ASX Market Outlook: Pre-Open Brief 31.03.2025
ASX Stock Market Outlook
The ASX 200 is set for a sharp drop at the open, with SPI futures down 1.13%, following a brutal session on Wall Street and widespread weakness across global equity markets. The weekend relief rally fizzled fast as inflation fears roared back, prompting a heavy selloff in growth and tech. Traders should brace for a risk-off open, with weakness likely across tech, financials, and Asia-exposed sectors.
This follows a relatively strong week for the local market, with the ASX 200 up 0.6% last week, marking two consecutive weekly gains for the first time in 2025. But Friday’s optimism has been crushed by another red-hot inflation print in the US and rising bond yields, killing hopes of imminent rate cuts.
Friday night’s release of the US PCE index — the Fed’s preferred inflation gauge — showed prices rising 0.4% in February, reigniting concerns that the Fed will stay hawkish for longer. Bond markets responded violently, with the US 10-year yield spiking 10bps to 4.25% and the 2-year yield jumping to 3.91%.
Equities were down sharply across the board, and the VIX (Volatility Index) surged back above 20, a clear sign that caution is required.
The Play Today
The same recent themes continue to apply. Gold and defensive stocks could be strong today. Tech and riskier assets are setting up for a very bad start to the week. Keep an eye out for any news regarding China’s ambitions toward Taiwan during the session, as tensions there can potentially deal further blows to equities.
Major Themes Driving the Financial Markets:
Inflation in Japan: The return of inflation to Japan has major implications. Japanese Government Bonds are tanking as the market factors in higher rates over time. This has the potential to lead to a highly disruptive unravelling of the Yen Carry Trade.
Trade Tensions and Tariffs: The Trump administration's tariff policies continue to inject volatility into global markets. The potential for higher inflation and slower growth—stagflation—remains a concern. Nasdaq futures are up again overnight. AI, semis, and mega-cap tech are leading the charge globally. Can Aussie tech keep up?
Tech Sector Dynamics: Significant movements in major tech stocks, particularly companies like Tesla and Alphabet, highlight the sector's sensitivity to broader economic indicators and policy decisions. Investors should monitor these developments closely.
Economic Data to Watch this Week:
Economic Data to Watch This Week:
Monday: Chinese Manufacturing PMI, German Prelim CPI
Tuesday: RBA rate decision
Friday: US Non-farm Unemployment, Fed Chair Powell to talk
Global Market Prices
Global Markets(Source: TradingView)
ASX Sector Information Technology
Information Technology sector continued its decline last week, and the flows from the US session look even worse. Strap in for a volatile week in tech.
ASX Information Technology sector index (Source: TradingView)
ASX Stock to Watch: Patronus Resources (ASX:PTN)
Patronus Resources is catching some fresh interest.
ASX Stocks to Watch (Source: TradingView)
The Daily Brief is prepared in partnership with Vitti Capital.
