The Overnight Report: Copper On The Run

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This story features SUPERLOOP LIMITED, and other companies.
For more info SHARE ANALYSIS: SLC
The company is included in ASX200, ASX300 and ALL-ORDS

US indices recorded fresh all time highs for a fith consecutive day, with underlying breadth broadening.

Google fell as parent company Alphabet announced hefty stock sales to underpin its investment spending for US$180bn-US$190bn in 2026 capex.

After a flat performance yesterday, ASX200 futures are pointing to a positive start ahead of 1Q GDP data today.

Good Morning,

As technology rallied 4.7% yesterday, the ASX200 traded down -5pts to 8724, led by the property sector.

First quarter GDP is due out at 11.30 AEST today. 

Today, Superloop ((SLC)) and The Lottery Corp ((TLC)) have Investor Briefings. 

For more details see https://fnarena.com/index.php/financial-news/calendar/

And to stay up to date on earnings season, check out the Corporate Results Monitor:

https://fnarena.com/index.php/reporting_season/

Today’s Big Picture, J.L.Bernstein

Alphabet’s US$80 Billion Capital Call 

Alphabet $GOOGL is raising US$80 billion through stock sales to fund its data center buildout, with Berkshire Hathaway taking US$10 billion of it.

Google already throws off plenty of cash, so raising this much tells you one thing. The spending on AI infrastructure is nowhere near done.

The Hardware Trade Is Still Winning 

Hewlett Packard Enterprise $HPE posted a record order backlog driven by server demand.

The same day, Nvidia’s CEO stood on stage and called Marvell Technology $MRVL the next trillion-dollar company.

Money is flowing to the firms making the physical gear while enterprise software gets sold off.

Job Openings Run Hot 

The April job openings report came in above 7.6 million, the highest in nearly two years and a big beat.

Layoffs fell too. It’s still a “no hire, no fire” market, and a labor market this firm takes the pressure off the Fed to start cutting rates.

ANZ Bank, Australian Morning Focus

Equity markets rose modestly, while US bond yields and oil were stable, with little change in the current US-Iran impasse. The S&P500 was up 0.13%. The EuroStoxx50 ended its session up 1.2% and the FTSE 100 rose 0.3%.

The yield on the US 10y Treasury note was unchanged at 4.45%.

The active WTI oil future rose 2.2% to US$93.4/bbl. Gold was weaker at US$4,488.9/oz.

Preliminary HICP inflation data were close to expectations in May, and did not challenge either the markets or our assessment that the ECB will hike interest rates 25bp at the next meeting in June, as has been well signalled by policymakers.

Headline HICP inflation accelerated from 3.0% y/y to 3.2% y/y, while core inflation accelerated from 2.2% y/y to 2.5% y/y. Annual services inflation remains broadly stable at 2.9% y/y, a level we judge to be consistent with the ECB’s 2% inflation target.

However, activity, labour market and wage dynamics all highlight the risk of further moderation ahead and concern us about the ECB’s signalled intent to tighten policy. The euro area services PMI is at its lowest level since the recession following the debt crisis.

Tightening into a fragile growth environment risks undermining the sustainable achievement of the ECB’s 2% inflation target in the medium term once the energy shock unwinds.

US jobs data: Despite the strong headline JOLTS figure, which saw job openings rise 731k to 7.618m in April, the underlying details told a more cautionary tale as to stabilisation in the US labour market.

Of the 731k rise in job openings, 688k came from one industry: professional and business services. In contrast to the sharp rise in job openings, hiring fell 419k in April.

That may reflect firms holding off on hiring decisions amid current uncertainty. In any case, whilst the job openings to unemployed ratio rose to 1.03, current labour market conditions are not contributing excess inflation pressure and remain consistent with further moderation in wage growth and underlying services disinflation, provided that the energy price shock does not broaden.

We remain of the view that the FOMC will remain on hold for the next six months, and resume cutting interest rates in December.

NAB Markets Today, GDP extract

We now expect GDP growth of 0.3% qoq and 2.4% yoy, on the back of a larger subtraction from net trade than expected. The RBA pencilled in 2.6% yoy back in May.

Today’s GDP print is set to show growth momentum slowing from its too-hot H2 2025 pace.

Strength in private demand components will overstate momentum due to the impact of the unwind of electricity subsidies and the import intensity of business investment.

The data reflect Q1, and so are largely historical, so further refining the assessment of the starting point for the economy facing into the Middle East shock, rather than giving insight on recent momentum.

Gold & Copper, Tony Sycamore, IG 

The Middle East conflict has now entered its third month, and the resulting swings in energy prices and risk sentiment (more lately around the ceasefire process) continue to drive sharp moves across many asset classes, including metals.

While precious metals like gold are feeling the pressure from higher energy prices, a stronger US dollar and rising yields, base metals, particularly copper, are responding to a very different set of drivers.

Gold finished lower at US$4484 (-1.23%) on Tuesday as the US dollar strengthened on robust US economic data. The retreat was compounded by fresh hurdles in the US-Iran ceasefire negotiations, which pushed oil prices higher and triggered a decidedly more hawkish shift in the US rates market.

After an extraordinary rally through the second half of 2025 that carried gold to an all-time high of US$5602, the metal has found the going much tougher of late. It has now declined for three consecutive months and recently touched a nine-week low of US$4366.

At its current level near US$4486, gold remains roughly -20% below its January record high and up just 4% for the year.

Gold’s fortunes remain inextricably linked to the situation in the Middle East, which continues to act as the primary lever for energy prices, inflation expectations, the US dollar, and Treasury yields.

On one hand, a formal extension of the US-Iran ceasefire would, in theory, further remove some of the geopolitical safe-haven bid that so effectively fuelled gold’s pre-conflict surge.

Conversely, a deal would pave the way for lower oil prices and eased inflation fears, potentially leading to lower yields, a softer greenback, and a dialling back of Fed rate-hike expectations, all of which are inherently gold-supportive.

If a ceasefire agreement can’t be found and the conflict resumes, gold would likely extend its declines on risk aversion flows.

This comes after the massive increase in participation by retail traders in the precious metal bull market, which during periods of risk aversion has seen it trade more like a risk asset than a traditional safe haven.

Gold Technical Analysis

We turned bullish on gold in early April after it reached the US$4200 wave equality target, having held a bearish view for much of March following its rejection of resistance near US$5419.

After that point, gold hit a high in mid-April high of US$4891, before falling back to last week’s US$4366 low.

Looking ahead, as long as gold remains above support near US$4400 coming from the 200-day moving average and above last week’s US$4366 low, we remain constructive on the outlook for gold, looking for a rebound back to the US$4900/5000 area.

Conviction in this view would increase on a sustained break above trend line resistance at US$4600.

Aware that a sustained break below support at US$4400/US$4360ish would warn of a retest and possible break of the March US$4098 low.

Copper

While gold has been shackled by the conflict in the Middle East and a hawkish shift in US rates, Dr Copper has been busy carving out a very different path.

Copper futures finished higher, not far from the recent US$6.7160 record high — bolstered by another session of resilient US economic data.

The spark for copper overnight gains was the May ISM Manufacturing PMI. The headline index jumped to 54, from 52.7 the previous month; its fastest pace in four years.

Crucially for copper, the New Orders component lifted to 56.8 from 54.1, indicating demand for raw materials is accelerating.

In the world of base metals, “good news is good news.” While robust data traditionally scares gold investors due to higher yields and a stronger dollar, it emboldens copper bulls who view it as a green light for future industrial consumption and broader global economic health.

Beyond the data, copper continues to be supported by a “perfect storm” of structural drivers which has contributed to its 15% gain this year. Supply remains precarious following ongoing disruptions at major mines in South America and a persistent lack of new “tier-one” projects.

Layered on top of this is the drive for AI dominance. The massive expansion of data centres required to house AI infrastructure is incredibly copper-intensive, creating a new, non-cyclical pillar of demand that is fundamentally tightening the market.

Copper Technical Analysis

The technical picture for copper remains decidedly more bullish than that of its precious metal cousin. After a false start midway through last year, copper has convincingly broken higher this year, carving out a series of higher highs and higher lows, with the most recent rally taking copper to a record high of US$6.7160.

After a sharp -8.4% pullback from that peak, the metal has found solid buying interest in the US$6.15/US$6.12 horizontal support band and is now attempting to push back toward the recent highs.

As long as price holds above the US$6.15/US$6.12 support band (sustained basis) the uptrend remains firmly in place and a retest and break of the US$6.610 record high is likely before a push towards US$7.00.

Aware that a sustained break below support at US$6.15/US6.12ish would warn of a deeper pullback towards US$5.90/US$5.80ish.  

China: The export strategy – Winning slowly to avoid losing fast, Oxford Economics 

The last eight years have shown that tariffs alone can’t dislodge Chinese manufacturers’ cost, scale, and supply-chain advantages.

While an export-led growth strategy is risky and fragile, it’s a critical backbone to headline stabilisation while the economy’s growth transition remains incomplete. 

In our view, Beijing is not trying to maximise export share at any cost. If that were the objective, policy would be pushing much harder for export volumes.

Instead, the ‘anti-involution’ campaign, VAT export rebate cuts on solar and batteries, and Five-Year Plan’s goal of a ‘modern industrial system’ are consistent with a more disciplined approach: keeping China competitive while limiting the risk of a sharper global backlash.

We would therefore expect further targeted measures aimed at managing the pace of global export share gains, though their success in actually slowing flow is less certain while domestic demand stays weak.

Since the war in Iran, China’s overcapacity in some upstream sectors such as alumina and ammonium sulphate has given it enough supply elasticity to meet demand in disrupted sectors, more than offsetting the drag from the various export controls China has put in place since March.

Even with renminbi appreciation and rising US dollar export prices, China’s relative price is likely to improve because competitor PPI is likely to rise faster. We therefore expect Chinese exporters to deliver another year of strong volume growth.

But this can’t last forever.

Our central view is that several constraints may bind at once by 2028. By then, the AI tech production cycle may have normalised more clearly, ex-China clean-tech capacity would have expanded, and local-content rules may have tightened.

More crucially, Chinese exporters may find it harder to keep absorbing tariffs through profit margins if pressures from excess capacity persists.

Corporate news in Australia:

• Heartland Bank and TSB Bank have agreed to merge, creating a larger challenger bank in New Zealand
• Collins Foods ((KF)) is expanding its German KFC footprint by 50% through the acquisition of Bavarian outlets
• Kroll has supported Atlas Arteria’s ((ALX)) valuation and rejected IFM’s $4.75 per share takeover offer as inadequate
• Adamantem has lodged a bid for energy reseller Zembl
• Tasmea ((TEA)) is acquiring Maxim for $254m, expanding its exposure to data centre infrastructure
• Northern Star Resources ((NST)) has engaged Elliott Management amid pressure for a strategic review and potential sale
• I Squared has withdrawn from the bidding process for oOh!media ((OML))
• Dexus ((DXS)) is reportedly under pressure to sell assets as redemptions escalate within its infrastructure funds business
• Tyro Payments ((TYR)) is attracting renewed takeover interest 
• PEP-owned Up Education is considering an acquisition of Keypath ahead of a potential 2027 sale process
• Morningstar values SpaceX at US$780bn, well below the company’s reported IPO valuation aspirations
• Frontier Energy ((FHE)) is considering a $90m capital raising supported by Perth-based family offices
• Megaport ((MP1)) has launched an $825m capital raising 

On the calendar today:

-AU 1Q GDP

-EZ April PPI

-US May ADP data

-XX Global PMIs

-GENESIS MINERALS LIMITED ((GMD)) AGM

-SUPERLOOP LIMITED ((SLC)) investor briefing

-LOTTERY CORPORATION LIMITED ((TLC)) investor briefing

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

The Australian share market over the past thirty days…

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