ASX Poised for Lower Open Amid Retail Sales Anticipation

Highlights 

• ASX 200 futures indicate a 0.4% dip as retail sales figures draw market focus. 
• Mixed global market performance driven by US jobs data, Fed minutes, and geopolitical developments. 
• Commodity prices fluctuate as currency weakness and US fuel inventory builds influence trends. 

The Australian share market is expected to open lower today, with ASX 200 futures down 0.4% to 8,312 points. Investors are closely watching the release of November retail sales figures, anticipated to reflect a modest 1.2% monthly rise due to Black Friday promotions. However, the growth is projected to be subdued compared to previous years, potentially impacting broader market sentiment. 

The release follows recent consumer price index (CPI) data, which has shaped economists' views on the Reserve Bank of Australia’s monetary policy outlook. Current indicators suggest a potential rate adjustment in February, contingent on forthcoming data, including the Q4 CPI outcome, unemployment figures, and retail sales performance. 

CreditorWatch's chief economist, Ivan Colhoun, highlighted the complexities facing the Reserve Bank, noting that low unemployment and increasing job vacancies continue to indicate a tighter labor market compared to pre-pandemic conditions. The data underscores the balancing act required to manage inflation while preserving employment stability. 

International Markets Snapshot 

Global markets exhibited mixed performance overnight. In the United States, the Dow Jones rose 0.25%, the S&P 500 gained 0.16%, and the Nasdaq ended flat. Sentiment was tempered by conflicting US jobs data, signaling economic uncertainty. Additionally, reports of a potential national economic emergency declaration by former President Donald Trump added to market unease. 

The Federal Reserve's December meeting minutes revealed caution among officials, emphasizing a slower pace of monetary policy adjustments amid persistent inflation risks. 

In Europe, market activity remained subdued. The FTSEurofirst 300 index dipped 0.1%, with retail stocks sliding 1.8% while healthcare stocks rose 0.8%. The UK FTSE 100 index inched up 0.1%. Meanwhile, British gilt yields surged to a 25-year high, reflecting reduced expectations of rate cuts by the Bank of England. 

Currency Movements 

Major currencies weakened against the US dollar during European and US trading sessions. The Euro declined to US$1.0310, the Australian dollar hovered near US62.10 cents, and the Japanese yen weakened to JPY158.45 against the greenback. The stronger US dollar contributed to pressure on commodity prices. 

Commodity Trends 

Global oil prices fell, driven by a robust US dollar and rising US fuel inventories. Brent crude declined 1.2% to US$76.16 per barrel, while US Nymex crude shed 1.3% to US$73.32 per barrel. Gasoline inventories reported a significant build, further weighing on prices. 

Base metals experienced mixed fortunes. Copper prices rose by 1.6%, while aluminum dipped 1.0%. Iron ore futures fell 0.1% to US$97.74 per tonne, marking a fourth consecutive session of declines amid weak steel demand and higher port arrivals in China. Gold prices saw modest gains, with futures increasing 0.3% to US$2,672.40 per ounce. 

Developments in Small-Cap Stocks 

St George Mining Ltd (ASX:SGQ) has entered a technical collaboration agreement to advance the downstream processing and production of niobium and rare earths from its Araxá Project in Brazil. The initiative highlights the company’s focus on supporting critical minerals development. 

Lunnon Metals Ltd (ASX:LM8) secured a mining agreement with the Ngadju Native Title Aboriginal Corporation, ensuring the progression of its Kambalda Gold and Nickel Project in Western Australia. 

Livium Ltd (ASX:LIT) finalized its FY2024 research and development tax incentive, receiving $800,000 from the Australian Tax Office as part of a $1.7 million total rebate. 

Mako Gold Ltd (ASX:MKG) received a final off-market takeover offer from Aurum Resources Ltd (ASX:AUE), consolidating ownership as Aurum acquires 86.77% of Mako shares and appoints a majority of directors to the board. 

As markets navigate domestic retail data and global economic trends, investor focus will remain attuned to monetary policy developments and geopolitical factors influencing asset performance.