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8 July Markets at a glance

ASX slips, miners drag as investors brace for crucial US inflation data while the AUD hovers at a six-month high. Weak US jobs data has fuelled expectations of a September rate cut from the Fed, which has sent bullion prices soaring. Globally, Asia is muted while the France election outcome trounces the Euro.

Around the grounds

  • ASX edges lower, miners drag
  • Gold rises as market sees fewer barriers to Fed’s easing cycle
  • Euro slips on French election outcome
  • Sterling continues to rise on Labour’s Landslide election win
  • US inflation & earnings on tap

The Australian share market has started the week on the back foot as miners weighed thanks to falling iron ore prices. The heavyweights, BHP and Fortescue were down 0.8% and 1.4% respectively.

Energy shares are also lower, the sub-index is eyeing its worst day since June 27 after the price of oil dropped as the likelihood of a ceasefire agreement in Gaza began to outweigh the summer’s high demand for fuel. Financials are under pressure, tracking the broader index.

Bucking the trend, gold stocks. The sub-index is p nearly 2% to hit the highest level since June 11, marking its fifth consecutive session of gains as bullion prices surged on the tails of weaker than expected US non-farm payrolls which have solidified expectations of a rate cut from the US Federal Reserve as early as September.

In the news

Australian listed shares of Regis Resources (RRL) have surged in today’s trade, on strong production numbers for June. The gold producer and explorer reporting production inline with its guidance range, with the stock touching its highest level since early June. RRL shares are down over 18% so far this year as of last close.

It’s a similar story for Ramelius Resources (RMS), with shares marching higher as the gold miner says it achieved full-year gold production of 293,033 ounces, at the upper end of its upgraded guidance range.

Shares are set for their third straight day of gains if trend holds, and the stock is up nearly 13.5% YTD as of last close.

In the broker space, Citi analysts are upbeat on the outlook for John Lyng Group (JLG) tipping the company to record a record revenue of AU$.1277 billion in FY24 with momentum expected to accelerate in fiscal 2025.

Price target hiked to AU$7,85 per share with a ‘buy’ rating. The stock is down 6% so far this year as of last close.  

Not such a rosy outlook for Seven Group (SVW) as UBS lowers its price target on the stock to AU$43 from AU$45 and cuts its FY26 and FY26 earnings forecasts. ‘Buy’ rating is retained, with the broker saying the company’s acquisition of Boral (BLD) gives the group greater flexibility over capital allocation.

Shares are lower in today’s trade, marking its fourth drop of over 1% in the six sessions this month, and is down nearly 3.5% so far this year after surging 76% last year.

Going global

It’s all about currencies, as the euro slips after France’s election points to a hung parliament fuelling uncertainty over the country’s fiscal outlook.

The US dollar is also on the back foot after non-farm payrolls surprised to the downside on Friday, boosting bets the FOMC will start cutting interest rates as early as September. Futures are currently pricing in a 76% chance the Fed will cut in September, according to the CME FedWatch Tool.

The yen meantime is on track for its third day of gains, rebounding from last weeks near 38- year low against the big dollar. Sterling is up to a three and a half week high, bolstered by the Labour Party’s landslide election victory last week, which ended 14 years of Conservative rule.  

Finally, Asian equities have started the week on firm footing on those heightened US rate cut bets with MSCI’s broadest index of Asia-Pacific shares outside Japan up a tick, while Tokyo’s Nikkei 225 is stead near record highs.

US futures though are weaker, with both the S&P and Nasdaq down 0.1% as investors fear up for earnings season which kicks off later this week.

 

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