Investors are entering a cautious week, with global attention focused on two major events: the Reserve Bank of Australia’s interest rate decision and the expiration of the U.S. tariff reprieve under President Donald Trump.
The Reserve Bank meets Tuesday, with the cash rate decision due at 2:30pm AEST. Traders still expect a rate cut, but analysts suggest the case is far from clear-cut, especially following strong U.S. economic data that has tempered global expectations for imminent easing.
Global focus turns to Trump’s tariff ultimatum
The 90-day pause on U.S. reciprocal tariffs, first announced in April, is due to expire on Wednesday. Major U.S. trading partners spent the weekend scrambling to finalise deals or secure more time. U.S. Treasury Secretary Scott Bessent said countries without agreements in place may still be granted a three-week extension.
U.S. equity markets were closed Friday for Independence Day, but the previous session saw both the S&P 500 and Nasdaq Composite close at record highs. Despite that, S&P 500 futures slipped 0.6% on Friday, hinting at a more cautious start to the new trading week.
Oil markets hit by OPEC+ supply surprise
Over the weekend, OPEC+ stunned markets by announcing it would speed up oil production increases starting next month. The decision is expected to lock in a global surplus later this year, placing downward pressure on prices.
While the move supports President Trump’s campaign focus on lowering fuel costs, it raises fresh concerns for producers in U.S. shale regions and even within OPEC itself. Saudi Arabia’s decision to raise prices following the announcement signals confidence that buyers will absorb the additional supply.
Currencies and commodities steady
Gold futures are holding near US$3347 an ounce, bitcoin is trading around US$109,400, and iron ore has slipped below US$96 a tonne on the Singapore exchange. The Australian dollar remains firm around US65¢.
ASX futures signal flat local open
ASX 200 futures are flat, pointing to a muted start for Australian equities. The index closed above the 8600-point level for the first time on Friday, marking a strong finish ahead of what could be a volatile week in rates and trade policy.
