The ASX is set to slip today, with ASX 200 futures 0.2% lower to 8469.
Today’s expected downward turn comes as US markets traded mixed in a quiet session as investors awaited further developments on trade tariffs, the outcome of a call between Donald Trump and Xi Jinping, and the release of US nonfarm payroll data.
“The ASX200 springboarded above 8,500 yesterday, bolstered by gains on Wall Street, solid corporate earnings, and after Chinese authorities set the Yuan’s fixing rate at 7.1691, the strongest since November 8,” IG Markets analyst Tony Sycamore said.
“The stronger USD/CNY fix is in keeping with China’s restrained response to US tariffs this week, which can be interpreted as an indication that China is prepared to accept a 10% tariff rate to delay and avoid more severe tariffs of 40-60%, which could damage its already fragile economy.
“This is good news for the big iron miners, with all four locking in a third consecutive day of gains. Mineral Resources Ltd climbed 2.5% to $35.35, Fortescue (ASX:FMG) Ltd added 1.95% to $19.36, Rio Tinto Ltd (ASX:RIO) increased by 0.84% to $120.81, and BHP (ASX:BHP) Group Ltd edged 0.32% higher to $40.26.”
US markets mixed
US markets were mixed on Thursday as investors weighed strong corporate earnings against upcoming economic data. The S&P 500 and Nasdaq advanced, buoyed by gains in major technology stocks, while the Dow Jones declined.
“Starting with last night’s data. Initial jobless claims in the US increased by 11,000 to 219,000 last week, above market expectations of 213,000. Similarly, continuing claims rose by 26,000 to 1,886,000, exceeding the expected 1,870,000,” Sycamore said.
Amazon.com (NASDAQ:AMZN) rose 1.1% ahead of its earnings release after the bell, while Nvidia gained 3.1%. Shares in luxury retail group Tapestry surged 12% after it raised its full-year adjusted earnings per share forecast above market expectations. Energy stocks fell 1.6%, tracking a decline in crude oil prices.
Chipmaker Skyworks (NASDAQ:SWKS) Solutions plummeted 24.7% after forecasting a decline in its mobile segment revenue and projecting lower-than-expected quarterly profits. Honeywell (NASDAQ:HON) dropped 5.6% following its announcement to split into three independent companies while issuing a weaker 2025 sales and profit outlook. The declines weighed on the Dow Jones, which fell 126 points or 0.3%. In contrast, the S&P 500 added 0.4%, and the Nasdaq climbed 100 points or 0.5%.
Record highs in Europe
European markets closed at record highs, led by mining stocks after a wave of positive earnings results. Shares in the basic resources sector jumped 4% after steel producer ArcelorMittal forecast rising steel demand in 2025, sending its shares up 13.3%.
- The FTSEurofirst 300 index gained 1.2%.
- In London, the FTSE 100 also advanced 1.2% to a record high after the Bank of England (BoE) cut interest rates by 25 basis points to 4.5%. However, the BoE signalled a cautious approach to further cuts due to inflation risks and global economic uncertainty.
Currencies and commodities
Currencies
Currencies strengthened against the US dollar during European and US trade.
- The euro rose from US$1.0353 to US$1.0395, settling near US$1.0390 at the US close.
- The Australian dollar increased from US$0.6254 to US$0.6287, ending near US$0.6280.
- The Japanese yen appreciated from JPY152.86 per US dollar to JPY151.25, before stabilising near JPY151.50 at the US close.
Commodities
Global oil prices declined on Thursday as US President Donald Trump’s pledge to boost domestic production heightened oversupply concerns. However, losses were limited by new sanctions on Iranian crude.
- Brent crude fell US$0.32, or 0.4%, to US$74.29 per barrel.
- US Nymex crude dropped US$0.42, or 0.6%, to US$70.61 per barrel.
Base metal prices gained as trade war concerns eased despite renewed threats from Trump.
- Copper futures advanced 0.4%, while aluminium futures climbed 0.7%.
- Gold prices retreated as investors locked in profits ahead of a key US jobs report. Gold futures dropped US$16.30, or 0.6%, to US$2,876.70 an ounce, while spot gold was trading near US$2,856 at the US close, after reaching an all-time high of US$2,882.16 on Wednesday.
- Iron ore futures rose US$1.42, or 1.4%, to US$106.23 per tonne, supported by a weaker US dollar and supply constraints in Australia. Investors also monitored trade tensions between the US and China for further market direction.
What about small caps?
The S&P/ASX Small Ordinaries gained 0.56% yesterday to finish at 3,228.10. Over the five days, the index is up 0.95%.
It has been quiet so far on the news front but you can read about the following and more throughout the day.