Index Update: Australian shares finished higher on Monday, with investors returning to technology stocks while keeping a close watch on developments in the Middle East following an agreement between Iran and the US to halt recent hostilities. The S&P/ASX 200 gained 59.20 points, or 0.68%, to close at 8,823.40, reclaiming its 200-day moving average in a positive technical signal for the benchmark index. Despite Monday's advance, the ASX 200 has remained virtually unchanged over the past five trading sessions and continues to trade around 4.12% below its 52-week high. Market sentiment was broadly positive, with eight of the index's 11 sectors closing in positive territory. Information Technology led the gains, surging 4.04% during the session and extending its five-day advance to 2.96%, making it the strongest-performing sector over the period.

Macro Update: Outgoing IMF Chief Economist Pierre-Olivier Gourinchas has backed efforts to reduce the Federal Reserve's reliance on strong forward guidance, calling the approach "entirely appropriate." According to Reuters, Gourinchas said rigid policy commitments can limit central banks' ability to respond to changing economic conditions. He pointed to the Fed's delayed response to surging U.S. inflation in 2021 and 2022, arguing that earlier promises to keep interest rates steady proved costly. While supporting less explicit guidance, Gourinchas said central banks would still need to provide some long-term direction, as financial markets naturally form expectations about future monetary policy.

Top Market Movers: Among the top gainers, Neuren Pharmaceuticals Limited (ASX:NEU) surged 36.07% to AUD 16.60, adding AUD 4.40. Life360 Inc. (ASX:360) climbed 11.64% to AUD 26.27, up AUD 2.74, while 4DMedical Limited (ASX:4DX) advanced 10.34% to AUD 4.59, gaining AUD 0.43. On the downside, Minerals 260 Limited (ASX:MI6) fell 4.12% to AUD 0.815, Catalyst Metals Limited (ASX:CYL) slipped 3.37% to AUD 5.17, and Kingsgate Consolidated Limited (ASX:KCN) declined 3.15% to AUD 5.22, losing AUD 0.17.

Commodity Update: The U.S. dollar traded with a weaker tone on Monday but remained on course for its strongest monthly performance in nearly a year as geopolitical tensions in the Gulf continued to support demand ahead of key U.S. labour market data, which could influence the Federal Reserve's interest rate outlook. Gold declined 0.27% to USD 4,085.75 per ounce, while silver fell 0.61% to USD 58.87. Copper gained 0.21% to USD 13,368.00 per tonne, and Brent crude oil advanced 0.80% to USD 72.56 per barrel amid renewed U.S.-Iran tensions.

Our Stance: The ASX 200 started the week on a better footing, supported by a broad-based rally in technology stocks and easing geopolitical concerns following the Iran-US agreement to halt recent hostilities. The benchmark index reclaimed its 200-day moving average, while gains across eight of 11 sectors reflected improved market sentiment. Investors also digested comments from outgoing IMF Chief Economist Pierre-Olivier Gourinchas, who advocated for more flexible central bank communication, reinforcing expectations that policymakers may remain responsive to evolving economic conditions. Meanwhile, commodity markets remained mixed, with firmer oil prices offset by weaker precious metals. Our stance: While improving technical indicators and resilient technology stocks are encouraging, investors are likely to remain cautious as geopolitical developments, commodity price movements, and upcoming U.S. economic data continue to shape market direction.

The S&P/ASX 200 advanced 59.20 points in the latest trading session, forming a bullish candlestick pattern that reflects renewed buying interest and improving market sentiment. From a technical perspective, the broader outlook remains constructive, with the index continuing to trade above its 21-day Simple Moving Average (SMA), which is acting as an important dynamic support level and reinforcing the prevailing uptrend. Immediate support is positioned around 8,760.50, and maintaining this level would help preserve the current bullish market structure. A sustained hold above support could attract additional buying interest and support a retest of recent highs, with scope for further gains in the sessions ahead. Conversely, a decisive break below 8,760.50 would weaken the near-term technical outlook, increase selling pressure, and raise the risk of a deeper corrective pullback.