Australia Stock Market Preview for Monday 8 December 2025: ASX Braces for Fed Cut, RBA Hold and Commodities Cross‑winds

SYDNEY — Sunday, 7 December 2025

Australia’s sharemarket heads into Monday’s session walking a tightrope between upbeat global risk sentiment and renewed concerns about “higher for longer” interest rates at home. The S&P/ASX 200 finished Friday at 8,634.6 points, up 0.19% for the day, with materials and banks again doing the heavy lifting. ^[1]

Over the weekend, December S&P/ASX 200 futures have hovered around 8,622, just 10–15 points below Friday’s cash close, pointing to a flat to slightly softer open on Monday. ^[2]

Wall Street ended Friday higher, pushing the S&P 500 to 6,870.40 (+0.2%), the Dow Jones to 47,954.99 (+0.2%) and the Nasdaq to 23,578.13 (+0.3%), all hovering near record levels as traders price in a likely US Federal Reserve rate cut this week. ^[3]

At the same time, gold is trading above US$4,200 an ounce, copper has hit record highs, while iron ore has softened, leaving Australia’s heavyweight miners exposed to both tailwinds and headwinds. ^[4]

All of this comes ahead of Tuesday’s Reserve Bank of Australia (RBA) meeting, where markets and economists overwhelmingly expect the cash rate to be held at 3.60%, with a growing consensus that rates could stay there through most or all of 2026. ^[5]

Key things to watch before the ASX opens Monday

Futures point to a flat open
December ASX 200 futures settled around 8,622 on Friday, down just 0.03%, and have shown little movement since, signalling a muted start to Monday trade. ^[6]
ASX 200 near year highs but lagging global peers
IG’s Tony Sycamore notes the ASX 200 is trading close to 8,600 and is up about 5.4% year‑to‑date, with the accumulation index up roughly 8.7%, but the local index has underperformed many overseas markets. ^[7]
Fed cut countdown drives global risk sentiment
US stocks ended Friday within 1% of record highs as traders priced in an 80–90% chance the Fed will cut rates by 25 bps at its 9–10 December meeting. ^[8]
Commodities split: copper hot, iron ore cool
Shanghai copper futures have surged to record highs near 92,900 yuan a tonne, while Dalian iron ore slid about 1% to 785.5 yuan, leaving the steelmaking benchmark on track for a small weekly loss. ^[9]
RBA expected to hold, but “higher for longer” narrative grows
A Reuters poll of economists shows unanimous expectations for no change to the 3.60% cash rate this week and a shift toward no moves through 2026, even as some analysts warn that the next move could be a hike rather than a cut. ^[10]
Flows from index rebalances and corporate moves
December index changes to the ASX 50, 100 and 200 will start to bite, with Smartkarma highlighting 20 additions and 20 deletions across the benchmark indices and Barton Gold joining the S&P/ASX All Ordinaries Index. ^[11]

Futures signal a cautious, slightly softer open

The S&P/ASX 200 December futures contract closed Friday at 8,622, down a marginal 0.03% on the day, with an intraday range between 8,604.5 and 8,652.5. ^[12]

With the cash index finishing at 8,634.6, the futures market currently implies a modest 10–15 point pull‑back at the open — essentially a flat start once fair‑value adjustments and opening auction noise are taken into account. ^[13]

Over the weekend, global index snapshots have shown ASX 200 futures drifting only a handful of points either side of Friday’s settlement, underscoring a market that is in “wait and see” mode ahead of the RBA and Fed. TechStock²+1

How the ASX 200 finished last week

Friday’s close: miners and banks in charge

On Friday, the ASX 200 rose 16.2 points (+0.19%) to 8,634.6, while the All Ordinaries gained 0.22% to 8,926.1. ^[14]

Materials climbed about 0.8%, helped by broad gains in miners: BHP added 0.76%, Fortescue rose 2.22%, while Rio Tinto eased 1.5% after recently hitting a record high. ^[15]
Financials advanced around 0.4%, with the big four banks contributing positively as investors sought yield in a world where cuts are no longer seen as imminent. ^[16]
Consumer discretionary names lagged; Premier Investments plunged nearly 16% on weaker guidance and consumer‑spending concerns. ^[17]

ABC’s markets blog similarly reported the index closing “slightly higher” on Friday, and highlighted commentary from AMP chief economist Shane Oliver, who described the move as a pause after a strong rebound, with the market caught between valuation worries and optimism about US rate cuts. ^[18]

Year‑to‑date performance and valuation backdrop

According to IG’s Tony Sycamore, the ASX 200 is up about 5.39% year‑to‑date, with the accumulation index up 8.73%, putting the market on track for a third consecutive year of gains. ^[19]

However, Sycamore also points out that:

The ASX 200 has underperformed major global indices, largely because of its limited technology weightingand the drag from resurgent inflation that curtailed the RBA’s easing cycle.
The index is trading on a 12‑month forward P/E around 18.1x, significantly above its long‑term average of 14.8x, leaving less room for disappointment on earnings or macro data. ^[20]

His base case is for the ASX 200 to grind higher toward 9,300–9,500 by the end of 2026, assuming GDP growth stabilises around 2%, inflation gradually cools back into the RBA’s target band, and unemployment drifts toward 4.4% without a sharp recession. ^[21]

Global leads: Wall Street at the edge of record highs

Friday’s US session delivered exactly the kind of steady, low‑volatility session that tends to support risk appetite at the start of the week:

S&P 500: +0.2% to 6,870.40
Dow Jones Industrial Average: +0.2% to 47,954.99
Nasdaq Composite: +0.3% to 23,578.13 ^[22]

AP and other outlets note that the S&P 500 is now within about 1% of its all‑time high, with weekly gains of 0.3% for the S&P, 0.5% for the Dow and 0.9% for the Nasdaq. ^[23]

The key driver is the Fed meeting later this week:

Futures markets (as tracked by the CME FedWatch tool and reported by Reuters) imply an ~85–87% probability of a 25 bps cut at the December 9–10 FOMC meeting. ^[24]
A Reuters “Week Ahead” preview emphasises deep divisions within the Fed, with several policymakers wary of cutting too aggressively, putting extra focus on Chair Jerome Powell’s guidance and the number of dissenting votes. ^[25]

For Australian investors, the take‑away is that global risk appetite remains constructive, but Fed messaging could easily jolt bond yields, the US dollar and equity valuations as the week unfolds. Monday’s local trade is therefore likely to be order‑flow driven and cautious, rather than strongly directional.

Commodities check: copper’s record run vs softer iron ore

Copper: record highs and tight supply

Copper – often called “Dr Copper” for its sensitivity to global growth – is booming even as manufacturing data remains mixed:

Shanghai’s most‑active copper contract closed Friday daytime trade near 92,780 yuan a tonne after hitting an all‑time high around 92,910 yuan.
Three‑month copper on the LME was trading around US$11,668 a tonne, also near record territory, with both markets up roughly 4–5% on the week. ^[26]

Analysts quoted by Reuters say the rally is being driven less by roaring demand and more by tight inventories, supply disruptions and regional market fragmentation, including a premium on US copper contracts that has pulled physical metal away from Europe and Asia. ^[27]

For the ASX, elevated copper prices are a clear positive for names such as BHP and other copper‑exposed miners, helping to offset weaker sentiment in some other commodities.

Iron ore: easing from recent highs

In contrast, iron ore – the lifeblood of the Australian resources sector – has softened:

The most‑traded January iron ore contract on the Dalian Commodity Exchange fell about 1.0% to 785.5 yuan (≈US$111) a tonne on Friday, leaving it slightly down on the week. ^[28]
Singapore January futures were last quoted near US$103.3 a tonne, also down around 1% intraday but still modestly higher over the week, suggesting lingering speculative support. ^[29]

Consultancies such as Mysteel report that year‑end seaborne shipments are picking up, while Chinese steel mills are trimming production, leading to a looser physical market and a small weekly loss for Dalian futures. ^[30]

This mixed commodity backdrop helps explain why materials stocks have been firm but choppy: copper and gold are supportive, but iron ore – still the most important driver for names like BHP, Rio Tinto and Fortescue – looks vulnerable to any further soft patches in Chinese demand. ^[31]

Precious metals and oil

Gold finished Friday about 1% higher near US$4,212 an ounce, helped by the weaker US dollar and Fed cut expectations. Silver briefly hit a record high above US$59. ^[32]
ABC’s markets blog had spot gold around US$4,219 and Brent crude near US$63–64 a barrel earlier in the week, levels that roughly persist into the weekend. ^[33]

Gold’s strength is a clear tailwind for local gold miners, while Brent in the low‑60s keeps energy names sensitive to any further moves in OPEC policy or geopolitical news.

RBA meeting: from “cuts soon” to “on hold for longer”

Cash rate at 3.60% and likely to stay there

The RBA’s cash rate is currently 3.60%, unchanged since the 5 November decision. The central bank will announce its final decision for the year at 2:30pm AEDT on Tuesday 9 December. ^[34]

A Reuters poll of 38 economists, conducted earlier this week, found:

All respondents expect no change to the cash rate at the December meeting.
A majority now expect the 3.60% rate to be maintained through 2026, compared with an earlier consensus that at least one cut would arrive next year. ^[35]

Major banks such as ANZ have scrapped their early‑2026 rate‑cut forecasts, arguing that sticky inflation (October’s annual CPI was around 3.8%) and still‑solid activity leave little justification for easing. ^[36]

Market pricing and risk for equities

ASX data on 30‑day interbank futures shows the market assigning a very high probability to no move in December, and only a small chance of any change before late 2026. ^[37]

Analysts are split on the next move:

Some, including JP Morgan and Oxford Economics, see the risk of eventual hikes if inflation proves more persistent, though not in the near term. ^[38]
Others, such as Westpac’s Luci Ellis (quoted by ABC), warn that the RBA could keep rates too high for too long, with their base case still pencilling in cuts in 2026 if supply capacity improves and inflation cools. ^[39]

For equities, the immediate implication is that rate‑sensitive sectors (housing, discretionary retail, REITs) may continue to face a “higher for longer” discount, while banks and high‑yield names remain attractive to income‑seeking investors so long as credit quality holds up.

Macro diary: Monday’s key data and events

While Monday’s Australian calendar is relatively light, regional and global data could still sway sentiment:

China – November trade balance (Mon)
China’s October trade surplus was about US$90bn, with exports down slightly year‑on‑year. Updated November trade data are due on Monday 8 December, with economists expecting a still‑large surplus and close scrutiny of import numbers for signs of commodity demand. ^[40]
Japan – Q3 GDP (final, Mon)
Japan’s Cabinet Office will release final Q3 GDP at 8:50am JST on Monday, with forecasters looking for a revision to around ‑0.5% q/q after earlier data showed a 1.8% annualised contraction. ^[41]
UK, Europe and US
S&P Global’s week‑ahead preview highlights German industrial production, UK labour data and US inflation‑expectations surveys on Monday, all of which could influence global yields and risk appetite. ^[42]

This mix suggests external macro risk is higher than domestic on Monday, with local traders primarily reacting to offshore headlines and positioning for the RBA and Fed later in the week.

Flows, index changes and ASX‑specific stories

Index rebalancing and stock‑specific flows

Smartkarma’s latest “Daily Brief Australia” notes that:

The December 2025 index rebalance for the ASX 50, 100 and 200 was confirmed after Friday’s close.
There are 20 additions and 20 deletions across the three indices, with analysts estimating hundreds of millions of dollars in one‑way passive flows as ETFs and index funds adjust. ^[43]

Separately, Barton Gold has announced that its ASX‑listed shares will join the S&P Dow Jones ASX All Ordinaries Index, putting it among Australia’s 500 largest listed companies and potentially boosting institutional interest. ^[44]

Index changes often drive short‑term volume spikes and volatility in affected names around the effective date. Traders will be watching for:

Inclusion flows into new index entrants.
Selling pressure in constituents being removed.
Knock‑on effects to sector weights, especially in resources, tech and mid‑cap industrials.

ASX infrastructure and outage fallout

The ASX Ltd itself remains under scrutiny after a series of technology mishaps:

On 1 December, an outage on the exchange’s announcements platform forced trading halts in around 80 companies when price‑sensitive disclosures could not be published. ^[45]
Reuters reports that the incident has deepened investor doubts about the exchange’s long‑running technology overhaul and governance, following earlier fines and investigations by ASIC. ^[46]
Bloomberg notes that ASX has since confirmed the blackout is fully resolved, with all 1 December announcements processed and trading back to normal, though the company’s shares slipped on the news. ^[47]

While Monday’s session should be operationally smooth, confidence in market plumbing remains a background issue for some institutional investors and could influence sentiment toward ASX Ltd’s own stock.

Sectors and stocks to watch on Monday

1. Resources: iron ore vs copper and gold

Big miners (BHP, Rio Tinto, Fortescue)
Recent days have seen strong gains across the mining giants, with Fortescue up more than 2% on Friday and Rio Tinto easing slightly after hitting record levels. ^[48]
- The iron ore pull‑back may take some steam out of the rally.
- However, record copper prices and firm gold support diversified names and copper‑gold producers.
Gold miners
With spot gold comfortably above US$4,200, local producers such as Northern Star and Newmont’s ASX‑listed arm remain in focus, particularly given their leverage to both gold and Aussie‑dollar moves. ^[49]

2. Banks and financials

The big four banks continue to benefit from:

Stable or rising net interest margins in a world where the cash rate is expected to stay at 3.60% for an extended period. ^[50]
A still‑resilient labour market and arrears that remain low by historical standards.

With Financials up 0.43% on Friday, investors are likely to keep leaning on the sector as a source of dividend yield and defensive exposure – though higher‑for‑longer rates also keep a lid on mortgage and SME demand. ^[51]

3. Tech, AI and data‑centre plays

One of the most closely watched stories on Friday was NextDC, which jumped intraday after announcing a “sovereign AI infrastructure” partnership with OpenAI, before closing the session around 3% higher. ^[52]

The combination of:

Government’s new National AI Plan, and
High‑profile deals like OpenAI–NextDC,

is drawing attention to data‑centre, cloud and AI‑adjacent stocks, even as some strategists warn about stretched valuations in global tech and AI names. ^[53]

Expect ongoing momentum trading in this pocket, with local moves often echoing the overnight performance of big US AI stocks.

4. Rate‑sensitive sectors: property, consumer and REITs

Consumer discretionary names like Premier Investments have already shown how fragile sentiment can be when guidance disappoints in a higher‑rate environment. ^[54]
REITs and high‑beta property stocks remain sensitive to any shift in RBA expectations or longer‑term bond yields; a decisive Fed cut followed by dovish messaging would be supportive, while a hawkish surprise could hit valuations.

Given Monday’s light local data calendar, moves here are likely to be more about positioning for the RBA statementthan about fresh news flow.

Currency backdrop: a stronger Aussie dollar

The Australian dollar has quietly firmed over the past week:

Historical data show AUD/USD trading around 0.66–0.664 on Friday, up from about 0.654 at the start of the week. ^[55]
OFX’s daily updates put expected short‑term ranges around 0.65–0.67, reflecting a softer US dollar and growing bets on Fed cuts. ^[56]

A stronger Aussie:

Erodes some of the tailwind for exporters and companies with large USD revenue.
Helps importers and retailers, marginally easing the cost of imported goods.

For the ASX overall, the current FX level is not extreme, but further gains in AUD/USD – particularly if the Fed sounds very dovish – could cap the upside for some big international earners.

What this means for Monday’s open

Putting it all together:

Futures suggest a flat to slightly negative start, with the ASX 200 likely to open just below Friday’s 8,634.6 close. ^[57]
Global cues are broadly supportive, but investors are reluctant to make big directional bets ahead of the RBA on Tuesday and the Fed mid‑week.
Commodities are a mixed bag – copper and gold are supportive, iron ore is softer – which should translate into stock‑specific moves within the resources complex rather than a simple “up or down” call for the whole sector. ^[58]
Index rebalancing flows and AI‑related stories like NextDC’s OpenAI partnership may provide pockets of volatility, even if the broader index is subdued. ^[59]

For traders, Monday on the ASX is shaping up as a positioning and stock‑picking day: a session to fine‑tune exposure to miners, banks and rate‑sensitive sectors before the real fireworks arrive with the RBA and Fed later in the week.

This article is for informational purposes only and is not financial advice. Consider your own objectives and consult a licensed adviser before making investment decisions.