Index Update: The Australian share market advanced on Friday, tracking gains on Wall Street as renewed expectations of further US Federal Reserve rate cuts lifted investor sentiment. The S&P/ASX 200 rose 33.20 points, or 0.39%, to close at 8,621.40, moving back above its 20-day moving average. Despite the daily rise, the benchmark has slipped 0.87% over the past five sessions, while remaining up 5.67% year to date. Market breadth was positive, with 7 of the 11 sectors finishing higher. Information Technology led the gains, climbing 2.22% as it rebounded from recent weakness, although the sector remains down 1.65% over the past five days.

Macro Update: Global macroeconomic conditions remain cautiously balanced as major economies show signs of easing inflation alongside uneven growth. In the US, price pressures have cooled in recent months. Labor Department data showed consumer prices rose 2.7% year-on-year in November, down from 3% in September and below expectations, strengthening the case for further Federal Reserve rate cuts. In Europe, the ECB held rates steady while offering a more optimistic growth outlook, supporting the euro. Ireland’s central bank upgraded growth forecasts, citing resilient consumer spending despite exposure to shifts in US economic policy. Meanwhile, in the UK, the Bank of England is widely expected to cut interest rates to 3.75% from 4%, with investors pricing in one or two additional cuts in 2026.

Top Market Movers: On Friday, Australian equities recorded notable moves at both ends of the market, with DroneShield Limited (ASX:DRO) rising 11.65% to AUD 2.780, Boss Energy Ltd (ASX:BOE) advancing 11.44% to AUD 1.315 and Paladin Energy Ltd (ASX:PDN) adding 9.25% to AUD 9.090. On the downside, Netwealth Group Limited (ASX:NWL) declined 6.48% to AUD 25.250, Premier Investments Limited (ASX:PMV) eased 4.71% to AUD 13.760 and Reliance Worldwide Corporation Limited (ASX:RWC) fell 3.41% to AUD 3.680.

Commodity Update: The yen stayed near recent lows on Friday as traders awaited clarity on whether the Bank of Japan can sustain interest rate hikes into next year, while the euro edged lower after the central bank gave no signal on tightening. Precious metals weakened, with gold down 0.51% to USD 4,341.30, silver slipping 0.93% to USD 64.62, and copper marginally higher by 0.01% to USD 11,717.50. Brent crude fell 0.23% to USD 59.83, heading for a second straight weekly decline as Russia-Ukraine peace hopes offset Venezuelan supply concerns.

Our Stance: Market conditions remain constructive but selective. The ASX rebound reflects improved global risk sentiment driven by softer US inflation and growing confidence in future Federal Reserve rate cuts, though short-term momentum remains uneven after recent pullbacks. Leadership from Information Technology suggests appetite for growth assets is returning, while strength in energy names highlights ongoing thematic support. Globally, easing inflation across major economies provides policy flexibility, yet growth remains patchy, reinforcing the need for disciplined positioning. Commodity markets signal caution, with weaker precious metals and softer oil prices tempering inflation risks but also pointing to slower demand momentum.

In its latest session, the S&P/ASX 200 Index advanced 40.00 points to close at 8,628.20, supported by a small bullish candlestick formation and strong trading volumes, both of which signal sustained investor confidence. On the daily chart, the index continues to trade below its 50-period Simple Moving Average (SMA), which remains a key dynamic resistance level. A critical support zone near 8,550.70 is in focus, and holding above this area is essential for maintaining the near-term bullish structure. Successfully defending this level would allow the index to consolidate recent gains while reinforcing confidence in the broader upward trajectory. From a weekly perspective, the index trades comfortably above its 50-period SMA, underscoring a constructive longer-term outlook. Overall, the technical setup continues to suggest potential for further upside, provided near-term support levels remain intact.