The XJO is expected to open higher this morning after the U.S confirmed their rebound overnight, finishing marginally in the green. Their futures are flat.
Our expected open is just above 7,950, practically reversing all of Monday’s losses. We are faring better than expected considering the looming deadline tonight and how the U.S has been tracking the last couple of days. One would typically expect jitters and cynicism considering the existential risk of tariffs. Perhaps it is because red U.S futures over the past couple of days have heralded big losses but have resulted in the U.S reversing intraday to finish in the green. Coupled with the U.S showing optimism as they head into “Liberation Day”, clearly rebounding from their recent lows and extending the gains overnight, perhaps that optimism is infectious.
Our market is likely getting a bit ahead of itself. Like yesterday, we should expect most of the gains to happen on open. It would be hard to expect our market to hold onto those gains into the close, but we are showing a surprising resilience.
Overall, we should continue to expect the market to track sideward in a broad range. We are yet to retest the resistance at roughly 8,000, or key support at roughly 7,750, but at this stage we should expect these levels to hold. Any hope can be dashed, and any fear can be resolved in this market. Things remain uncertain.
Yesterday the RBA kept rates on hold as expected. They didn’t give much away in their statement, sticking to the usual talking points. They did mention worries around tariffs. Regardless, our market has likely reacted positively. Our market is still expecting a cut in May, and with the RBA not really giving much away yesterday, we are happy to hold that expectation for now.