Good morning and welcome to another week of the ABC Markets and Finance blog.
Stephen Letts from the ABC Business team is ready to bring you blow-by-blow coverage of the day’s events, and while we wish all posts success, none should be construed as financial advice.
The ASX 200 appears to be off to a weak start.
ASX SPI futures remain on track despite a strong end to the weekend on Wall Street&Both the P500 and the Nasdaq hit new highs.
A fall in iron ore prices late on Friday could have a negative impact on the opening of the ASX 200 index given the outsized weightings of major miners BHP, Rio Tinto and Fortescue in the index.
S&The P 500 (+0.5%) and Nasdaq (+1%) were well supported by Microsoft (+1.5%) and Meta (+5.9%), both of which closed at all-time highs.
Weak employment data has raised expectations that a rate cut may come as early as September, and macroeconomic conditions have also encouraged buying.
U.S. job and wage growth slowed slightly in June, while the unemployment rate jumped to a two-and-a-half-year high of 4.1%.
Futures markets are pricing in a 73% chance of a September rate cut, and the benchmark 10-year Treasury note fell again, down about 20 basis points in a week.
Despite declines in both European and UK markets, the MSCI global stock index rose 0.3% to close at a record high, sparking a buying mood.
The surprise result of last night’s French election, which saw a left-wing coalition of the Socialist and Green parties emerge as the largest party in Parliament, may bring some uncertainty to European markets but has so far not caused any major movements, apart from a fall in the euro.
If the New Popular Front takes power, it is expected to “completely” repeal two signature policies of centrist President Emmanuel Macron: raising the retirement age and abolishing the wealth tax.
(Dalian) Iron ore futures fell (-3.3%) on Friday, but the main contract price increased 3.2% over the week.
Brent crude fell 1% on speculation a ceasefire agreement in Gaza could be reached and that Cyclone Beryl in the Gulf of Mexico weakened to a severe storm upon landfall and may not have much of an impact on U.S. crude production.
U.S. copper prices surged to a three-month high as speculators went on a buying spree to liquidate imprudent short positions after physical shipments failed to arrive on schedule.
There is a bit of arbitrage going on between the Comex and the London Metal Exchange right now, making some dealers rich and some investors not so rich. It’s fun.
Gold rose on the back of a weak US dollar, but in the cryptocurrency world, Bitcoin continued to fall, marking its worst week in more than a year, with Bitcoin down 3.1% and Ethereum down 5.1%.
