The Overnight Report: Weaker Start Ahead

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Good morning.

The glass is half full, clearly, for US equities as doubts and uncertainty about whether import tariffs will be announced, and when, are being put aside for the time being.

SPI Futures are suggesting the local market is walking its own path, poised to open Thursday’s trading session on a weaker note.

Investors locally can expect an ever growing list of resources companies releasing quarterly production updates with today’s calendar including Alcoa, Fortescue, Karoon Energy and Santos.

Diversified financials such as Insignia, Fleetpartners and Netwealth are due to update on their quarterly performances.

Overnight, on a swathe of corporate earnings and a big tech rally fuelled by AI stocks delivered US indices yet more gains.

In Europe, the Euro Stoxx 50 and the FTSE 100 indices closed up 0.8% and unchanged respectively.

 In bond markets, the US 10y Treasury bond yield was up 3bp to 4.60%. In commodity markets, the active WTI oil future was down -0.3% at US$75.5/bbl, and gold gained 0.4% to US$2,755.7/oz.

In economic data, the Conference Board’s Leading Economic Index inched down -0.1% in December, following a 0.4% rise in November.

Low consumer confidence about future business conditions, weak manufacturing orders, a rise in initial jobless claims and a decline in building permits drove the fall in the index.

ANZ Bank economists point out it is important to note six-month and one-year growth rates were less negative, signalling fewer headwinds to economic activity going forward.

“Broadly, growth momentum remains strong at the start of the year.”

FX markets are zooming in on tomorrow’s widely anticipated 25bp rate hike by the Bank of Japan.

Meanwhile, Swiss National Bank (SNB) President Schlegel said previous interventions in the currency market were successful, and the central bank would be willing to use them again if necessary.

He also did not rule out resorting to negative rates, even though he added that he did not like them.

Base metals came under further pressure as President Trump warned he could hit China with 10% tariffs on all imports from as early as next month.

Iron ore also fell amid concerns that a broader trade war will dent export-driven demand in the steel sector.

Reports that China will introduce measures to stabilise the stock market also failed to boost sentiment.

Nickel and other base metals also fell after the Trump administration announced it would remove subsidies and rebates used to encourage the purchases of electric vehicles in the US.

Gold pushed higher amid the uncertainty surrounding Trump’s tariff plans. The precious metal hit a three-month high in intra-day trading as its appeal as a haven asset grew. This is despite a stronger USD, which tends to dent investor appetite.

On the calendar today:

-New Zealand Nov net migration

-Japan Dec Trade Balance

-Alcoa ((AAI)) Qtrly Production

-Coronado Global Resources ((CRN)) Qtrly report

-Fortescue ((FMG)) 4Q 2024 Production

-Fleetpartners Group ((FPR)) AGM

-Insignia Financial ((IFL)) Qtrly report

-Karoon Energy ((KAR)) Qtrly report

-Netwealth Group ((NWL)) Qtrly report

-Regis Resources ((RRL)) 2Q 2025 Production

-Santos ((STO)) Qtrly report

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

Corporate news in Australia:

-Revolut pushes closer to an Australian banking licence

-Trump threatens retaliation over Australia’s big tech tax, risking higher levies on expats and companies

-Dexus ((DXS)) is set to acquire a Powerco stake from the Australian Retirement Trust

-Woodside Energy ((WDS)) has paused its US hydrogen and solar projects following Donald Trump’s election

The Australian share market over the past thirty days

For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.

All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available on the FNArena website.  Click here. (Subscribers can access prices on the website.)

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