Markets Overview

  • ASX SPI 200 futures little changed at 8,614.00
  • S&P 500 up 0.4% to 6,611.83
  • Dow Average up 0.4% to 46,669.88
  • Aussie up 0.3% to 0.6919 per US$
  • US 10-year yield fell 1.3bps to 4.3307%
  • Australia 3-year bond yield little changed at 4.72%
  • Australia 10-year bond yield little changed at 5.04%
  • Gold spot down 0.6% to $4,650.62
  • Brent futures up 0.5% to $109.54/bbl

Economic Events

  • 09:00: (AU) March S&P Global Australia PMI Compo, prior 47.0
  • 09:00: (AU) March S&P Global Australia PMI Servi, prior 46.6
  • 11:00: (AU) March Melbourne Institute Inflation, prior -0.2%
  • 11:00: (AU) March Melbourne Institute Inflation, prior 3.6%
  • 11:30: (AU) March ANZ-Indeed Job Advertisements , prior 3.2%
  • 11:30: (AU) Feb. Household Spending MoM, est. 0.2%, prior 0.3%
  • 11:30: (AU) Feb. Household Spending YoY, est. 4.6%, prior 4.6%

Australia has received guarantees from major fuel exporting nations that supplies will proceed as normal despite the war in Iran. Westpac CEO Anthony Miller has warned the conflict in the Middle East has raised the risk of a recession in Australia.

Crude oil rose and US equity-index futures edged lower after President Donald Trump signaled a potential escalation of strikes on Iran as soon as Tuesday, damping optimism over a possible ceasefire.

West Texas Intermediate rose 1% to trade above $113 a barrel as Trump intensified threats to strike Iranian infrastructure ahead of a Tuesday deadline. Futures contracts for the S&P 500 Index dipped 0.1% in early trading, after the underlying gauge rose 0.4% on Monday in a volatile session. Asian shares were also set for a modest gain at the start, with Hong Kong still closed for a holiday.

Treasury futures and the dollar were little changed in early trading, while gold opened a touch higher. Samsung Electronics Co. jumped 5% in pre-market trading after profit surged eight-fold, showing robust demand for memory chips.

Trump said talks with Iran are “going well” ahead of the Tuesday night deadline to agree to a deal, even as he insisted that freedom of navigation through the Strait of Hormuz must be part of any accord. If Iran doesn’t agree to the US’s terms, the military may destroy “every bridge in Iran by 12 o’clock tomorrow night” and put every power plant “out of business,” Trump warned Monday.

Iran reportedly passed to mediator Pakistan a rejection of a ceasefire proposal. It demanded a permanent end to the war, lifting of sanctions, and reconstruction efforts, in addition to protocol for safe passage through Hormuz, according to the state-run Islamic Republic News Agency.

“It’s clearly too early for market watchers to stop thinking about geopolitical risk,” said Jeff Buchbinder at LPL Financial. “For now, we believe the best course of action for investors is to be patient.”

While traders kept a close eye on geopolitical developments, they awaited this week’s key inflation readings. Data published Monday showed the US service economy expanded in March at a slower pace as employment shrank by the most since 2023 and input prices accelerated.

The mixed economic signals illustrate the uncertain time for most businesses, according to Jeff Roach at LPL Financial.

“A prolonged struggle over the Strait of Hormuz into May and June would markedly darken the outlook for the US and the global economy,” he said. “For now, given last Friday’s payroll numbers, Fed policymakers have the luxury of remaining in ‘wait and see’ mode.”

While investors have been fixated on geopolitical risks, the macro data continues to point to a resilient economy and a still-constructive earnings outlook, according to Mark Hackett at Nationwide.

Systematic investors are poised to flip back into equity-buying mode after slashing their exposure to multi-year lows during the recent market selloff, according to Goldman Sachs Group Inc.’s trading desk.

“We believe the S&P 500 is carving out a low and think it makes sense to start adding length in cyclical and quality growth trades where earnings remain strong, valuation has compressed, and sentiment is negative,” said Michael Wilson at Morgan Stanley.