Australian shares to open higher following US-Iran deal
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The news: The Australian sharemarket is set to open higher after Donald Trump said a deal between the US and Iran was “complete”.
US stocks ended sharply higher on Friday, as optimism over the much-awaited US-Iran peace deal and the blockbuster debut of SpaceX lifted investor sentiment.
The numbers: Updated at 7:50am AEST:
- ASX futures: up 39 points to 8,853 points
- Wall Street: Dow Jones up 0.70% on Friday, S&P 500 up 0.50%, Nasdaq up 0.31%
- Europe: FTSE 100 up 1.63% on Friday, CAC 40 up 1.83%, DAX up 1.76%
- Spot gold: up 0.22% to USD4,222 per ounce
- Oil prices: Brent down 2.28% to USD82.94/barrel, US WTI down 3.37% to USD87.33/bbl
- AUD: up 0.43% at 70.78 US cents
- Bitcoin: up 1.54% to USD65,430
The context: All three major US indices closed higher on Friday, with investors focused on the Nasdaq debut of SpaceX. The stock ended its first trading session up 19.2% at USD160 ($226) a share, well above its IPO price of USD135, giving the company a market capitalisation of about USD2.1 trillion.
However other space-related stocks which had rallied ahead of the listing, retreated on Friday. Rocket Lab fell 10.8%, while Intuitive Machines and Planet Labs declined 13.1% and 8.8% respectively.
Elsewhere, Brent crude settled below USD85 a barrel after US officials said an interim peace deal that would reopen the Strait of Hormuz and address Iran’s nuclear ambitions appeared increasingly likely and could be signed within days.
While Trump criticised an Israeli strike on Lebanon, on Sunday morning (AEST) he later said a deal was “complete” with Iran. “I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade,” he said. “Ships of the World, start your engines. Let the oil flow!”
Investors are also looking ahead to next week’s Federal Reserve policy meeting, the first under the leadership of Kevin Warsh. Markets will be watching for signals on the interest rate outlook, with fed funds futures implying a 55% probability of a rate hike by December, according to CME Group’s FedWatch tool.
Locally, CBA is due to release its household spending insights for May.
