Weekly Recap & Outlook: XJO Mixed and Australia’s June Monthly CPI Print

1. Weekly Recap

$S&P/ASX 200(XJO.AU)$ traded mixed over the week, as a sharp rally in $SOUTH32 LTD(S32.AU)$ and energy names offset declines in healthcare, retail, and the exchange operator.

Industry leaders: Electronic Components (+29.59%), Communications Equipment (+9.03%), Coal & Consumable Fuels (+8.30%), Soft Drinks (+6.67%), and Leisure Facilities (+6.46%).

10 Popular Stocks:

• $SOUTH32 LTD(S32.AU)$ +15.13% — The diversified miner surged on manganese and aluminum price strength, with Australian and African operations benefiting from supply-constraint narratives.

• $WOODSIDE ENERGY GROUP LTD(WDS.AU)$ +6.27% — Advanced on firm Brent crude and LNG spot pricing resilience.

• $SANTOS LIMITED(STO.AU)$ +3.78% — Gained on production momentum and PNG project progress.

• $BHP GROUP LTD(BHP.AU)$ +2.28% — Rose modestly on copper and iron ore price stabilization.

• $PLS Group Ltd(PLS.AU)$ -4.39% — Tracked the lithium complex lower on oversupply concerns.

• $AMCOR PLC-CDI(AMC.AU)$ -4.11% — Pulled back on consumer staples rotation and margin pressure.

• $BRAMBLES LTD(BXB.AU)$ -3.76% — Declined on freight demand and pallet-pool utilization concerns.

• $WESFARMERS LTD(WES.AU)$ -5.98% — Slumped on profit-taking after recent strength, with Bunnings and Kmart facing margin scrutiny.

• $ASX LTD(ASX.AU)$ -5.51% — The exchange operator fell on trading-volume concerns and regulatory overhang.

• $CSL LIMITED(CSL.AU)$ -7.38% — The biotech heavyweight was the week's worst large-cap performer, tumbling on profit-taking and plasma-collection margin concerns.

Performance is subjected to market volatility

2. The following Week’s Key Focus

A. Global Macro Catalysts

1. July FOMC Meeting (29 Jul, 2PM EDT)

   Rates to hold steady at 3.50%-3.75%. Powell’s hawkish/dovish stance drives USD & AUD volatility:

• Hawkish rhetoric: USD rallies, AUD weakens → Miners outperform; REITs & tech sell off

• Dovish signals: USD slides, AUD strengthens → Rate-sensitive real estate & data centre stocks rally

2. US Q2 Advance GDP (30 Jul)

   Consensus 1.8%-2.2%. Hot growth fuels global tightening fears; weak print benefits Aussie dividend defensives.

3. Commodity Volatility

   Brent crude above $100 underpins Woodside & Santos; Iron ore price & AUD exchange rate jointly determine performance of BHP, RIO, FMG. Gold miners track spot gold prices.

4. Big Tech US Earnings

   AI capex guidance directly moves local tech names: $NEXTDC LTD(NXT.AU)$ , $WISETECH GLOBAL LTD(WTC.AU)$ , $XERO LTD(XRO.AU)$ .

B. Critical Australian Domestic Data (Pre-RBA August Policy)

1. June Monthly CPI (Wednesday, the week’s top catalyst)

   Consensus: Headline 2.4% YoY, trimmed mean core 2.6% YoY

• Hot CPI >2.7%: Sharply lifts odds of a 25bp RBA rate hike on 11 August; REITs & consumer stocks drop, banks/resources hold up

• In-line print: Range-bound market trading

• Cool CPI <2.3%: Early rate cut pricing lifts growth & real estate sectors

2. Melbourne Institute Inflation Expectations (Thursday)

   Lower household inflation expectations ease RBA hawkish bias, supportive of long-duration equities.

3. June Retail Sales (Friday)

   Reflects domestic demand strength; robust consumption signals sticky inflation, weighing on rate-sensitive assets.

C. Core ASX Sectors to Watch

1. Big 4 Banks (~25% index weight): Trade RBA terminal rate outlook; resilient NIM if inflation stays hot.

2. Mining & Resources (~20%): Beneficiary of weaker AUD and stable iron ore prices, primary defensive play amid hawkish global central banks.

3. Tech (Data Centre/Software): Valuations vulnerable to rising discount rates from hawkish central bank signals.

4. Energy Majors: Supported by elevated crude oil prices, strong inflation hedge.

D. Key Downside Risks

1. Hot Australian CPI paired with hawkish Powell commentary triggers dual tightening sell-off.

2. Iron ore slumps + AUD rallies weigh heavily on mining heavyweights.

3. De-escalation in the Middle East sends crude oil lower, dragging energy stocks down.

4. Sharply weak US GDP shifts market rotation out of banks/miners into growth assets.

E. Weekly Trading Takeaway

• All market moves pivot on Australia’s June CPI print, with FOMC as secondary driver.

• Sector rotation binary: high inflation = long resources/energy/banks; cooling inflation = long REITs/tech/discretionary.

• Key technical levels: resistance 8900, support 8680.