The ASX has an opportunity to test new heights today, with ASX futures pointing to a 73-point or 0.93% lift as of 8:30 am this morning.
This buoyancy comes after US markets made a strong showing overnight, each gaining more than 1% – the S&P500 and Nasdaq have had particularly impressive performances lately, logging seven sessions of growth and a sixth consecutive record-high close last night.
US and European markets
US markets enjoyed a dual charge from tech and uranium stocks overnight, as demand for artificial intelligence and an increase to Kazakhstan’s (the biggest uranium exporter in the world) mineral export tax gave the market wings.
Nvidia gained 2.6%, AMD (NASDAQ:AMD) 3.87%, Micron Technology (NASDAQ:MU) 4%, On Semiconductor Corp 4.23% and Microchip Technology Inc (NASDAQ:MCHP) 3.94%. Tech giants Apple (NASDAQ:AAPL) (+1.8%) and Microsoft (NASDAQ:MSFT) (1.4%) also gained on the positive tech sentiment.
The 10-year yield on US Treasury bonds, which has been slipping as investors become optimistic about an interest rate cut, fell 4.28%.
Moderating inflation and cooling labour market data have given those hopes strength – the Fed will get its first inflation reading for June on Thursday with the release of consumer price index data, followed up on Friday by wholesale inflation numbers.
It’s also earnings season again, so expect some market volatility as traders digest the new numbers.
The Nasdaq gained 1.18%, the S&P500 1.02% and the Dow Jones 1.09%.
European markets also closed higher overnight, settling as the results of the French election sunk in.
The Stoxx600 lifted 0.93% as sectors ended mostly in the green. Retail was the biggest winner, up 1.6%. On the other side of the ledger were chemical stocks, down 0.18%.
French luxury brands led gains; LVMH lifted 1.56%, Hermes 1,21% and Kering (EPA:PRTP) 0.95%. Car makers also lifted, with Porsche (ETR:P911_p) gaining 3.6%, BMW 2% and Volkswagen (ETR:VOWG_p) 1%.
Volkswagen announced it was considering decommissioning an Audi electric vehicle factory in Belgium to save costs.
The FTSE100 lifted 0.66% and the FTSE300 0.93%.
Currencies and commodities
Currencies were fairly steady with small gains against the US dollar last night.
The Euro lifted from US$1.0815 to US$1.0825 by the US market close. The Australian dollar hovered around US$0.6748 before ending near US$0.6745 at the US close.
The Japanese yen was the exception, weakening from JPY161.45 per US dollar to near JPY161.74.
Oil rose overnight. Brent crude rose by US$0.42, or 0.5%, to US$85.08 per barrel. The US Nymex crude price climbed US$0.69, or 0.8%, to US$82.10 per barrel.
Investors considered the signs of improving US energy demand against weak Chinese demand.
The latest US Energy Information Administration (EIA) report revealed a significant drawdown in energy inventories over the last week.
Motor fuel inventories reached their lowest since May and gasoline demand, on a four-week average, rose to the highest level since 2021. This data bolstered market confidence that optimistic forecasts for the 4th of July driving holiday had been met.
Base metal prices showed mixed results on Wednesday, reacting to the latest Chinese inflation data.
June Producer Inflation decreased at an annual rate of 0.8%, while Consumer Inflation rose by only 0.2% annually.
The numbers are a symptom of the ongoing deflationary challenges faced by the world's leading consumer of commodities.
Copper futures rose for the first time in three sessions, gaining 0.6%, supported by a moderating US dollar.
The Comex futures price for gold increased by US$11.80, or 0.5%, to US$2,379.70 per ounce. Spot gold was trading near US$2,371 per ounce at the US close.
The World Gold Council reported that gold-backed ETFs experienced inflows for the second consecutive month in June, with purchases in European and Asian markets offsetting outflows from North America.
Aluminium futures fell by 0.8%, and iron ore futures declined by 1.6%.
The decline followed the Biden administration's announcement of new tariffs on steel and aluminium shipments via Mexico. This move aims to prevent China from circumventing existing levies through transhipment.
The new measure will impose 25% tariffs on steel arriving in Mexico that was not produced in Mexico, the US, or Canada.
On the small cap front
The ASX Small Ordinaries slipped 0.31% last night, following the ASX200 down as it shed 0.23%.
You can read about the following and more throughout the day on our website.