Australian shares are set to open lower on Tuesday, with futures down 0.3% at 8:30 am AEDT, as investors brace for a busy central-bank night and another volatile session across global markets. A renewed spike in bond yields — both here and offshore — has tightened the screws on equity sentiment, with traders sharpening their focus on today’s RBA decision and tomorrow’s Federal Reserve meeting.
The ASX 200 slipped 0.12% on Monday to 8,624, recovering ground after a weaker open but ultimately weighed down by materials and energy stocks. Lithium names were the clear outlier: a sharp jump in China’s carbonate futures lit a fire under the local sector, driving double-digit gains for Liontown and solid moves for Pilbara Minerals. That strength contrasted with continued pressure across iron ore, rare earths and gold producers, as commodity markets recalibrated ahead of major macro events.
Financials and communication services eked out modest gains, while real estate and utilities lagged amid the global bond sell-off. The Australian dollar eased back towards US66.2 cents after briefly testing the 65-cent handle overnight.
Wall Street softens as Fed looms large
US equities drifted lower to start the week, with rising Treasury yields once again dominating the narrative. The S&P 500 fell 0.4%, the Dow dropped 0.5% and the Nasdaq eased 0.1%, all closing near session lows as investors reassessed the outlook for 2026 policy settings.
Markets remain almost certain the Fed will cut rates this week — but the debate has shifted squarely to the message that accompanies it. Incoming commentary from Fed chair contender Kevin Hassett added to the caution, with investors trimming expectations for cumulative 2026 cuts for the first time in several weeks.
Tech outperformed on the margin, helped by a 2.8% lift in Broadcom after reports it is in advanced discussions with Microsoft on custom chips. But elsewhere, the mood was tense: Netflix fell sharply after the US President raised antitrust concerns around its planned Warner Bros acquisition, while Tesla slid 3.4% following a downgrade from Morgan Stanley.
Bond markets extended last week’s sell-off, pushing the US 10-year yield to 4.17% — its highest since September — and reinforcing expectations of a hawkish cut building into Wednesday. Yields also rose across Europe and Asia. Commodity markets were mixed: copper held near recent highs, crude fell another 2% and gold eased toward US$4,190 an ounce.
Global signals: China trade surprises, Japan contracts
China’s November trade data delivered a welcome upside surprise, with exports rising 5.9% year-on-year and the monthly surplus swelling to one of the largest on record. Notably, exports to Australia surged 36% over the past year, suggesting meaningful trade diversion into Asia-Pacific markets stemming from US tariffs.
Japan’s Q3 GDP print confirmed a 2.3% contraction, the country’s first in six quarters, reinforcing expectations for further fiscal support into early 2026.
Bonds and currency: RBA the next catalyst
Australian yields tracked the global move higher, with the 3-year finishing around 4.04% and the 10-year near 4.70%. Markets are fully priced for no change today, but the tone of Governor Michele Bullock’s remarks will be closely analysed for how firmly the RBA intends to lean against emerging inflation risks next year. Futures now imply a 25-basis-point hike by August 2026.
The AUD remains supported by firm domestic demand indicators but weakened overnight after testing 0.6500 twice in the previous session. Today’s RBA guidance will likely steer near-term direction.
ASX today: RBA decision and a sparse news docket
Corporate news remains thin in the final stretch before Christmas, though a few developments could shape pockets of trade:
Bapcor warned that first-half earnings will fall well below expectations, citing softer October and December trading activity. ResMed secured FDA clearance for its Smart Comfort software, with a US beta launch slated for early 2026.
A strong night for lithium ETFs and chatter around disrupted operations at a Chinese mine may extend yesterday’s sharp rebound in the local sector.
Among resources, iron ore’s 1.3% retreat overnight may keep pressure on the majors, while base-metals names could soften after copper eased from record territory. Energy stocks will likely feel the impact of another drop in crude.
Data and events
Locally, the NAB business survey lands at 11:30 am AEDT, followed by the RBA’s policy announcement at 2:30 pm. Offshore, US JOLTS job-openings data will offer another read on labour-market tightness, with the Fed’s decision and press conference to follow Thursday morning AEDT.