US markets rallied higher on easing stagflation risk and Australian market drifted as earnings season came to an end and investors awaited further economic data.
Investors in the US breathed a sigh of relief after inflation data came in cooler than expected. Producer prices slipped by -0.1% month-on-month, while consumer prices rose 0.4% - within range of market expectations.1 The data eased fears that the Federal Reserve would face pressure on both sides of its dual mandate. With inflation seemingly under control, the path towards rate cuts now looks clearer as the Fed balances its goals of maximum employment and price stability.
Australian equities, by contrast, traded without clear direction as earnings season wrapped up and a quiet economic calendar offered little guidance. The S&P/ASX 200 slipped early in the week on weakness in energy and materials, but clawed back to finish just above water, buoyed by momentum from US markets.
Asia-focused ETFs (ASIA, DRGN, IAA, IKO) were a theme in the top performers of the week driven by a confluence of tailwinds. Korean equities were buoyed after the government abandoned plans to lower the capital gains tax threshold for stock investors.2 Meanwhile in China, investors piled into domestic tech giants following Alibaba’s unveiling of a hyper-efficient AI model “Qwen3 Next” and announced plans to train its models on in-house designed AI chips.3
In the world of commodities:
- Lithium miners (ACDC) took a hit after Chinese battery giant CATL announced it would resume production at its JianXiaWao lithium facility earlier than expected.4
- Hydrogen producers (HGEN) rallied after California passed a measure that exempts hydrogen fuel from state sales and use taxes.5 California is the single most important market for new energy vehicles (NEV) in the US accounting for roughly one third of all NEV sales in the country.
- Copper miners (WIRE) may experience a renewed M&A boom after diversified mining giant Anglo American agreed to buy copper major Teck Resources in a merger of equals. 6
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