Monday: 9th April 2018

OPENING CALL: The Australian market looks to open lower with SPI Futures down 33 points.

The Australian share market is expected to open lower, after Wall Street fell on Friday, mostly due to the escalating trade tensions between the US and China.

US stocks dropped about two per cent on Friday, with the Dow falling more than 570 points, as US President Donald Trump’s latest tariff threat on Chinese imports fuelled increasing concern over a US trade war with China.

Overnight Summary


Market Quotes by TradingView

Each Market In Focus

Australian Market

The Australian share market is expected to open lower, after Wall Street fell on Friday, mostly due to the escalating trade tensions between the US and China.
On Monday morning, the Australian share price futures index was down 33 points, or 0.57 per cent, at 5,739.
“Australian investors are inclined to think ‘well, it’s all a bit worrying but we’re yet to see it implemented,'” Dr Oliver said.
The Australian share market on Friday closed flat after a choppy session dominated by US President Donald Trump’s threat to slap China with even more trade tariffs..
The benchmark S&P/ASX200 was down 0.1 points at 5,788.7 points, while the broader All Ordinaries index was down 1.1 points, or 0.02 per cent, at 5,886.9 points.
In economics news on Monday, CoreLogic releases its weekly capital city house prices report, and the Ai Group performance of construction index is due out.
In equities news, Matt Comyn starts his new role as the Commonwealth Bank’s chief executive, replacing Ian Narev.

US Markets

US stocks dropped about two per cent on Friday, with the Dow falling more than 570 points, as US President Donald Trump’s latest tariff threat on Chinese imports fuelled increasing concern over a US trade war with China.
Stocks added to losses and hit session lows in afternoon trading after Federal Reserve Chairman Jerome Powell said the US central bank will likely need to keep hiking interest rates to keep inflation under control and said it was too soon to know if rising trade tensions would hit the US economy.
Fears of a trade war since Trump announced tariffs on steel and aluminum imports more than a month ago have kept investors on edge over concerns that such protectionist measures would hit global economic growth.
“It’s a reaction to concerns about the administration’s approach to trade. The market has vacillated between writing it off as just talk and assuming there could be a serious problem,” said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

Commodities

The spot price of gold in Sydney at 0700 AEST was $US1,332.83 per fine ounce, from $US1,324.44 per fine ounce on Friday.
IRON ORE: $61.90 -0.36(May contract)

Oil Futures

Oil prices fell Friday, capping their worst week in two months as investors became more fearful of rising trade tensions between the U.S. and China.
Oil prices have lately mirrored equity markets, which stumbled as fears of a trade war between the world’s two biggest economies grew throughout the week. On Friday, the Dow Jones Industrial Average plunged more than 700 points.

Forex

The dollar fell Friday as renewed trade jitters sent investors into assets perceived as relatively safe stores of value like the Japanese yen.
The WSJ Dollar Index, which gauges the U.S. currency against a basket of 16 others, was down 0.2% to 83.99 in late afternoon trading in New York. The dollar was down 0.4% against the Japanese yen to Yen106.92.
The U.S. dollar has fallen for five straight quarters and is down 7.6% over the last 12 months, as expectations of accelerating growth and tightening monetary policy abroad have pushed investors out of the currency.
Most recently, the dollar has also reacted to escalating trade tensions with China. It has typically climbed against emerging-market currencies when investors are concerned about a trade war, while falling against the Japanese yen, which tends to serve as a refuge for traders during times of political or economic uncertainty.

European Markets

The latest salvo in a trade row between the U.S. and China weighed on
Britain’s FTSE 100 on Friday, though the damage was limited as mining and bank stocks fell while utilities made gains.
President Donald Trump upped the ante by directing US officials to consider tariffs on a further $US100 billion of Chinese imports.
The blue chip FTSE 100 index ended the session down 0.2 per cent at 7,183.64 points, but outperformed the broader European equity market slightly.
The STOXX Europe index of companies in 17 European countries fell 0.35 per cent, with the trade-exposed auto sector the leading sectoral loser, down 1.7 per cent.
Germany DAX 30 index was down 0.52 per cent, and France’s CAC 40 fell 0.35 per cent.

Asian Markets

Asian stocks declined in a knee-jerk reaction to Trump’s latest tariff proposal but regained a measure of calm following Wall Street’s strong performance overnight.
MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.25 per cent. The index has spent the week swinging wildly in and out of negative territory amid the back-and-forth of the US-China trade dispute.
South Korea’s KOSPI lost 0.3 per cent. Japan’s Nikkei fell 0.36 per cent.
On Friday, New Zealand’s S&P/NZX 50 index rose 0.33 per cent, to 8,393.27.

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