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Index Update: The S&P/ASX 200 slipped on Monday, closing down 13.70 points, or 0.16%, at 8,589.30. Despite the dip, the index has gained 0.88% over the past five sessions and sits just 0.58% below its 52-week high. Market sectors ended mixed, with six of eleven closing in the red alongside the broader index. Utilities outperformed, gaining 3.52% on the day and rising 4.97% over the past week. Meanwhile, investors are eyeing Tuesday’s Reserve Bank of Australia meeting, where a widely expected rate cut might provide further support to the economy and financial markets.
Macro Update: The Reserve Bank of Australia is widely tipped to cut interest rates on Tuesday, delivering its third reduction this year and marking the first consecutive policy easing since the pandemic in March 2020. Most economists believe the move is warranted after inflation eased to 2.4% in May, its lowest level in nearly four years. Australia’s four largest banks unanimously expect the cash rate will be lowered by 25 basis points to 3.6%. A cut would bring relief to mortgage holders and potentially stimulate the country’s sluggish economy, although some, including analysts at Citi and Bank of America, remain unconvinced of its necessity.
Top Market Movers: Origin Energy Limited (ASX: ORG) led gains on the ASX, rising 6.75% to close at AUD 11.55, followed by Helia Group Limited (ASX: HLI), up 3.29% at AUD 4.71, and SiteMinder Limited (ASX: SDR), which added 3.11% to AUD 4.64. Among the biggest decliners, Northern Star Resources Ltd (ASX: NST) dropped 8.65% to AUD 16.80, Clarity Pharmaceuticals Ltd (ASX: CU6) slid 6.46%, and HMC Capital Limited (ASX: HMC) fell 5.95%.
Commodity Update: The U.S. dollar stayed near its lowest since 2021 versus the euro and its weakest since 2015 against the Swiss franc on Monday, as markets awaited trade headlines ahead of President Donald Trump's tariff deadline. Gold fell USD0.82% to USD3,319.10, silver slipped 0.37% to USD36.99, copper declined 0.37% to USD9,830.45, and Brent crude dropped 1.11% to USD67.50 amid OPEC+ output hike concerns.
Our Stance: The S&P/ASX 200 closed 0.16% lower at 8,589.30 on Monday but remained within sight of its 52-week high, having gained 0.88% over the past five sessions. Investor focus is firmly on Tuesday’s Reserve Bank of Australia meeting, where a widely expected rate cut, driven by easing inflation, could offer fresh support to household spending and economic growth. While a rate reduction may lift sentiment, persistent global headwinds and subdued commodity prices suggest that market momentum may face continued pressure in the near term. The outlook remains cautiously optimistic, contingent on central bank actions and global economic developments.
The S&P/ASX 200 Index experienced a challenging trading session, closing 13.70 points lower and forming a bearish candlestick pattern, which was accompanied by increased trading volume. Despite this weakness, the index remains positioned above its 50-period Simple Moving Average (SMA), which now acts as a critical dynamic support level. On the daily chart, a significant horizontal support zone is observed around the 8,280 mark, making this a key level to monitor. Holding above this threshold could help consolidate recent gains and reinforce confidence in the index’s upward trajectory. Additionally, the index’s position above the 21-period SMA on the weekly chart is encouraging, suggesting the potential for sustained momentum over the longer term. This alignment of key technical indicators across multiple timeframes supports a broadly bullish outlook for the index.
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