The Day Ahead
Watch for continued volatility in the Australian dollar as markets weigh the possibility of an August rate hike by the RBA. While the US Federal Reserve remains hawkish, the AUD is holding above 70¢, suggesting traders are pricing in a "higher for longer" scenario in Australia to combat sticky inflation.
Keep a close eye on the tech and materials sectors on the ASX. There is a growing divergence between active fund managers—who are underweighting the big miners and banks—and passive flows. Any significant shift in sentiment regarding AI revenue generation or a rotation back into "quality" tech stocks like Xero could trigger sharp movements.
In the resources space, the focus shifts to the critical minerals pipeline. With Iluka securing a major automotive offtake and Renascor commencing graphite production, the market is looking for evidence that Western supply chains can realistically scale to challenge China's dominance in rare earths and battery minerals.
Yesterday's Key Stories
Critical Minerals & Uranium
- Iluka Resources signed a binding multi-year offtake agreement with a global automaker for magnet rare earth oxides and secured a $1.65 billion loan from Export Finance Australia for its Eneabba refinery.
- Alligator Energy boosted its Samphire project uranium inventory by 67% to 30 million pounds of $\text{U}_3\text{O}_8$, supporting an ongoing bankable feasibility study.
- Renascor Resources has commenced battery-grade graphite processing at its Adelaide demonstration plant using a proprietary HF-free purification process.
- Astron is advancing its Donald project in Victoria, targeting a final investment decision by Q3 2026 for rare earths feedstock supply to the US.
Mining & Energy Policy
- The Minerals Council of Australia has joined the 'Hands Off Our Fuel' campaign to defend fuel tax credits, warning that removing off-road refunds would spike operating costs.
- South Australia is introducing the Data Centre and AI Infrastructure Act to attract investment, potentially leveraging a $5 billion water pipeline originally intended for BHP.
- ACEREZ admitted to internal failures that led to the destruction of an Aboriginal rock shelter during construction in the Central West Orana Renewable Energy Zone.
- The NSW Coalition has proposed scaling back the New England Renewable Energy Zone by abolishing its transmission line to reduce landholder conflict.
Macro & Policy
- Federal Budget: The Albanese government reached a deal with the Greens to ban self-managed super funds (SMSFs) from borrowing to buy residential property.
- State Budgets: NSW and Queensland both projected deficits, with NSW facing an $8 billion deficit and Queensland relying heavily on volatile coal royalties to return to surplus by 2030.
- KPMG Scandal: Chairman Martin Sheppard and several senior partners are resigning after an investigation found the firm accessed confidential audit bids from EY and PwC.
- UK Politics: Keir Starmer has resigned as Prime Minister, with Andy Burnham emerging as the likely successor for the Labour Party leadership.