ASX 200 Set for Modest Gains as Markets Eye US CPI Data, Oil Prices Hit Two-Year Low

The ASX 200 is poised for a slight increase, with futures trading 8 points higher (0.10%) as of 8:30 AM AEST. Investors are cautiously anticipating the release of the US Consumer Price Index (CPI) report, which is expected to offer critical insights into inflation trends and economic health. Additionally, Brent crude oil prices have reached their lowest level in over two years, sparking discussions about potential impacts on global markets. 

Market Overview: Anticipation Ahead of US CPI and Presidential Debate 

Global markets, including Australia, are currently in a holding pattern as investors await key events, such as the US CPI release and the upcoming Presidential debate. These developments are expected to significantly shape market movements, particularly within sectors sensitive to inflation and policy shifts. The US CPI data is anticipated to show a year-on-year inflation rate decrease from 2.9% to 2.6%, while core inflation is projected to remain steady at 3.2%. 

Oil Prices Slide to Two-Year Low 

Brent crude oil prices have plummeted by 3.0%, settling at US$69 per barrel. This marks the lowest close since December 2021. The continued downward trajectory of oil prices has raised concerns about a potential economic slowdown, particularly as energy costs typically serve as a bellwether for broader economic conditions. Locally, energy companies such as Woodside Energy Group Ltd (ASX:WDS), Karoon Energy Ltd (ASX:KAR), and Beach Energy Ltd (ASX:BPT) are closely tracking this weakness, with these stocks trading near 52-week lows. 

Apple's AI-Powered iPhone 16 and New Product Launches 

Apple Inc. (NASDAQ:AAPL) has revealed its latest AI-powered iPhone 16, alongside the next generation of Watches and AirPods. This product launch is expected to maintain Apple’s momentum in the global tech sector, potentially impacting tech stocks across markets, including Australia. The advancements in AI integration may further solidify Apple’s dominance in the smartphone market and drive technological innovation within the industry. 

Real Estate Sector Gains as Bond Yields Decline 

Real estate stocks are seeing gains as bond yields continue to decline. The inverse relationship between bond yields and real estate investment trusts (REITs) has driven strong performance in the real estate sector. Major Australian REITs like Charter Hall Group (ASX:CHC) have surged by approximately 40% since July, benefiting from the decline in bond yields. This trend is expected to continue as long as bond yields remain at multi-year lows, providing support to property-focused stocks. 

MinRes Secures FIRB Approval for Onslow Iron Haul Road Sale 

Mineral Resources Limited (ASX:MIN) has received conditional approval from Australia’s Foreign Investment Review Board (FIRB) for the sale of its 49% stake in the Onslow Iron Haul Road to Morgan Stanley. The transaction is expected to be completed within 15 business days. MinRes has also outlined plans to achieve $180 million in capital expenditure savings and $120 million in operational cost reductions by FY25, including a reduction in headcount at its Mt Marion and Wodgina operations. 

Key Developments in the ASX 

- **ARN Media (ASX:A1N):** Media company ARN Media has seen significant shareholder movement, with Samuel Terry AM increasing his stake from 7.4% to 17%.  

- **NextDC Limited (ASX:NXT):** The data center services provider has launched a $550 million fully underwritten placement and a $200 million share purchase plan (SPP) at $17.15 per share to fund new development sites in Asia. The company has also revised its FY25 capital expenditure guidance to $1.3-1.5 billion, up from $900 million to $1.1 billion, following increased site acquisition in Sydney. 

- **REA Group (ASX:REA):** REA Group is in preliminary discussions to acquire UK-based property portal Rightmove, with the initial proposal valuing the company at around 700 pence per share, representing a 25% premium. This move aligns with REA’s strategy of expanding its international presence. 

- **Southern Cross Media Group (ASX:SXL):** Southern Cross is reportedly nearing a deal to sell its television business, as discussions continue around asset restructuring. 

Global Market Snapshot 

Overnight, US markets saw mixed performances, with the S&P 500 rising by 0.45%, while the Dow Jones Industrial Average slipped 0.23%. The tech-heavy NASDAQ Composite climbed 0.84%, continuing its strong run, bolstered by gains in the technology sector. US bond yields have also declined, with the 10-year Treasury yield falling for the sixth consecutive session, reaching its lowest level since June 2023. 

Major indices in Asia saw varying performances. Japan’s Nikkei 225 Index fell by 0.16%, while China’s Shanghai Composite Index rose by 0.28%. In Europe, Germany’s DAX dropped 0.96%, while the UK’s FTSE 100 was down 0.78%.  

Commodities and Currency Movements 

In the commodities market, gold has posted modest gains, up 0.41% to US$2,543 per ounce, while copper has fallen 1.12%. Iron ore prices also slipped by 0.52%, trading at US$91.28 per tonne. In the currency space, the Australian dollar (AUD) is down 0.12%, trading at US$0.6654. 

Cryptocurrency Market Update 

In the cryptocurrency market, [Bitcoin] [BTC] has declined slightly by 0.14%, trading at AUD 86,427, while [Ethereum] [ETH] has gained 0.17%, trading at AUD 3,570. The cryptocurrency market continues to display volatility as investors weigh the potential for regulatory changes and market sentiment. 

Bottomline 

As the ASX 200 prepares for a potentially modest rise, global markets are focused on the upcoming US CPI report, which could provide critical signals for future market movements. The continued decline in oil prices, coupled with product announcements from tech giant Apple, are expected to influence market sentiment. Locally, sectors like real estate and resources are making headlines, with significant developments in energy, property, and mining industries shaping the outlook for Australian investors.