To the scoreboard:
Dow: 23,957.89 -724.42 (-2.93%)
S&P 500: 2,643.69 -68.24 (-2.52%)
AUD/USD: 0.7693 -0.0072 (-0.93%)
ASX200 SPI futures (March contracts): 5,829 (-89)
1. Trade war ignites: US stocks got hammered after President Trump announced plans to hit China with a 25% import tariff on around $US60 billion worth of goods. Here’s everything you need to know. Combined with US-China geo-political tensions over Taiwan, markets have the jitters and ASX futures are pointing to a sharp fall at this morning’s open.
2. Safe-haven capital flows saw the yield on US 10-year bonds fall by 8 basis points to 2.83%. The Japanese yen has also found a bid, with USD/YEN pushing towards 105 while the AUD is down across the board with markets firmly in risk-off mode. It’s back below US77 cents this morning, with an even sharper 1.6% fall against the yen overnight:
3. Global mining stocks weren’t immune to the overnight selloff which doesn’t bode well for the sector in today’s session, and although spot iron ore prices stabilised yesterday futures markets have tumbled to their lowest level since November. Gold is slightly lower while oil prices receded from yesterday’s six week high above $US69 a barrel.
4. The Bank of England kept interest rates on hold at 0.5% overnight with a 7-2 vote. The move was expected, but the BoE indicated another rate hike is on the cards in May. The pound initially spiked in the wake of the announcement but subsequently gave back all of its gains.
5. In crypto news, bitcoin’s midweek rally above $US9,000 came to an end amid more regulatory scrutiny, with reports that Japan’s Financial Services Agency (FSA) may ban Binance — the largest cryptocurrency exchange in the world — from trading in the country without the necessary licenses.
6. Fear rising: Keep an eye on the VIX volatility index — a source of considerable interest to traders when US stocks tanked in early February. It shot up by 30% overnight to a reading back above 20. Today in Asian trade there’s Japanese inflation data, followed by Canadian retail sales and inflation figures tonight along with US durable goods orders.
Have a good weekend.