The Open: ASX to Start the Week Lower as Bond Yields Surge 🎢

Why It Matters

Higher bond yields and oil price spikes signal renewed market risk, making upcoming earnings and central‑bank actions critical for investors’ positioning.

Key Takeaways

• NZX 50 opens down 0.4% amid global risk‑off sentiment
• Bond yields surge, pressuring equities and fueling market uncertainty
• US earnings season strong, but tech growth may stall ahead
• Oil price jump highlights war risk and inflationary pressure
• Upcoming Nvidia, Walmart, Home Depot reports could set market direction

Summary

The video opens with Andrew and Greg Smith noting the ASX’s soft start, with the NZX 50 slipping 0.4% as bond yields climb sharply, reflecting a broader risk‑off mood across global markets. The discussion pivots to the bond market’s anxiety over sticky inflation, the lingering war in Ukraine, and fiscal pressures, which contrast with equities that have been buoyed by resilient data and a strong earnings season. Key data points include a mixed corporate calendar – 12 New Zealand companies reporting this week, including property and insurance names – and a focus on US earnings, where retailers such as Walmart, Target and Home Depot are due, while tech giants like Nvidia remain under scrutiny. Despite a robust earnings beat rate, tech growth may temper, and oil prices have jumped about 3% after Friday’s rally, underscoring geopolitical risk. Greg highlights that the bond market’s concerns stem from higher oil, fertilizer costs and the prospect of a prolonged conflict, which keep central banks on edge. He notes that while Nvidia’s results are still watched, the spotlight is spreading to other chip makers and consumer‑discretionary firms, and that oil’s backwardated futures signal lingering supply‑side worries. For investors, the convergence of rising yields, volatile oil, and a packed earnings week suggests heightened short‑term volatility. Market direction will likely hinge on whether US retailers and Nvidia can meet lofty expectations and how central banks respond to persistent inflation and geopolitical uncertainty.

Original Description

The local market is set to open marginally lower to begin the week with ASX futures down 0.1%.

It was risk off on Friday with global equity markets falling, while bond yields soared as renewed inflation fears and the prospect of higher interest rates tempered sentiment.

US President Trump has said his patience with Iran is running out and that Chinese President Xi Jinping had agreed that Iran must reopen the Strait of Hormuz, although China gave no indication it would intervene.

Oil prices surged on Friday, after comments by President Trump and Iran's foreign minister further dashed hopes of an imminent deal to open the Strait of Hormuz.

On the corporate calendar today, earnings reports are expected from ALS, Elders and Gentrack; while New Hope has a quarterly update.

Today, China reveals a raft of data including retail sales; Industrial production and employment.