26 July Markets at a glance

Around the Grounds

It’s a very different session in Asia today, with the local share market recovering some of yesterday’s sell-off. The S&P/ASX 200 is up just shy of 1% in a broad-based recovery led by the mining and energy plays. Globally, traders remain on the sidelines waiting for key US PCE data later tonight, more on that later.

T the mining index has climbed 1.5%, despite continued weakness in iron ore prices. Energy stocks have followed suit, rising 1.4% as the price of oil ticked higher on stronger than expected US GDP data overnight, while the banks are all in the black.

Gold though, is bucking the trend, down nearly 3% after bullion slipped overnight to touch an over two-week low.

Looking ahead on the corporate calendar locally it’s all about reporting season. Credit Corp group (CCP), Rio Tinto (RIO), Pinnacle Investment (PNI), Resmed (RMD) and Block (formerly known as AfterPay) (SQ2) all hand down numbers.

In the news

Ahead of those numbers though plenty of stock news to go through in today’s trade.

Australian listed shares of Mineral Resources (MIN) have surged, marking their biggest intraday percentage gain since January, as the iron ore-lithium miner reports a 9% jump in FY24 production volume.

The stock though is down 2.5% so far this week, and on track for its third consecutive weekly fall if losses hold.

Monadelphous (MND) shares are on the rise as the engineering company secures construction contracts worth AU$200 million at Woodside’s (WDS) Pluto LNG Facility. The stock is down 15.4% this year, as of last close.

Finally, at the smaller end of town, Australia’s BSA Ltd (BSA) has popped nearly 10% touching its highest level since mid-April 2022 as the company posts a rise in quarterly revenue to AU$68.4 million. EBITDA was also higher.

The stock is up 21% YTD, as of last close.

Going global

On the global stage, kicking things off in forex, the Japanese Yen is poised for its strongest week in three months as traders continue to unwind long-held bets against the frail currency ahead of that crucial US PCE print, which could cement a rate cut from the Fed in September.

The yen has made a staggering recovery after starting the month at a 38 year low against the greenback as a global stock rout drives investors toward safer assets. The reversal though follows speculation of interventions from Tokyo early in July.

All eyes now turn to the Bank of Japan meeting next week where markets are pricing in a 64% chance the BoJ will HIKE interest rates by 10 basis points, and while today’s core inflation print from the country accelerated for a third straight month, some analysts say the recent surge in the yen may allow the central bank to take its time when it comes to tightening policy. 

Back to the inflation data state side. Forecasts are for PCE, the Fed’s favoured measure of inflation, to come in at 0.1% on a monthly basis. If the print meets the market, it’s all but certain the FOMC will cut rates in September, with traders pricing in 66 basis points of easing this year, according to the CME FedWatch Tool.

Elsewhere in currencies, the big dollar is little changed, while the euro is a tad stronger but down 0.35% on the week, its steepest weekly decline since early June.

Finally, the Australian dollar is marginally higher in today’s trade, a shade above the near three-month low it touched yesterday, the local unit is set to end the week down 2%, its worst weekly performance since November 2023.  

Rounding it out across the region, Japan’s Nikkei 225 is on track to snap a seven-day losing streak, recovering from a three-month low in yesterday’s session as investors buy the dip. MSCI’s broadest index of global shares outside Japan however are lower, and US futures are pointing to relatively positive start to the final session of the US trading week.  

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