The local market looks set to open slightly higher this morning ahead of May retail sales data with the ASX 200 futures up 0.3% at 7,722 points.
In April, the ABS recorded a lacklustre 0.1% lift in retail sales, which came in a little below expectations and not nearly enough to unwind a 0.4% fall in March.
All eyes will be on the May data today as interest rates and ongoing price pressures continue to weigh on household budgets.
CommSec senior economist Ryan Felsman said, “Cautious consumers have reduced their discretionary spending so far in 2024 and this trend is expected to continue in May."
Also scheduled for release by the ABS today are building approvals for May.
Overseas markets
In the US, the Dow Jones index rose 162 points or 0.4% overnight, the S&P 500 index gained 34 points or 0.6% and the Nasdaq index closed 0.8% higher. After an uncertain start, US markets recovered to end at session highs as the Tech sector continued its recent outperformance.
Investors initially flinched at stronger jobs figures before taking comfort from Fed Chair Powell's comments that highlighted the Fed's progress on inflation. Powell qualified his comments by saying more evidence is required before the Fed can cut rates.
Tesla (NASDAQ:TSLA) shares surged by 10% following a better-than-expected second-quarter trading update, leading some analysts to suggest that recent challenges might be ebbing for the electric carmaker.
European stocks fell to two-week lows and gave up the gains of the previous session on Tuesday as the relief rally in French shares following the first round of parliamentary elections faded while data pointed to elevated services inflation in the eurozone.
The annual inflation rate in the Euro area met forecasts by moderating to 2.5% in June, after briefly accelerating to 2.6% in May.
- The continent-wide FTSEurofirst 300 index fell 0.2%.
- In London, the UK FTSE 100 index fell 46 points or 0.6%.
Currencies
Currencies generally firmed against the US dollar in US trade.
- The Euro initially fell from US$1.0735 to US$1.0710 and was near US$1.0745 at the US close.
- The Aussie dollar lifted from US66.48 cents to US66.67 cents and was near US66.65 cents at the US close.
- The Japanese yen firmed from 161.74 yen per US dollar to JPY161.27 and was near JPY161.44 at the US close.
Commodities
Global oil prices surrendered early gains that saw prices in the region of two-month highs on Tuesday. Sellers were encouraged by forecasts relating to Hurricane Beryl that suggested oil infrastructure along the Gulf Coast is less likely to be hindered by the storm's progress in coming days.
In addition to the weather narrative, prices are being supported by the demand picture for the Independence Day holiday driving period with The American Automobile Association (AAA) predicting record holiday travel this year.
- The Brent crude price fell US36 cents or 0.4% to US$86.24 a barrel.
- The US Nymex crude price fell US57 cents or 0.7% to US$82.81 a barrel.
Base metal prices were little changed, supported at the margin by a moderation in the US Dollar.
- Copper futures firmed by a modest 0.1%.
- Aluminium futures rose 0.2%.
The gold futures price recovered from earlier losses but remained down US$5.50 or 0.2% for the session at US$2,333.40 ounce on Tuesday. Spot gold was trading near US$2,329 an ounce at the US close.
Iron ore futures were steady at $110.37 per tonne.
What’s on?
In Australia, the ABS releases May Retail Sales and Building Approvals. In China, The Caixin Services PMI is released. In the US, Challenger Job Cuts, ADP (NASDAQ:ADP) Employment, Initial & Continuing Claims, S&P Global Composite and Services PMIs are all scheduled for release ahead of the US Independence Day holiday.
What’s happening in small caps?
The S&P/ASX Small Ordinaries (XSO) was down 5.6 points or -0.19% to 2,949.4 yesterday.
- Nexus Minerals Ltd (ASX:NXM) has completed a diamond drilling program at the Crusader-Templar deposit at the Wallbrook Gold Project in the northeastern goldfields region of WA.
- Helix Resources Ltd (ASX:HLX) has completed DHEM geophysics on the first two scout drill holes targeting a prospective IP anomaly at its Canbelego Copper Project, in the Cobar-Nyngan area of central NSW.
- Yandal Resources Ltd (ASX:YRL) reports that assay results from the RC drilling program completed across the Quarter Moon Prospect, part of a more extensive 4,500-metre program across the Oblique and Quarter Moon prospects, have demonstrated high-grade mineralisation.
- Sarytogan Graphite Ltd (ASX:SGA) has pegged a new exploration licence application (ELA), called Baynazar, to explore for copper porphyry mineralisation 20 kilometres west of the Sarytogan Graphite Deposit in Central Kazakhstan.
- Kingfisher (LON:KGF) Mining Ltd (ASX:KFM) has commenced initial site works ahead of planned diamond drilling in early August at its Mick Well Carbonatites targets.