ASX to rally out of long weekend as gold surges, Wall Street gains

Futures are pointing to a strong start to the week for the resources-heavy S&P/ASX 200 index when Australia returns from its long weekend, with mining stocks such as Barrick Mining, Newmont and Freeport-McMoRan spurred on by gold prices breaking through the US$5,000 an ounce mark.

Stocks on Wall Street were broadly stronger as investors turned their mind to the upcoming quarterly results from four for of the Magnificent 7 megacap tech stocks, with Apple and Microsoft among the leaders on the Dow Jones Industrial Average.

Nvidia was on the red side of the ledger after the chipmaker topped up its investment in data centre operator CoreWeave to build new artificial intelligence factories.

And the kiwi dollar pushed up towards 60 US cents against a broadly weaker greenback as talk of policy coordination between the Bank of Japan and the Federal Reserve Bank of New York stoked intervention speculation, while US President Donald Trump’s tariff threat against Canada and the prospect of another federal government shutdown weigh.

Back to work

Australian futures are pointing to a 0.9% gain for the ASX200 when trading opens across the Tasman after a long weekend, with the resources-heavy bourse set to follow a global rally in mining stocks as gold futures jumped another 2.4% to US$5,098 an ounce.

The precious metal has been surging amid the heightened political uncertainty after US President Donald Trump levelled a 100% tariff threat against Canada if it signs a free trade deal with China, and as the odds of another federal government shutdown get shorter.

Mining stocks Barrick Mining, Freeport McMoRan and Newmont were among gainers on Wall Street, which was broadly stronger ahead of earnings from Microsoft, Meta Platforms, Tesla and Apple this week.

Corporate earnings season picks up pace this week, with about three quarters of firms on the S&P500 reporting early beating expectations, albeit on smaller positive surprises than in recent years, according to FactSet analysis.

The Dow was up 0.5% in late trading, led by Cisco Systems, Microsoft and Apple, while the tech-heavy Nasdaq Composite advanced 0.6%.

Nvidia nudged lower after investing another US$2 billion in data centre operator CoreWeave to hep fund new AI factories using the chipmaker’s technology. CoreWeave gained 8.2%.

Stock markets across the Atlantic were more muted, with the UK’s FTSE 100 and Germany’s DAX 30 nudging up 0.1% and France’s CAC 40 slipping 0.2%.

Chop and change

Currency markets remained choppy with the greenback broadly weaker amid reports the Bank of Japan coordinated with the New York Fed in price checks on the yen last week. Japan’s currency surged on talk of intervention after prime minister Sanae Takaichi said authorities would respond to abnormal movements in markets.

“Policy coordination between Japan and the New York Fed has got the market speculating whether this not only reflects a desire to put a halt to speculative pressure on the yen but also to support a weaker US dollar,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “The Trump administration has been long supportive of a weaker US dollar. If this narrative gets legs, then the US dollar has a lot more downside risk.”

The kiwi dollar rose to 59.91 US cents at 7am in Auckland from 59.59 cents yesterday, and increased to 92.23 yen from 91.69 yen.

No major pieces of local economic data are due today, while across the Tasman a business confidence survey is due. Australian inflation figures on Wednesday are the main piece of data across the Tasman this week, with the pace of consumer price rises seen as key on whether the Reserve Bank of Australia will hike its target cash rate next week.

Reporting by Paul McBeth. Image from Marcus Reubenstein on Unsplash.