News

The Technology Select Sector ETF (XLK) has experienced its worst 10-day relative performance against the S&P 500 since 2002, signalling a significant sector rotation away from big tech. This underperformance matters because tech has been the primary driver of US equity gains for years—any sustained weakness here could reshape market leadership and impact dividend-focused or defensive portfolios. Australian investors should watch whether this reflects genuine earnings concerns, valuation reset, or temporary profit-taking, as ASX tech and healthcare names often track US tech sentiment closely.

CSIRO research shows battery storage has become cost-competitive with gas for peak power, a major shift driven by falling battery prices and surging data centre demand pushing gas prices higher. This is bullish for Australia's renewable energy transition and battery manufacturers, but bearish for traditional gas utilities and thermal generation. For ASX investors, this signals accelerating capital reallocation toward battery and renewable stocks, while legacy gas-dependent power companies face structural headwinds—watch ASX energy stocks and upcoming grid investment announcements from the AEMO.

U.S. inflation is broadening its cooling trend across multiple CPI components—a sign that price pressures are easing beyond just energy and goods. This matters because persistent inflation forces central banks to keep rates higher for longer, which constrains growth and asset valuations. If this trend holds, it strengthens the case for the Fed to pause or cut rates later in 2024, which would support equities and ease borrowing costs globally. For Australian investors, a more dovish Fed typically weakens the USD, supporting the AUD and making U.S. assets relatively cheaper, while also reducing upside pressure on RBA rates.

US inflation data came in softer than forecast in June, marking the slowest pace in six years—a significant win for the Federal Reserve's rate-hiking campaign and a potential catalyst for crypto recovery. Bitcoin's push toward $64k reflects renewed risk appetite as lower inflation reduces the likelihood of further rate hikes, which typically weigh on higher-risk assets. Australian investors should watch the AUD/USD reaction closely: softer US inflation may delay Fed rate cuts and keep the USD supported, while the RBA continues its own tightening cycle, creating mixed signals for the Aussie dollar and ASX growth stocks.

U.S. headline CPI posted its largest monthly decline since April 2020, signalling disinflation momentum as price pressures ease across the economy. This is a critical datapoint for the Federal Reserve, potentially supporting a case for rate cuts or holding steady rather than further tightening—good news for growth-sensitive stocks and tech. For Australian investors, a cooling U.S. inflation picture could strengthen the AUD if it prompts the Fed to pivot dovish sooner than expected, while also improving conditions for ASX200 earnings-dependent companies exposed to U.S. consumer demand.

Wall Street rallied on softer-than-expected inflation data, which eases pressure on the Federal Reserve to maintain aggressive interest rate hikes, while rising oil prices provided support to energy stocks. This mix is moderately positive for equities—lower inflation reduces recession fears, but higher oil could eventually feed back into pricing pressures. For Australian investors, a weaker US inflation print typically supports the ASX via a softer USD and lower AUD borrowing costs, though higher oil prices benefit local energy stocks like Woodside and Santos.

The CSIRO's GenCost report directly challenges Coalition and One Nation claims that ditching net zero commitments would lower electricity prices, finding instead that generation costs will rise post-2030 regardless of emissions policy—a significant input into Australia's energy and political debate heading into the election cycle. The report suggests nuclear would be the most expensive generation option, potentially shifting the conversation around energy policy solutions. For Australian investors, this undermines the political narrative around quick energy cost fixes and suggests the underlying driver of price pressures is structural (ageing coal plants, grid investment needs) rather than policy-dependent, which has implications for utility earnings forecasts and energy sector valuations.

Consumer inflation came in cooler than expected at 3.5% year-on-year versus the forecast 3.8%, driven by easing energy prices. This is a significant data point for the RBA's interest rate decisions—lower-than-expected inflation strengthens the case for holding or cutting rates, potentially supporting equity markets and reducing mortgage stress for Australian households. Watch for the RBA's next policy decision and whether this trend continues; sustained disinflation could reshape market expectations around borrowing costs over the next 12 months.

Softer-than-expected CPI data typically signals easing inflation pressures, which reduces the likelihood of aggressive interest rate hikes and supports lower bond yields. This is positive for growth and technology stocks, which benefit from a lower discount rate environment. For Australian investors, this development influences RBA policy expectations and has knock-on effects for ASX growth stocks and the AUD as US yield differentials narrow—watch for potential AUD strength and a reassessment of local rate cycle expectations.

US inflation cooled to 3.5% in June, down from May's three-year high of 4.2%, driven primarily by a temporary ceasefire in geopolitical tensions that lowered energy prices. Core inflation also eased to 2.6%, suggesting underlying price pressures are moderating — a key signal the Fed will monitor for future rate decisions. However, the ceasefire has ended and oil prices are climbing again, creating uncertainty; Australian investors should watch whether energy prices stabilise, as this affects both USD strength (impacting AUD) and domestic petrol costs, plus potential implications for RBA policy if imported inflation re-accelerates.

US inflation cooling to 3.5% in June marks meaningful progress toward the Fed's 2% target, driven primarily by falling gasoline prices. This data supports the case for interest rate cuts later this year, which could boost equity markets and weaken the US dollar—both positive for Australian investors. However, the geopolitical risk flagged around Middle East tensions is a genuine wildcard: any supply disruption could reverse energy price declines and reignite inflation, potentially forcing the Fed to hold rates higher for longer. Watch crude oil prices and Fed commentary closely—they'll signal whether this inflation relief sticks.

Consumer prices have fallen for the first time since the 2020 pandemic, driven largely by a collapse in energy costs following Iran ceasefire negotiations. This is a critical milestone in the inflation fight—if sustained, it could reduce pressure on central banks to maintain elevated interest rates, potentially supporting equity valuations and borrowing costs. However, the fragility of Middle East peace means renewed conflict could quickly reverse these gains, spiking oil and energy prices again. Australian investors should monitor both the geopolitical situation and RBA rhetoric; any sustained disinflation could shift the case for rate cuts in 2024, while new escalation would reignite inflation fears.

U.S. June CPI contracted 0.4% month-on-month, a significant deflationary signal that suggests inflation may be cooling faster than expected. This data strengthens the case against further Fed rate hikes and could even signal the peak of the hiking cycle, which would be positive for growth-sensitive assets like equities and technology stocks that have been weighed down by rising rates. For Australian investors, a pivot away from U.S. rate hikes would likely support the AUD/USD exchange rate and reduce downside pressure on local equities, particularly tech and growth stocks listed on the ASX.

CPI decelerated to 3.5% year-on-year in June, below expectations and down from 4.2% previously—a significant step toward the RBA's 2-3% target band. This cooler inflation reading strengthens the case for near-term interest rate cuts, which would be bullish for bond markets, consumer discretionary stocks, and the broader ASX. Watch the RBA's next decision closely; sustained disinflation below 4% puts rate cuts firmly back on the table after months of hold-steady messaging.

The Australian government is fast-tracking approval processes for AI datacentres and establishing a dedicated Office of AI to streamline investment decisions. This is moderately bullish for Australian tech and infrastructure companies seeking to capitalise on AI investment, potentially reducing project timelines and regulatory uncertainty. Investors should monitor whether faster approvals translate to actual capital deployment, though the announcement signals government commitment to positioning Australia as an AI hub—relevant for infrastructure operators and tech-focused ASX names.

The US June CPI release today is a tier-1 economic data point that will significantly influence Fed policy expectations and risk asset pricing, including Bitcoin. Economists expect headline inflation to cool to 3.8% YoY from 5.4%, which—if delivered—would support the narrative of disinflation and potentially push back against aggressive rate-hike expectations. This matters for Australian investors because a softer US inflation print could weaken the USD, supporting commodities and emerging-market assets (AUD typically benefits), while also affecting ASX-listed companies with US earnings exposure. Watch for immediate market reactions in bonds, equities, and crypto as traders reassess Fed terminal rate expectations.

China's exports hit a record with 1m cars shipped in June and overall trade up 27%, signalling robust demand for Chinese goods and a potential $1tn trade surplus looming. This is bearish for global trade dynamics—it raises the odds of escalating US and EU tariffs on Chinese products, which could create supply chain disruption and inflation headwinds for developed economies including Australia. For Australian investors, the key risk is reciprocal tariffs hitting Chinese demand for commodities; watch how Beijing responds to Western protectionism and whether resource exporters like BHP and Rio Tinto face demand headwinds.

This preview suggests June inflation likely moderated due to falling energy prices, which would be the first meaningful easing since the RBA's rate hiking cycle began. If confirmed when official CPI data arrives, softer headline inflation could support the case for near-term rate cuts—critical context for the RBA's July decision. Watch the actual CPI release for core inflation trends and whether the moderation is broad-based or driven solely by volatile energy components.

Markets are holding steady ahead of two key catalysts: major bank earnings reports and inflation data releases. Bank earnings matter because they signal how profitable financial institutions are in the current interest rate environment, while inflation data directly influences whether central banks will adjust rates. For Australian investors, this is particularly relevant given the RBA's recent policy stance and how ASX banks (like CBA, NAB, Westpac) perform under varying rate scenarios—stronger inflation might suggest higher-for-longer rates, which could pressurize bank margins. Watch for forward guidance from bank management on loan growth and net interest margins.

China's export growth is being driven by AI-related products and semiconductors, offsetting weakness in domestic consumption and investment. This matters for Australian investors because China's export strength supports commodity demand and Australian exporters, but the underlying domestic slowdown signals longer-term growth concerns for the world's second-largest economy. Watch for further trade data and any policy stimulus from Beijing—a sustained export-led recovery without domestic rebalancing could pressure commodity prices if global demand softens.