The ASX 200 is set for a small gain at the open, with futures up 0.23%. That follows a mixed session globally, where markets rallied on cooler-than-expected US inflation data but remained wary of trade tensions and political drama.

US markets found their footing after softer CPI data (+2.8% YoY, just below 2.9% expected) suggested inflation is easing. But we haven’t seen the impact of those tariffs yet. So, the Fed’s next move is still in question. The S&P 500 futures rose 0.5%, and the Nasdaq 100 futures jumped 1.13%, led by a huge rip in tech stocks. Nvidia surged 6.4%, while Tesla roared back 7.6% after a Morgan Stanley upgrade and a bizarre photo op with Trump in a Tesla.

Europe took the cue, with the Euro Stoxx 600 futures up 0.97% and Germany’s DAX futures up 1.5% as investors digested news of a possible 30-day ceasefire in Ukraine. Meanwhile, the EU is readying new tariffs on US goods in response to Trump’s moves.

Tech dominated, but consumer staples got crushed as investors dumped defensives. Procter & Gamble (-2.82%) and Colgate (-3.66%) led the slide, while retail took a hit—Target (-4.85%) and Walmart (-2.56%) slumped as traders rotated out of safety.

Bond yields nudged higher, with the 10-year Treasury up 3bps to 4.31%. The US dollar firmed, rising 0.07% as traders repositioned post-CPI. The VIX futures dipped to 21.71 , but traders aren’t buying the calm just yet. Markets are watching the US-EU trade fight, the Fed’s next move, and any signs of inflation pressure creeping back in.

The US budget deficit blew out to $307B in February, with spending outpacing revenue. Adding fuel to the fire, Senate Democrats are refusing to vote on a funding extension, raising shutdown risks. We’ve seen this all before, and while usually shutdown risks don’t create much impact anymore, things are fragile out there, so stay vigilant.

Meanwhile, Canada’s central bank cut rates by 25bps to 2.75%, flagging economic risks from Trump’s tariffs.

ASX is set for a steady open, but keep an eye on materials and tech—gold and copper are moving, and US sentiment is shifting risk-on. Watch for any trade war headlines—they’re moving markets.

Major Themes to Watch:

Tariffs and trade war: Markets are taking this very seriously, with a recession or hot war becoming a more serious prospect.
The Ukraine war: The resolution to the conflict in Ukraine is of concern as it appears now just as likely to escalate into a broader conflict, leading to risk-off flows.
Tech Sector Volatility: Significant sell-offs in major tech stocks, particularly Tesla, indicate that the market is taking risk off the table.

Data to Watch this Week:

Wednesday 12th:

US CPI

Thursday 13th:

US PPI

Reading List:

The Conversation: Will the US Collapse

Global Markets

Global Equity Futures (Source: TradingView)

ASX Utilities Sector is Defensive

The utilities sector again justifies its status as a defensive play, as it stays relatively rangebound while the rest of the market suffers.

ASX Utilities sector index (Source: TradingView)

ASX Stock to Watch: APA Group (ASX:APA)

APA continues it’s interesting consolidation after a big move up. Is the downtrend broken or is it back to lows? The next few bars could be very telling.

ASX Stocks to Watch (Source: TradingView)

ASX Stock to Watch: Aurelia Metals (ASX:AMI)

AMI has posted some impressive underlying growth numbers and the stock is catching some well-deserved interest. Add it to your watch list.