The Australian sharemarket is set for a subdued start to the week, with ASX 200 futures down 3.2 points (-0.04%) as of 9:30am AEDT, following a mixed offshore lead and a quieter session ahead of key China data later today.
That comes after a solid finish to last week, with the ASX 200 climbing 0.48% on Friday to close just over 2% shy of its 52-week high, capping a strong weekly gain. The rally was driven by a rotation into banks, tech and real estate as metal prices cooled and investors reassessed the near-term interest rate outlook.
Banks and tech lead Friday’s rebound
Friday’s move had a different feel under the surface. While materials and energy eased as commodities pulled back, financials stepped into the leadership role, helped by strength across the major banks and a firmer tone in rate-sensitive sectors. Commonwealth Bank and Macquarie both pushed higher, while the rest of the big four posted steady gains.
Technology stocks also added support, with the local tech index outperforming as global semiconductor names stabilised after a volatile start to the year. Small caps joined the rally, with the Small Ordinaries rising close to 1%, reflecting improving breadth across the market.
Wall Street treads water, small caps keep running
Overnight, US markets were largely directionless ahead of the Martin Luther King Jr. Day holiday, with the major benchmarks finishing close to flat. The standout remained US small caps, with the Russell 2000 extending its run of outperformance against the S&P 500 for an eleventh straight session — its longest streak since the global financial crisis.
The broader picture in the US remains one of cross-currents. Big tech names have lost some momentum, dragging on the Nasdaq over the past week, while smaller companies have benefited from improving earnings expectations and heavy fund inflows into global equity markets.
Bond markets were more active, with US Treasury yields rising late last week after comments from President Trump appeared to dial back expectations of a more dovish Federal Reserve leadership transition later this year. That saw markets trim near-term rate-cut expectations, pushing the US dollar modestly higher.
Tariffs, geopolitics and trade stay in focus
Geopolitics also remains a live theme. Over the weekend, President Trump flagged fresh tariffs on several European countries tied to the ongoing standoff over Greenland, keeping trade policy firmly in focus. Elsewhere, new trade agreements involving the US, Taiwan, Canada and China highlighted how fragmented — and fast-moving — the global trade backdrop has become.
Markets are also watching developments in the Middle East closely, with Washington delaying any immediate decision on Iran while consulting allies. Energy prices have steadied for now after last week’s volatility, but the situation continues to add an unpredictable layer to commodity markets.
Commodities cool after strong run
Commodity prices cooled after last week’s run, with profit-taking most obvious across the “hot” metals complex:
- Gold slipped back under US$4,600/oz (trading around US$4,595) after a record run-up;
- Silver eased to US$89.9/oz after pushing above US$90 last week;
- Copper led the pullback among base metals, down roughly 2.7% to around US$11,662/lb, while nickel fell about 4% to about US$17,825/t and zinc was off 3% to around US$3,209/t.
- Iron ore was little changed but still softer at about US$107/t, with elevated prices and thinner margins reportedly curbing buying interest in China.
- Uranium was the standout, edging higher to around US$85/lb, and related uranium exposure held up better than most commodity-linked themes.
- Oil stayed relatively steady into the weekend — WTI near US$59.4/bbl and Brent around US$64.1/bbl — as traders weighed easing tensions in some areas against ongoing Middle East risk.
The softer tone in metals weighed on the materials sector on Friday, even as resource equities remain well supported at a broader level.
ASX today: Quiet start, data-heavy session
It’s a light day on the corporate front, with few major announcements expected as the market edges closer to February reporting season. A handful of broker updates filtered through late last week, with several large miners seeing target price revisions, while uranium names continued to attract positive attention.
The focus today will be on China’s data dump, with Q4 GDP, industrial production, retail sales and fixed asset investment all due this afternoon — numbers that could set the tone for resources and broader risk sentiment.
Closer to home, the Melbourne Institute inflation gauge is also due, offering another read on domestic price pressures ahead of a busy week for macro data.
US markets are closed tonight for the public holiday, which could keep volumes lighter into the local close.