Markets Overview
- ASX SPI 200 futures down 0.1% to 8,737.00
- S&P 500 up 0.2% to 7,580.06
- Dow Average up 0.7% to 51,032.46
- Aussie little changed at 0.7170 per US$
- US 10-year yield fell 1.1bps to 4.4355%
- Australia 3-year bond yield fell 4.9 bps to 4.48%
- Australia 10-year bond yield fell 6.5 bps to 4.83%
- Gold spot up 1.0% to $4,540.26
- Brent futures down 1.7% to $91.12/bbl
Economic Events
- 09:00: (AU) May S&P Global Australia PMI Mfg, prior 50.2
- 11:00: (AU) May Melbourne Institute Inflation, prior 0.6%
- 11:00: (AU) May Melbourne Institute Inflation, prior 4.3%
- 11:30: (AU) May ANZ-Indeed Job Advertisements , prior -0.8%
Australian home prices stagnated last month, with growth weakening across most major cities as higher borrowing costs and tax reforms sapped demand. Australians believe they need more than A$1 million to retire comfortably, a jump of A$183,000 in 12 months, new research shows.
Oil climbed and the dollar strengthened as tensions remained elevated in the Middle East, with negotiations over a permanent US-Iran ceasefire showing little sign of a breakthrough.
Brent crude climbed early Monday to trade around $93 a barrel after closing at its lowest since mid-April on Friday. The dollar was slightly stronger against all its Group-of-10 peers. Treasuries edged lower.
Shares in the region were slightly higher, with the MSCI Asia Pacific Index advancing 0.1%. Futures contracts for the tech heavy Nasdaq 100 Index edged up 0.2% after Wall Street gauges closed at a record on Friday on expectations for a US-Iran deal and enthusiasm for the artificial-intelligence trade.
US forces sustained minor injuries in an Iranian attack on a Kuwaiti airbase over the weekend and Israel stepped up its offensive against the Tehran-backed Hezbollah in Lebanon. Meantime, Washington and Tehran exchanged messages seeking amendments to a draft agreement that would extend the ceasefire and reopen the Strait of Hormuz, though it remained unclear whether negotiations were making meaningful progress.
The renewed tensions risk interrupting a global stock rally driven by unbounded enthusiasm for sectors touched by the AI trade. Oil prices had also retreated to their April lows, helping fuel a relief rally in global bond markets that had been ravaged by fears of energy-linked inflation.
“Negotiations between the US and Iran remain an outstanding concern and a source of potential volatility going forward,” said Kyle Rodda, senior analyst at Capital.com. “The risk is the price has been misled by propaganda as the Trump administration sells a looming deal but, to this point, the Iranians remain reticent on the matter.”
In other corners of the market, gold fluctuated to trade around $4,540 an ounce, while Bitcoin led cryptocurrencies higher.
On Friday, US President Donald Trump posted on social media he was ready to make a “final determination” on a preliminary agreement to extend the ceasefire. Hours later, he left the Situation Room meeting without any decision being made, the New York Times reported.
Amendments to the deal continue to be proposed by both sides, though both the US and Iran might ultimately reject the changes and the deal would collapse, the semi-official Tasnim news agency reported Sunday.
Meantime, Israel made its broadest incursion into Lebanon in a quarter-century after Hezbollah stepped up attacks in the country’s north.
“There are likely going to be more setbacks, but the market has already priced an agreement in Iran,” Patrik Lang, chief investment strategist at Geneva-based Global Gate Asset Management. “I wouldn’t expect big market moves, except maybe lower oil, once the deal is announced.”
