Australian shares are set to open higher on Monday, with futures pointing to a modest lift of about 0.1%, or 12 points, taking the S&P/ASX 200 to around 8,697 at the start of trade. The upbeat lead follows a flat finish on Friday and a strong end to last week on Wall Street.
The Australian dollar was trading at US66.79¢ at 7.32am.
Attention locally will centre on household spending data for November, due later on Monday, which economists expect to show a sharp slowdown from October’s 1.3% rise. Softer consumer spending is likely to ease pressure on the Reserve Bank of Australia (RBA) as markets increasingly price in the prospect of higher interest rates.
Economists at the major banks are forecasting a more subdued result for the key retail month, which includes Black Friday and Cyber Monday promotions. ANZ expects spending to rise 0.6% month-on-month, National Australia Bank is tipping a 0.5% increase, while Commonwealth Bank sees growth of just 0.1%.
Wall Street: US equities hit record highs
Overseas, US equities closed at fresh record highs on Friday, providing a positive lead for global markets. The S&P 500 rose 0.6% to 6,966.28, surpassing its previous all-time high, while the Dow Jones Industrial Average gained 237.96 points, or 0.5%, to finish at 49,504.07. The Nasdaq composite led the market, climbing 0.8% to 23,671.35.
Gains were broad-based, with nine of the S&P 500’s 11 sectors finishing higher. Power company Vistra surged 10.5% after signing a 20-year agreement to supply electricity from three nuclear plants to Meta Platforms, highlighting growing demand from big tech groups powering artificial intelligence data centres. Nuclear developer Oklo added 7.9% after announcing a separate deal with Meta to support fuel supply and advance its Ohio project.
US homebuilders also rallied after President Donald Trump outlined plans aimed at lowering mortgage rates, including a proposal for the purchase of US$200 billion in mortgage bonds. Builders FirstSource jumped 12%, while Lennar rose 8.9%, D.R. Horton gained 7.8% and PulteGroup climbed 7.3%.
Those gains offset weakness elsewhere, including a 2.7% fall in General Motors after the company flagged a US$6 billion hit tied to its pullback from electric vehicles, on top of US$1.6 billion in charges booked in the prior quarter. WD-40 fell 6.6% after reporting quarterly profit below expectations, though management cited timing issues rather than weaker demand and reaffirmed its outlook.
In fixed income markets, US Treasury yields were mixed. A stronger US unemployment report prompted traders to further dial back expectations of a near-term Federal Reserve rate cut. Markets are now pricing just a 5% chance of a cut at the Fed’s next meeting, down from 11% a day earlier, according to CME Group data. Traders nevertheless continue to expect at least two rate cuts later this year.
Morgan Stanley Wealth Management chief economic strategist Ellen Zentner said policy uncertainty was likely to persist until economic data provide clearer direction. “Lower rates are likely coming this year, but the markets may have to be patient,” she said.
Meanwhile, US consumer sentiment showed further signs of improvement. Preliminary University of Michigan data indicated confidence strengthened in January, particularly among lower-income households, while 12-month inflation expectations fell to their lowest level in a year.
Strong finish in Europe
European sharemarkets finished Friday at record levels, buoyed by a sharp rally in Glencore that helped extend the region’s longest weekly winning streak since May.
London’s FTSE 100 closing at a record 10,124, up 79 points. IG senior technical analyst Axel Rudolph said the index’s performance marked “an impressive start to 2026”, following record highs in the S&P 500, Dow and Germany’s DAX.
Glencore surged 9.6%, while Rio Tinto fell 3% after flagging it was in early-stage talks to acquire Glencore — a potential tie-up that would create the world’s largest mining company. The pan-European FTSEurofirst 300 index rose 1% and ended the week up 2.3%.
Currencies and commodities
Currency markets were softer against the US dollar through European and US trade.
- The euro slipped from US$1.1658 to US$1.1618 and was near US$1.1635 at the US close.
- The Australian dollar eased from US67.01¢ to US66.63¢ and was near US66.85¢ at the US close.
- The Japanese yen weakened from ¥157.20 per US dollar to ¥158.16 and was near ¥157.90 at the US close.
Oil prices lifted on rising supply concerns, with protests intensifying in oil-producing Iran and an escalation in attacks tied to Russia’s war in Ukraine.
- Brent crude rose US$1.35, or 2.2%, to US$63.34 a barrel.
- US Nymex crude gained US$1.36, or 2.4%, to US$59.12.
- For the week, Brent added 4.3% and Nymex rose 3.1%.
Base metals also advanced.
- Copper futures jumped 1.9% on renewed expectations of stronger demand ahead, while aluminium futures gained 1.2%. Both were up about 3% over the week.
- Gold pushed higher as investors weighed weaker-than-expected US payrolls data alongside broader policy and geopolitical uncertainty. Gold futures rose US$40.20, or 0.9%, to US$4,500.90 an ounce, with spot gold near US$4,510 at the US close. Gold was up 4% for the week.
- Iron ore futures edged up US38¢, or 0.4%, to US$108.03 a tonne on firm near-term demand in China and expectations steelmakers will restock feedstocks ahead of the Lunar New Year holiday. Iron ore gained 0.8% over the week.