, alongside company news with Collins Foods due to report earnings and Bank of Queensland holding its AGM.
In the US, attention turns to corporate updates from CrowdStrike, Marvell Technology and American Eagle Outfitters, which are all scheduled to release earnings.