ASX Market Outlook: Pre-Open Brief
ASX Stock Market Outlook
ASX 200 futures are down 0.33%, signalling a weak open as traders digest the fallout from a brutal overnight session offshore. The index closed yesterday perched at 7,783, but without strong support and with global momentum turning sharply south, local equities face a tough day.
Technically, we’ve stalled right at the 7,800 breakdown zone from early April — and failed to reclaim it with any conviction. Volumes are light, breadth is thinning, and today’s open could confirm a fresh downside move. The market is still digesting last week’s bounce — now it’s looking more like a trap than a trend.
Overnight Wrap
US markets tanked — and this time, it was Powell.
S&P 500 futures fell 2.26%
NASDAQ 100 futures dropped 3.03%
Dow futures shed 1.78%
Markets had been jittery for days on trade tensions, but Fed Chair Jerome Powell’s overnight speech in Chicago brought back the fear. He warned that the Trump tariffs — particularly their inflationary impact — may require interest rates to stay elevated longer than markets had priced in. That shot down any remaining hopes of a mid-year cut.
Instead of viewing the tariffs as one-off price shocks, Powell likened them to pandemic-era disruptions — persistent, sticky, and capable of bleeding into core inflation. He offered no rate relief and signalled that the Fed is ready to tolerate weaker growth if that’s what it takes to keep inflation expectations anchored.
VIX jumped up to 27.63, a major warning sign that further falls could be coming
Treasury yields tumbled, led by the short-end:
US 2Y down 7.5bps
US 10Y down 5.8bps
Europe was flat.
DAX up just 0.33%
FTSE 100 up 0.24%
EURO STOXX 50 slipped 0.06%
STOXX 600 down 0.24%
Early gains evaporated as US futures rolled over. Cyclicals, exporters, and banks, which had rallied on tariff exemptions earlier in the week, were hit again.
Eurozone traders are now grappling with stagflation risk: softer growth, high input prices, and hawkish central banks. The ECB meets tonight. Expect tension.
Asia fared no better.
Nikkei 225 futures down 0.35%
Hang Seng down 1.04%
FTSE China A50 down 0.30%
Asian investors are also bracing for potential retaliation from Beijing. The Chinese tech sector was particularly hard hit, while Japanese equities continue to wrestle with a resurgent yen — up 0.74% overnight.
China's GDP beat earlier in the week gave no support. That number’s now being treated as stale. Risk appetite across Asia is gone.
The Play Today
This is a Powell-driven fear trade. Markets had accepted tariffs as part of the chaos. But the Fed reinforcing the inflationary pressure and slamming the door on rate cuts is another blow.
Gold spiked 3.27% to US$3,346, a clear panic hedge. WTI oil rallied 1.86%, as energy joins the inflation basket. Rate-sensitive sectors — tech, REITs, small caps — are being sold indiscriminately. And Aussie banks could come under pressure if global credit conditions tighten from here.
Locally, look for support in defensive corners such as gold miners, healthcare, and supermarkets. If the ASX 200 can defend 7,720 at the open it will be a positive sign that our market has some strength to it.
Economic Data to Watch This Week
Tuesday: Canada CPI
Wednesday: UK CPI, US Retail Sales, Canada Rate Decision
Thursday: Fed Chair Powell Speaks, Australian Unemployment, EU Rate Decision
Friday: Public Holiday
Global Market Prices
Global Markets (Source: TradingView)
ASX S&P 200 Future
ASXc200 Index (Source: TradingView)
