We review June’s market moves and key drivers. With the XJO representing the top 200 ASX-listed stocks and forming the basis for many passive ETFs, we explore movements within this index. Additionally, as the XJO is the most actively traded options series, we examine market positioning heading into July.
Key Drivers
In June 2025, the S&P/ASX 200 rose 1.4%, gaining nearly 10% for the quarter, driven by several key factors:
- Market Resilience: The ASX climbed despite global uncertainty, supported by easing inflation pressures and growing speculation around RBA rate cuts.
- Economic Signals: Weaker-than-expected retail sales (0.2% vs 0.5%) and sluggish consumer data added to the case for rate cuts, potentially as soon as July.
- Commodities: Oil prices swung on geopolitical risk, while strength in iron ore and copper prices lifted BHP and Rio Tinto. Despite a high price-to-earnings ratio of 19 and weak economic indicators like negative GDP per capita, the ASX’s safe-haven status and sector-specific strength drove its performance.
Overall Market Moves
In June 2025, global markets were driven by a mix of macroeconomic, geopolitical, and sector-specific factors:
- Easing Geopolitical Tensions: A temporary de-escalation in U.S.-China trade tensions, marked by a 90-day tariff pause, and a Middle East ceasefire boosted investor confidence, driving equity rallies. The MSCI World Index hit a record 888.24, with the S&P 500 (+5.0%) and Nasdaq Composite (+6.6%) reaching all-time highs.
- Trade Policy Uncertainty: Despite optimism, the looming July 9 U.S. trade deal deadline and doubled steel/aluminum tariffs (25% to 50%) on June 4 sustained market volatility, with the U.S. effective tariff rate at 14-15%.
- Sector Strength: AI and technology stocks, particularly semiconductors, led gains, with the U.S. Technology sector up 9.9%. Energy (+4.9%) rose with oil price spikes due to Middle East tensions, while consumer staples dipped (-1.6%).
- Central Bank Actions: The U.S. Federal Reserve held rates at 4.25-4.5%, with two cuts expected in 2025 (September and December). The ECB and Poland cut rates by 25 bps, while the Bank of England held at 4.25%, supporting risk assets.
- Economic Indicators: Global growth slowed (forecast at 2.4% for 2025 vs. 2.9% in 2024), with U.S. job growth (147,000) and unemployment (4.1%) resilient. Weak Chinese PMI (50.6) and Eurozone growth (0.6% Q1) signaled uneven recovery.Currency and Commodities: A weaker U.S. dollar boosted international equity returns and commodity prices, with gold up 29% YTD and Bitcoin hitting $108,396.60 (+4.2% in June).
- Currency and Commodities: A weaker U.S. dollar boosted international equity returns and commodity prices, with gold up 29% YTD and Bitcoin hitting $108,396.60 (+4.2% in June).
Moves in the XJO
CBA continued to be the largest contributor to the index through June adding 45 points. Coming in at second was MQG contributing 17 points and gaining 7% on the share price. STO made the top five after a takeover offer from the Abu Dhabi National Oil Company sent its share price higher. BHP was the biggest detractor taking 23 points out of the index.
Table 1. Key index points contributors to the XJO
Sector Moves
At a sector level, Energy and financials were the best performing sectors while materials and and Consumer Staples was the worst-performing.
Figure 2. Sector moves for the month of June
Table 2. Option position summary of the five largest traded options series at the end of June (Source: ASX)
NOTE: Option Volumes in the above table are single-sided (i.e. on a per contract basis) excluding Market Makers
1. Total Volume including volume executed by Market Makers 2 Derivatives Liquidity Ratio (DLR) = options volume (in shares) / volume of underlying security
2. Put/Call Ratio: total volume of Puts excluding Market Makers / total volume of Calls
3. The net calls & net puts are the number of options contracts bought minus the number of options contracts sold, excluding Market Makers
Options Moves
Highest Activity: XJO leads with the highest volume (512,418) and open interest (227,530), indicating strong market-wide attention, though its put/call ratio (112.8%) suggests bearish sentiment with more bought puts and sold calls.
Mining Sector: BHP and FMG show solid volumes and high share volumes, with both having a bearish lean with a high number of sold calls and bought puts
Banking Stability: CBAs numbers give a mixed picture with both bought calls and puts. It could be that the bought calls are shorts covering their positions as there are a higher number of bought puts indicating a more bearish leaning.
Energy Sector: STO announced that it was a takeover target and given that government approvals is unlikely trades made the most of the large gain after the announcement selling calls and then wanting to capitalise on a fall by buying puts
Popular trades for the month:
Selling puts in Amcor. With AMC looking oversold at $14.00 a number of clients took the opportunity sell the $14:00 July puts for around $0.20. The stock subsequently gained and number decided to buy back the puts for a few cents and take the profit.
Moves Ahead
RBA Rate Decision: A potential 25-basis-point cut to 3.60% on July 8, driven by easing inflation and weak consumption.
Economic Data: May building approvals and retail trade, due mid-July, for housing and spending insights.
Global Trade: U.S. trade deal deadline on July 9 and tariff impacts on exports.
Corporate Earnings: Shifts in sector performance, with focus on banks and miners.
Commodities: Volatility in oil, gold, and iron ore prices.
Housing Market: Rate cut expectations and supply tightness affecting property prices. Further Information
Further Information
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