Daily Market Reports | 8:40 AM
This story features VAULT MINERALS LIMITED, and other companies. For more info SHARE ANALYSIS: VAU
The company is included in ASX300 and ALL-ORDS
The RBA threw a spanner in the markets’ almost universally anticipated -25bps rate cut, but both ASX200 and the AUD recovered to the previous day’s levels.
The RBA will now cut in August, right?
After a muted overnight session, with more Trump tariff rumblings on copper and pharmaceuticals, the ASX200 futures suggest a slightly softer start to Wednesday.
| World Overnight | |||
| SPI Overnight | 8570.00 | – 8.00 | – 0.09% |
| S&P ASX 200 | 8590.70 | + 1.40 | 0.02% |
| S&P500 | 6225.52 | – 4.46 | – 0.07% |
| Nasdaq Comp | 20418.46 | + 5.95 | 0.03% |
| DJIA | 44240.76 | – 165.60 | – 0.37% |
| S&P500 VIX | 16.81 | – 0.98 | – 5.51% |
| US 10-year yield | 4.42 | + 0.02 | 0.46% |
| USD Index | 97.14 | – 0.07 | – 0.07% |
| FTSE100 | 8854.18 | + 47.65 | 0.54% |
| DAX30 | 24206.91 | + 133.24 | 0.55% |
Good Morning,
NAB Markets Today Research, Extract
Yesterday, President Trump indicated to reporters there was still room for trade negotiations for countries that had received their letters with new tariff rates to be in effect on 1 August.
New tariff rates were generally close to the levels Liberation Day. Trump said if countries call with a different offer “and if I like it, we’ll do it.” Early yesterday in Sydney, Trump said the deadline was firm but not 100% firm, but he hardened his stance overnight, saying he would offer no additional delays on the country-specific tariffs.
In other tariff news overnight, on sectoral tariffs Trump said he planned a 50% tariff on copper. On pharmaceuticals, he said higher tariffs wouldn’t come in for another 12-18 months, but “they’re going to be tariffed at a very, very, high rate, like 200%…we’ll give them a certain period of time to get their act together”. US copper prices are up over 10% to a record high, taking the year-to-date gain to about 35% as markets have been anticipating a higher tariff.
There have been plenty of rumours about where US-EU trade negotiations sit, with diplomats relaying conversations. US Commerce Secretary Lutnick said the EU has made real offers to the US and the bloc is indicating it will open markets, though Trump also told reporters that despite progress with the European Union on a trade deal, frustration over the bloc’s taxes and fines targeting US technology firms could result in him unilaterally declaring a new tariff rate within the next two days.
The reaction in markets was once again relatively muted, with, so far, the net of the tariff decisions being an effective delay to the 9 July deadline. US equity markets traded with a cautious tone. The S&P500 traded a narrow range through the day and is down -0.1%.
US yields were higher and modestly higher and curves steeper for a second day, though yields are off their highs. The 30-year Treasury approached the 5% mark again, seeing an intraday high of 4.97 before paring back to 4.92.
The 10yr yield is 2bp higher at 4.40%, after trading near 4.43% earlier in the day. The 3-year bond auction drew lower indirect bidding (54.1% down from 66.8%) but the coverage ratio was ok. Global rates are also higher, with UK and Germany 10-year rates up 4-5bps.
US economic data releases were second tier. Year-ahead inflation expectations from the NY Fed’s survey fell -18bps to a five-month low of 3.02% in June, while the three and five-year measures were unchanged at 3.00% and 2.61% respectively. The headline NFIB index of small business sentiment was little changed at 98.6.
The RBA surprised markets and the consensus view of economists by holding the cash rate at 3.85% with “wider economic conditions evolving broadly as expected, the Board [Judging] that it could wait for a little more information to confirm that inflation remains on track to reach 2.5 per cent on a sustainable basis”.
By August, the RBA will have June Employment (17 July) and Q2 CPI (30 July) as well as additional partial indicators of consumption. The market was nearly fully priced for a cut. The Bank also decided to published unattributed votes, with yesterday’s decision carried 6-3. Governor Bullock emphasised in the press conference the decision to hold was about ‘timing rather than direction‘.
Australian yields and the AUD jumped higher on the decision. Market pricing though has generally taken the timing rather than direction’ messaging in stride, with -64bp of cuts priced by the end of the year and the cash rate priced to fall to near 3%, terminal pricing only a few bps higher than prior to the meeting.
The AUD has been the best performing of the majors, albeit on a day of small net currency movements, and it is up 0.6% over the past 24 hours at 0.6531, off its intraday high around 0.6548.
JPY is the weakest of the G10 currencies as the market digests the higher tariff rates announced yesterday and challenges getting a trade agreement across the line, complicated by the upcoming election.
Commodities Update: ANZ Bank Morning Focus Extract
The copper market was rattled after President Trump announced he would implement a 50% tariff on imports of the metal. The levy is part of a broader set of looming sectoral tariffs which are targeting drugs, semiconductors and metals. The announcement sent copper prices trading on the New York-based Comex exchange surging to an unprecedented 25% premium over futures on the London Metal Exchange.
The copper industry has been bracing for these levies since February, which has already seen increased flows into the US. Inventories in Comex warehouses have risen more than 130% to reach more than 221kt since the start of the year. Trump is expected to move forward with the levies once the Commerce Department’s formal review is concluded, although the timing remains uncertain. It’s also uncertain whether there will be any country exemptions.
Chile, the world’s biggest producer of the metal, contributes around 70% of the 700kt of copper the US imports annually. Chilean officials remained in the dark about the Commerce Department investigation or any formal tariffs on its copper exports to the US.
Iron ore futures gained amid the prospect of easing trade tensions. After threatening to impose higher tariffs on its trading partners, Trump signalled he’s open to more trade negotiations. Ferrous markets have become sensitive to trade headlines, amid fears they could impact global demand for steel and its raw materials. Approximately 10% of China’s steel output is exported to international markets. The US has already placed a 50% levy on imports of steel.
Gold fell as investors took solace from Trump’s decision to delay the start of increased duties on several trading partners. The precious metal fell as much as -1.5% as they took the move as opening the possibility of more trade deals to be negotiated before duties are formally implemented on 1 August.
Treasury yields and the USD rose, putting pressure on gold, a non-interest-bearing asset. Nevertheless, the precious metal remains well supported by central banks. They are likely to continue adding gold to their reserves as they diversify away from the USD.
Crude oil prices gained amid renewed tensions in the Middle East. Yemen’s Houthi rebels launched an attack on a Liberian-flagged cargo ship in the Red Sea, killing at least two crew members and leaving the vessel without power. It also raised concerns the Iranian-backed militant groups would renew efforts to disrupt oil tankers in the region.
The number of tankers passing through the Bab el-Mandeb Strait has remained low after falling sharply in late 2023 following earlier Houthi attacks. Tensions were further heightened after Iranian Foreign Minister Abbas Araghchi wrote in the FT that Iran has good reason to doubt further dialogue with the US. Nevertheless, prices have held up relatively well, despite OPEC’s decision to raise production in August by 548kb/d. This suggests the physical market is relatively tight now.
European gas markets pushed higher as sweltering temperatures raised the spectre of stronger fuel demand. This could be exacerbated by nuclear reactors being forced to curb power generation.
Rising electricity demand in China is failing to entice buyers back into the spot Asian LNG market. Sweltering temperatures have already seen China’s electricity load reach a record high of 1.47bn kW on 4 July, according to National Energy Administration data. The NEA also expects peak electricity demand to be about 100GW higher this summer than last year. However, some of this additional demand is being met by renewable energy.
Corporate news in Australia
-Speculation around Vault Minerals ((VAU)) being a takeover target from foreign buyers sent the shares higher yesterday.
-MYOB is entering the business banking market with transaction accounts for sole traders with its accompanying accounting software.
-DroneShield ((DRO)) has secured a $11.7m R&D deal with a Five Eyes defence customer.
-Cochlear ((COH)) has received FDA go ahead for triple launch product, including smart implant system.
-Spanish Acciona is seeking to sell at least 50% of is holding in Kwinana Energy Recovery.
On the calendar today:
-NZ RBNZ cash rate
-CH June CPI, PPI
-US June FOMC Mins
-US May consumer credit
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 3313.31 | – 33.04 | – 0.99% |
| Silver (oz) | 36.90 | – 0.05 | – 0.14% |
| Copper (lb) | 5.51 | + 0.50 | 9.98% |
| Aluminium (lb) | 1.18 | + 0.01 | 0.97% |
| Nickel (lb) | 6.78 | + 0.01 | 0.13% |
| Zinc (lb) | 1.24 | + 0.02 | 1.64% |
| West Texas Crude | 68.21 | + 0.10 | 0.15% |
| Brent Crude | 69.96 | + 0.37 | 0.53% |
| Iron Ore (t) | 95.55 | + 0.33 | 0.35% |
The Australian share market over the past thirty days
| Index | 08 Jul 2025 | Week To Date | Month To Date (Jul) | Quarter To Date (Jul-Sep) | Year To Date (2025) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8590.70 | -0.14% | 0.57% | 0.57% | 5.29% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| AFG | Australian Finance Group | Downgrade to Neutral from Buy | Citi |
| AMP | AMP | Upgrade to Buy from Hold | Ord Minnett |
| ARB | ARB Corp | Upgrade to Buy from Neutral | Citi |
| BOE | Boss Energy | Downgrade to Neutral from Outperform | Macquarie |
| CBO | Cobram Estate Olives | Downgrade to Accumulate from Buy | Ord Minnett |
| DMP | Domino’s Pizza Enterprises | Upgrade to Buy from Neutral | UBS |
| HUB | Hub24 | Upgrade to Buy from Neutral | UBS |
| PME | Pro Medicus | Downgrade to Hold from Buy | Bell Potter |
| PPM | Pepper Money | Downgrade to Neutral from Buy | Citi |
| STO | Santos | Downgrade to Equal-weight from Overweight | Morgan Stanley |
| TLC | Lottery Corp | Downgrade to Sell from Buy | Citi |
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.)
(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author’s and not by association FNArena’s – see disclaimer on the website)
All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts on the website and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.
Find out why FNArena subscribers like the service so much: “Your Feedback (Thank You)” – Warning this story contains unashamedly positive feedback on the service provided. www.fnarena.com
FNArena is proud about its track record and past achievements: Ten Years On
Click to view our Glossary of Financial Terms
CHARTS
For more info SHARE ANALYSIS: COH - COCHLEAR LIMITED
For more info SHARE ANALYSIS: DRO - DRONESHIELD LIMITED
For more info SHARE ANALYSIS: VAU - VAULT MINERALS LIMITED