Wall Street closed higher overnight, with the S&P 500 up 1.1% to 7,500.6, setting a firmer tone for global risk appetite. However, the local S&P/ASX 200 closed down 0.9% yesterday at 8,828.7, largely due to a rout in mining shares. The Australian dollar is near US$0.7015. Oil prices saw mixed movements, with Brent crude up 0.3% to US$80.1, while WTI crude fell 0.5% to US$76.2.
What it means for you: Your super fund's global investments may see a slight lift, but local holdings could be pressured by mining sector weakness.
US equities saw broad gains, with the S&P 500 rising 1.1% to 7,500.6 . The Nasdaq also climbed 1.9% to 26,517.9, and the Russell 2000, which tracks smaller companies, was up 2.1% to 2,979.8. Despite the equity gains, the VIX volatility index rose 4.5% to 17.1. US 10-year bond yields were at 4.49%.
In commodities, iron ore was largely flat, down 0.1% to US$101.1 per tonne. Gold fell 1.2% to US$4,172. Oil prices were mixed: Brent crude rose 0.3% to US$80.1, while WTI crude fell 0.5% to US$76.2. Bitcoin (AUD) fell 2.4% to 89,121, and Ethereum (AUD) was down 3.5% to 2,406.8.
For Australia: The S&P/ASX 200 closed down 0.9% yesterday at 8,828.7. The Materials sector was hit hardest, falling 4.1%, with major miners BHP down 5.6% to 61.4, Rio Tinto down 3.1% to 177.4, and Fortescue down 1.1% to 19.8. Financials were relatively stable, down 0.1%. The Australian dollar was largely unchanged against the US dollar at 0.7015. The RBA cash rate remains at 4.35%. The AU-US 10-year bond spread is +29 bp.
Stocks dipped after US-Iran peace talks delay, per Reuters . This comes amid mixed signals on oil prices, with some reports noting falls due to expectations of increased supply (Qatar news agency) while others reported rises (Azərtac). The yen is hovering near 40-year lows (Reuters), a key indicator for global risk appetite as the AUD/JPY pair is a sensitive gauge of risk.
Your super: Global equity gains may provide a slight boost, but local holdings, particularly in the mining sector, could see pressure.
Your cost of living: Mixed oil prices mean petrol costs could see minor fluctuations.
The next key catalyst is the AU Monthly CPI indicator on Wednesday (24 Jun), 11:30am AEST . If the print comes in hotter than expected, it could increase pressure on the RBA to consider further rate hikes, potentially lifting bond yields and the Australian dollar. Conversely, a softer print might ease rate hike expectations. The live indicator to watch will be market pricing for the RBA's next meeting, as reflected in the 3-month BABs and OIS rates.