Daily Market Reports | 8:57 AM
This story features XERO LIMITED, and other companies. For more info SHARE ANALYSIS: XRO
The company is included in ASX50, ASX100, ASX200, ASX300, ALL-ORDS and ALL-TECH
Markets for now are working with a ceasefire between Israel/Iran, with the oil price falling almost -18% in the last two days.
With inflation concerns back in the Genie’s bottle and talk of a more ‘dovish’ Fed, positive sentiment is feeding into Tech and Financial stocks.
With Australia’s upcoming May CPI print at 11.30am AEST, ASX200 futures are tilted to a slightly positive open as month, quarter and financial year end approach on Monday.
| World Overnight | |||
| SPI Overnight | 8541.00 | + 6.00 | 0.07% |
| S&P ASX 200 | 8555.50 | + 80.60 | 0.95% |
| S&P500 | 6092.18 | + 67.01 | 1.11% |
| Nasdaq Comp | 19912.53 | + 281.56 | 1.43% |
| DJIA | 43089.02 | + 507.24 | 1.19% |
| S&P500 VIX | 17.48 | – 2.35 | – 11.85% |
| US 10-year yield | 4.29 | – 0.03 | – 0.63% |
| USD Index | 97.56 | – 0.41 | – 0.42% |
| FTSE100 | 8758.99 | + 0.95 | 0.01% |
| DAX30 | 23641.58 | + 372.57 | 1.60% |
Good Morning,
Geopolitical risk, what risk? Improved sentiment and a return of retail US investors has the momentum and tech trades back with exuberance.
What happened overnight: Extract Chris Weston, Pepperstone
It’s been another solid day for risk appreciation in financial markets, driven largely by a further liquidation of long crude positions as the geopolitical risk premium continues to be priced out, amid a broad performance chase in mega-cap tech and financials.
Brent crude traded -7% lower to US$66.82, taking the drawdown from Monday’s futures open to -17.9%, before better buyers stepped in, with crude closing at US$67.83.
European natural gas prices collapsed by -12%, offering tailwinds to both the EUR and European equity markets. Volatility has also eased, with the VIX index falling -2.35 vols to 17.48%, while gold has also traded heavy, with spot into a session low of US$3295 as traders continued to reduce any residual geopolitical hedges.
US equity appreciation has been notable and well-traded by clients. The NAS100 futures trade to new all-time highs, while the S&P500 futures are just 0.4% shy of its own at the high, with volumes in SPX500 cash equity 7% above the 30-day average, and on solid breadth with 75% of constituents trading higher.
Tech and financials led the charge: Meta made a strong move and looks good for further upside, with Microsoft and Amazon adding index points, while Nvidia closed up 2.6%, breaking to new cycle highs, and setting its sights on the all-time highs of US$153.13. AMD jumped 6.8% and is in ‘beast mode’, making it a strong momentum alternative for those reluctant to chase Nvidia at current levels.
A market willing to buy the dip seems to have morphed into a fear-of-missing-out (FOMO) affair and a reluctant chase for performance.
On the macro front, US consumer confidence slid to 93 from 98.4, with a clear deterioration in the labour market differential. In testimony to the House Financial Services Committee, Jerome Powell noted absent current inflation risks, the Fed funds rate could be taken to a neutral setting (around 3%). This implied scope to cut rates if the collective in the Fed’s ranks regain full confidence in the disinflation story or if the labour market weakens at a faster clip.
US interest rate swaps imply an 18% chance of a July rate cut, though the bar remains high for that to happen, and now fully price a -25bp cut at the September FOMC meeting. The December FOMC meeting is now priced for -59 bps of implied easing, adding -5 bps of implied cuts on the day. The market’s pricing of inflation expectations has fallen sharply, and US Treasury yields are down -4 to -5 bps across the curve.
The USD has traded heavy, with the DXY dipping to 97.70 before finding support. EURUSD settled at the highest closing level since Q4 2021, underpinned by tailwinds from the German budget and further improvements in the domestic data flow.
Looking ahead, while the collective in the market will be less sensitive to developments in the Middle East, there are still reasons to remain vigilant to the price action in crude.
Domestically, Australian monthly CPI is due out, with the headline print expected to fall to 2.3% from 2.4%, which should play into the implied rate-cut prospects at the July 8 RBA meeting (currently 79% implied probability). Markets imply just over three cuts by December, so the AUD and ASX200 momentum may prove sensitive to the data.
Can the ASX200 push toward fresh all-time highs alongside H-shares and the Hang Seng? We’ll be watching.
Corporate news in Australia
-Xero ((XRO)) is expected to launch a $2bn capital raising to fund the acquisition of New York based accounting and payments platform, Melio Payments.
-Greatland Gold ((GGP)) shares rose to $7.30 from $6.60 on the first day of trading on the ASX, with Virgin ((VGN)) shares up to $3.23 from IPO pricing of $2.90.
-Aldi has dropped prices on grocery items in response to deep discounting from Woolworths Group ((WOW)) to regain market share.
-Mineral Resources ((MIN)) may sell its stake in the services business for $1.1bn to raise cash.
-Bannerman Energy ((BMN)) is raising $85m in a discounted share placement.
-Rob Luciano’s split from his wife is raising questions over the family Trust’s 6.6% stake in Regal Partners ((RPL)).
-Treasury Wine Estates ((TWE)) announced a share buyback of 5% of its capital or $327m.
On the calendar today:
-NZ May Trade Bal
-AU May CPI
-JP May PPI
-US May building permits
-US May new home sales
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 3337.22 | – 48.80 | – 1.44% |
| Silver (oz) | 35.87 | – 0.24 | – 0.67% |
| Copper (lb) | 4.90 | + 0.02 | 0.32% |
| Aluminium (lb) | 1.17 | – 0.01 | – 0.54% |
| Nickel (lb) | 6.69 | + 0.06 | 0.96% |
| Zinc (lb) | 1.22 | + 0.00 | 0.12% |
| West Texas Crude | 65.03 | – 2.41 | – 3.57% |
| Brent Crude | 66.82 | – 2.65 | – 3.81% |
| Iron Ore (t) | 94.63 | – 0.12 | – 0.13% |
The Australian share market over the past thirty days
| Index | 24 Jun 2025 | Week To Date | Month To Date (Jun) | Quarter To Date (Apr-Jun) | Year To Date (2025) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8555.50 | 0.59% | 1.43% | 9.08% | 4.86% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| ADH | Adairs | Upgrade to Buy from Accumulate | Morgans |
| ANZ | ANZ Bank | Downgrade to Sell from Neutral | UBS |
| BHP | BHP Group | Downgrade to Accumulate from Buy | Morgans |
| CNI | Centuria Capital | Upgrade to Neutral from Sell | UBS |
| COF | Centuria Office REIT | Upgrade to Neutral from Sell | UBS |
| CQR | Charter Hall Retail REIT | Downgrade to Neutral from Buy | UBS |
| FMG | Fortescue | Downgrade to Neutral from Buy | Citi |
| Downgrade to Neutral from Buy | Citi | ||
| Downgrade to Hold from Buy | Morgans | ||
| GL1 | Global Lithium Resources | Downgrade to Hold from Accumulate | Ord Minnett |
| HDN | HomeCo Daily Needs REIT | Downgrade to Neutral from Buy | UBS |
| IGO | IGO Ltd | Downgrade to Neutral from Buy | Citi |
| KLS | Kelsian Group | Downgrade to Accumulate from Buy | Ord Minnett |
| LLC | Lendlease Group | Upgrade to Neutral from Sell | UBS |
| LOV | Lovisa Holdings | Upgrade to Neutral from Sell | UBS |
| LTR | Liontown Resources | Downgrade to Sell from Neutral | Citi |
| Downgrade to Sell from Neutral | Citi | ||
| Downgrade to Sell from Lighten | Ord Minnett | ||
| LYC | Lynas Rare Earths | Downgrade to Underperform from Neutral | Macquarie |
| MTS | Metcash | Downgrade to Neutral from Buy | Citi |
| PLS | Pilbara Minerals | Downgrade to Neutral from Buy | Citi |
| Downgrade to Sell from Hold | Ord Minnett | ||
| REA | REA Group | Downgrade to Hold from Buy | Bell Potter |
| RIO | Rio Tinto | Downgrade to Hold from Accumulate | Morgans |
| RSG | Resolute Mining | Upgrade to Buy from Accumulate | Ord Minnett |
| SMP | SmartPay | Downgrade to Hold from Buy | Bell Potter |
| VCX | Vicinity Centres | Downgrade to Sell from Neutral | UBS |
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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CHARTS
For more info SHARE ANALYSIS: BMN - BANNERMAN ENERGY LIMITED
For more info SHARE ANALYSIS: GGP - GREATLAND RESOURCES LIMITED
For more info SHARE ANALYSIS: MIN - MINERAL RESOURCES LIMITED
For more info SHARE ANALYSIS: RPL - REGAL PARTNERS LIMITED
For more info SHARE ANALYSIS: TWE - TREASURY WINE ESTATES LIMITED
For more info SHARE ANALYSIS: WOW - WOOLWORTHS GROUP LIMITED
For more info SHARE ANALYSIS: XRO - XERO LIMITED