The S&P/ASX200 is riding the green wave to start the week as miners lift the benchmark thanks to strong commodity prices, underpinned by a rising iron ore price after a raft of better-than-expected data from top consumer China.
Financials are also modestly higher, with the ‘big four’ banks each nudging 0.1% higher at midday.
Looking ahead, investors will closely monitor next week’s inflation data to gauge the Reserve Bank of Australia’s interest rate path. Markets are still pricing in a 73% chance of a 25-basis point cut next month, according to the RBA watch tool.
Forecasts are for the all-important trimmed mean to rise just 0.6% in the fourth quarter, which would be the smallest increase since mid-2021, while the annual pace is seen slowing to 3.2%, getting ever closer to the RBA’s 203% target band.
On the local currency docket, both the Australian and New Zealand units remain on the defensive as the greenback benefits from a run of upbeat economic data and high bond yields. While the AUD has recovered some lost ground it remains uncomfortably close to last week’s five-year trough of $0.6131.
Let’s take a quick look at some of the stocks to watch in today’s trade. Australian listed shares of Insignia Financial (ASX: IFL) have soared to touch an over three-year high as the wealth manager offers to provide CC Capital access to non-public information to help determine whether the U.S. based suitor can improve its proposal.
The U.S.-based suitor made a revised offer on Friday for AU$4.60 cash per share for IFL. Insignia says provision of the limited due diligence does not guarantee the CC Capital proposal will result in a binding offer. The Australian wealth manager has been at the centre of a bidding war since early January, with both private equity firm Bain Capital and CC Capital circling the firm as suitors. IFL shares are up over 25% this year, including today’s move.
Elsewhere, shares of Iress (ASX: IRE) are up over 4% as the fintech service provider enters into a binding share sale and purchase agreement to divest its superannuation business to private firm Apex Group. The transaction is set to release AU$40 million in cash consideration upon completion, with additional payments of up to AU$20 million over 12 months and is expected to be complete in Q2, subject to foreign Investment Review Board Approval.
IRE shares are up nearly 2% YTD, including today’s move.
To the mining space and shares of Australian listed South32 (ASX: S32) are tracking higher as the diversified miner-maintained production guidance for fiscal 2025 after a smaller-than-expected fall in second quarter manganese ore output as the company restarted production in Australia after a cyclone in March last year disrupted operations.
The stock is up more than 3% this year, including today’s move.
On the flip side, shares of embattled casino operator Star Entertainment Group (ASX: SGR) are again under pressure after the company reported a 15% slide in second-quarter revenue, due to the closure of some of its operations and continued weakness at its Sydney Casino.
The stock is down 27.6% this year, including today’s moves.
Let’s finish things off on the global stage, and it’s shaping up to be a huge week on global markets. The big dollar is solid, hovering near a two-year high, while equities around the region take a cautiously positive tone as investors anticipate a flurry of policy announcements in the first hours of Donald Trump’s second presidency.
Trump will take the oath of office tomorrow and has stoked expectations he will issue a slew of executive orders. To shake things up even more, Monday is a public holiday in the U.S. in observance of Martin Luther King Jr Day, so the first market response is expected to be felt in currency markets, with focus on Trump’s tariff policies. US futures are online and are a fraction weaker in today’s trade.
Elsewhere, Tokyo’s Nikkei 225 is strong, up around 1%, as markets await the Bank of Japan policy meeting on Friday where markets have priced in around an 80% chance the BOJ will hike rates by 25 basis points.
China meantime remains the key focus for investors as it is the target of the harshest of potential trade levies under the Trump Administration.
Finally, US earnings season kicks into full swing this week with tech titan Netflix (NASDAQ: NFLX) headlining the week releasing its numbers on Wednesday.
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