Outlook for the day: Positive as commodity price gains and yesterday's interest rate cut help offset a dip on Wall Street.
ASX futures: up 52 points or 0.62%
Overnight themes:
Wall Street's six-session win run ended as treasury yields rose and investors booked profits in the sharp recent rally in Big Tech.
The S&P 500 slipped 0.39% to its first loss in seven sessions. The Dow dropped 115 points or 0.38%. The Nasdaq Composite shed 0.27%.
The US's growing debt mountain was back in focus following a credit downgrade late last week and a visit to Capitol Hill by President Donald Trump to persuade Republicans to support a tax bill that will add trillions to government debt. The yield on 10-year treasuries pushed back above 4.5% before trimming its rise to 3.7 points at 4.491%. Yields spiked on Monday after Moody's cut its rating on US debt to Aa1 from Aaa.
"It's a little bit of an excuse just after the run that we've had to hit the pause button and see markets consolidate a little bit and a little bit of churn under the surface... that's what we're seeing right now. But obviously when you look across to the fixed-income world, you're seeing a huge bid that came back into the market yesterday... now we're back to the races with yields pushing higher" - Garrett Melson, portfolio strategist at Natixis Investment Managers (per Reuters).
Drags overnight included some of the best performers during the rebound from the April low. Alphabet, Amazon, Apple and Nvidia all gave up at least 0.8%. Meta and Microsoft also fell. Tesla gained 0.51% as CEO Elon Musk indicated he was committed to leading the company for the next five years.
Defensive sectors resisted the selling. Utilities, health and consumer staples all gained at least 0.2%. Drags included energy -0.99%, financials -0.55% and tech -0.45%.
Gold rose for a second session as the US dollar continued to retreat after ratings agency Moody's stripped US credit of its triple-A rating late last week. The US dollar index was lately down almost 0.4%. The US 10-year treasury yield was up nearly four points, trading just below 4.5%. Gold futures settled US$51.10 or 1.6% higher at US$3,284.60 an ounce. The spot price was ahead US$66.84 or 2.07% to US$3,289.01.
Palladium and platinum jumped as Ukraine-Russia peace talks showed minimal signs of progress. The European Union and UK announced fresh sanctions on Russia after US President Donald Trump appeared to back away from an election pledge to broker a peace deal following a two-hour conversation with Russian President Vladimir Putin. Russia is the world's largest producer of palladium and second-largest producer of platinum. Palladium surged 4.72% overnight. Platinum gained 5.19%.
Iron ore edged higher after production of iron ore concentrate increased last week in China. Ore concentrate volumes expanded 2% week-on-week, according to a Mysteel report. Benchmark ore ended daytime trade on the Dalian Commodity Exchange with a rise of 0.28% to US$100.39 a metric ton. The Singapore ore benchmark was broadly flat at US$99.50. "Production among Chinese iron ore mining enterprises continued rising last week as operations resumed at more mines," consultants at Mysteel wrote.
Surging imports to the US ahead of a possible tariff helped copper prices move higher in London. Copper stocks at London Metal Exchange warehouses have declined by almost 60% since February, according to Refinitiv. US imports more than doubled in March from the month before. While the premium between the US price has contracted to US$600 a ton from a peak of US$1,570 a ton, that is still wide enough to offer huge profits, according to traders. Overnight, benchmark copper firmed 0.44% on the LME to US$9,565.25 a metric ton. On Comex, US copper futures overcame early weakness to edge up 0.1% to US$4.677 a pound.
Key events today:
Earnings: JHX
S&P 500: down 23 points or 0.39%
Dow: down 115 points or 0.27%
Nasdaq: down 73 points or 0.38%
VIX: down 0.28% to 18.09
US 10-year treasury yield: up 4 points to 4.491%
Dollar: down 0.43% to 64.26 US cents
Iron ore (Dalian): up 0.28% to US$100.39
Brent crude: down 16 US cents or 0.24% to US$65.38
Gold (futures): up US$51.10 or 1.6% to US$3,284.60
Gold (spot): up US$66.84 or 2.07% to US$3,289.01
Silver (spot): up 73 US cents or 2.27% to US$33.09
Palladium (spot): up US$46 or 4.72% to US$1,021.50
Antimony (China ore): down 0.08% to US$25,144
NYSE Arca Gold Bugs: up 3.29%
Bitcoin: up 1.61% to US$107,049
Copper (LME): up 0.44% to US$9,565.25
Nickel (LME): up 0.19% to US$15,530
Lithium carbonate (China spot battery grade): down 0.79% to 7,739 yuan
Global X Lithium & Battery Tech ETF: up 0.08%
Uranium (spot): steady at US$71.25
Global X Uranium ETF(URA): up 0.72%
BHP: down 1.25% (US); down 0.29% (UK)
