AUS
NZ
UK
CA
USA
IND
Highlights
Nasdaq and S&P 500 rally boosts sentiment ahead of local market open
Oil prices retreat as Middle East concerns ease and diplomatic signals emerge
Focus shifts to Australian inflation data for clues on monetary policy direction
Australian equities are set for a tentative start, with ASX 200 futures hinting at modest early gains. The uplift follows a strong overnight performance on Wall Street, led by surging technology stocks that drove the Nasdaq to fresh highs.
US Federal Reserve Chair Jerome Powell addressed Congress with a measured stance, indicating no immediate move on interest rates, while also signalling no urgency to raise them. This neutral messaging helped calm rate-sensitive markets, giving investors room to react positively.
Meanwhile, falling US Treasury yields further supported sentiment, reinforcing demand for equities. As momentum gathered, major indices recorded healthy gains across the board, setting a constructive tone for global markets.
Oil Prices Cool as Middle East Risk Premium Subsides
Energy markets experienced sharp corrections as geopolitical risks in the Middle East appeared to ease. Crude benchmarks Brent and WTI declined notably, with prices falling to levels not seen since the end of last year.
Former US President Donald Trump’s vocal intervention in regional tensions, alongside stabilising diplomatic developments, helped dampen fears of supply disruptions. The International Atomic Energy Agency confirmed access to Iranian facilities, further reducing the geopolitical heat.
Despite the fall, market observers remain wary. While the flare-up has cooled for now, broader regional instability still casts a shadow over energy pricing in the longer term.
Commodities Outlook Muted Amid Chinese Demand Uncertainty
Global commodities face increasing pressure as subdued Chinese demand and escalating trade tensions weigh on pricing momentum. According to recent projections, iron ore may face prolonged weakness amid construction slowdowns and seasonal production cuts in China’s steel industry.
Copper prices are also in focus, particularly as US tariffs loom. Any tariff implementation could influence copper’s near-term trajectory. Additionally, oversupply in lithium markets, particularly in China, continues to hold down spodumene prices, reflecting persistent imbalances.
Even gold, typically seen as a haven, saw downward revisions in market forecasts, reflecting a broader cooling in sentiment across the resource sector.
Australian CPI in Focus for Local Trading Outlook
Traders will be closely watching the latest monthly CPI figures to gauge inflation dynamics. While consensus forecasts suggest a slight dip in annual inflation, the Reserve Bank of Australia has expressed caution in reacting to monthly readings.
The data will be particularly relevant for insights into the services sector, which remains a key component of underlying inflationary pressure. Although the RBA may prefer to await the quarterly print expected in July, today's release could subtly influence sentiment around interest rate direction.
