ASX Set to Rise on Optimism
The ASX is expected to open higher today, with ASX 200 futures at 8556 points this morning. The ASX last closed at 8515.70 points. The S&P/ASX 200 Index gained 81 points or 0.96% last week. It closed at 8,516, posting gains in seven of the last eight weeks. Weaker GDP data and strong US equities have lifted expectations for further RBA rate cuts in 2025.
Gains Across Key Sectors
Gains last week were led by Financials, which rose 2.32%. Energy added 1.57%, Real Estate rose 1.48%, and Information Technology gained 1.34%. Health Care declined 0.47%. Utilities added 0.05%, Consumer Staples rose 0.36%, and Consumer Discretionary climbed 0.52%. Top performers included Helios Energy, up 30.77%, Articore up 27.27%, Mineral Resources up 21.09%, and Drone Shield up 20.70%. IDP Education fell 51.94% on an earnings downgrade. Seven West Media dropped 9.37%, Fleetwood Corporation fell 9.36%, and Brickworks declined 7.64%.
Focus Turns to Confidence Data
Investors await domestic confidence surveys today. Consumer Sentiment is forecast to hit 94.4, reflecting May’s market rally. The RBA’s 25bp rate cut in May and expectations of another in July or August support the outlook. Interest rate futures now price an 80% chance of a 25bp cut in July. They expect 70bp in total cuts by year-end.
US Gains on Jobs and Trade Talks
US stocks gained last week on stronger jobs data and geopolitical developments. The US added 139,000 jobs in May, beating the 125,000 forecast. However, past data was revised down by 95,000 jobs. Unemployment held at 4.2%, though the labour force participation rate fell to 62.4%, indicating soft conditions.
US-China Trade Talks Resume
Trade talks began in London, focusing on tariffs, rare earth exports, and technology restrictions. China increased rare earth exports to show goodwill. No breakthrough has been reported so far.
Inflation Data to Guide Fed Policy
Investors await May US inflation data due Tuesday night. Markets expect headline inflation to rise 0.2% month-on-month, with annual inflation reaching 2.5%. Core inflation is forecast at 0.3% month-on-month and 2.9% year-on-year. Markets now price a 65% chance of a Fed rate cut in September. They expect 45bp of cuts by year-end.
European Markets Edge Lower
European stocks eased on Monday ahead of trade talks. The FTSEurofirst 300 slipped 0.1%, with utilities falling 0.3% on weaker Eurozone bonds. London’s FTSE 100 also dropped 0.1%. Markets in Switzerland, Denmark, and Norway were closed.
Currency Movements Mixed
Currency markets moved unevenly against the US dollar. The Euro moved from US$1.1438 to US$1.1387 before ending near US$1.1420. The Australian dollar slipped from US65.33 cents to US65.05 cents, closing near US65.15 cents. The yen weakened from 143.96 to 144.75 per US dollar, ending near 144.60.
Oil Gains on Trade Hopes
Oil prices rose to multi-week highs. Brent crude climbed US57 cents or 0.9% to US$67.04 per barrel. US Nymex crude added US71 cents or 1.1% to US$65.29.
Gold Rises, Iron Ore Falls on China Data
Gold futures rose US$8.30 or 0.2% to US$3,354.90 per ounce. Spot gold traded near US$3,326. Iron ore declined US56 cents or 0.6% to US$95.62 per tonne. China’s CPI fell 0.1% year-on-year in May. Producer prices dropped sharply, signalling weak demand.
Small Caps Close Higher for the Week
The S&P/ASX Small Ordinaries lost 0.97% on Friday, ending at 3,244.30. It rose 0.47% across the week.
Company Updates Lead Early Trade
Titan Minerals resumed drilling at its Dynasty Gold Project in Ecuador after weather delays. Three rigs are now operating on site. A resource update is expected in Q3 2025. Sovereign Metals confirmed Japan-based Toho Titanium approved Kasiya Project rutile for high-spec titanium production. Solis Minerals applied to delist from the TSX Venture Exchange. The firm plans to focus on its ASX listing. Krakatoa Resources issued an update on its Zopkhito Antimony-Gold Project in Georgia. It plans drilling and exploration under its option to acquire up to 80% of the site.
