ASX set for a higher open as tensions ripple through global markets
Australian investors are waking to a cautiously optimistic mood, with ASX futures pointing to a roughly 0.8% gain in early trade. The bounce comes despite a roller-coaster session on Wall Street, where renewed U.S.-China tensions triggered sharp moves in equities, currencies, and precious metals.
What is moving the dial on the day
In the United States, Donald Trump’s latest social-media post signaling possible backing away from some trade ties with China sparked a volatile session. After dipping early, the S&P 500 managed to claw into positive territory mid-session before finishing a touch lower. The day’s swing underscored how quickly headlines can shift sentiment—and how sensitive markets remain to policy threats between the world’s two largest economies.
Gold emerged as a clear risk-off beneficiary, with the spot price jumping about 0.8% to a fresh high around $4,143 per ounce as investors sought shelter from trade jitters and policy uncertainty. That move amplified a broader risk-off tilt that tends to accompany heightened geopolitical risk and cross-border tariff rhetoric.
Locally, the Australian dollar weakened, slipping about 0.5% to around 64.8 U.S. cents. A softer AUD often supports exporters and local equities over the longer run but can weigh on consumer confidence and inflation dynamics in the near term.
Domestic drivers: policy, banks, and portfolios
The Australian market is also parsing domestic policy shifts. In the realm of superannuation, reforms under consideration would raise tax rates for the wealthiest savers. Specifically, balances above $3 million could attract a 30% tax rate, with a new $10 million threshold exposing balances to a 40% levy. Analysts say these measures signal a policy aim to discourage ultra-wealthy accumulation in retirement funds and could have long-term implications for SMSFs and capital allocation in the sector.
On the banking front, regulators announced a notable development for Westpac. After a multi-year risk transformation program, APRA confirmed the bank has met the obligations of a court-enforceable undertaking to enhance risk management and governance. The result is that Westpac no longer needs to hold the extra capital previously required—an outcome that could influence capital discussions across the sector.
What traders are watching next
Markets are likely to remain sensitive to headlines from Washington and Beijing, with investors balancing expectations around policy clarity against ongoing trade friction. Traders will also scrutinize earnings signals and local data as they gauge whether the early optimism for the ASX can translate into a sustainable rally through the session.
While the immediate mood is constructive, the bigger test for the Australian market will be how domestic policy, especially fiscal and regulatory decisions around superannuation and banking, interacts with an unsettled global backdrop. In the near term, investors seem to be pricing in a cautious tilt—favoring high-quality names that can weather volatility and benefit from a softer currency environment and resilient earnings.
Bottom line
As markets chafe against geopolitical tension and policy shifts, the ASX appears set to open higher driven by cautious optimism and the pull of defensive assets like gold. Traders should remain nimble given the fluidity of global headlines and the potential for swift sentiment reversals based on policy updates from major economies.
