To the scoreboard:
Dow: 24,605.68 -423.52 (-1.69%)
S&P 500: 2,676.42 -37.41 (-1.38%)
AUD/USD: 0.7763 +0.0002 (+0.03%)
ASX200 SPI futures (March contracts): 5,919 (-43)
1. Trade war winds blow: US President Donald Trump announced plans for steep tariffs on steel and aluminium imports overnight (more details here), and the Dow promptly sunk by more than 500 points. It clawed back some gains later in the session, but it’s looking like an ugly day ahead for the ASX. Here’s the move in the Dow:
2. Trump’s trade announcement also prompted heavy demand for bonds, with the yield on benchmark US 10-years falling by six basis points to 2.81%. Also overnight US Fed Chair Jerome Powell made his second appearance in Washington for the week, and said he doesn’t see any evidence yet of sustained upward pressure on US wages.
3. Currency markets were choppy in the wake of the latest trade developments. The US dollar index initially tested the high end of its recent trading range before falling bank, and the AUD dollar had a volatile session. After climbing off yesterday’s lows overnight, the Aussie then tanked back to 0.7720 US cents before reversing the fall this morning.
4. Iron ore spot prices jumped back above $US79 overnight on a supportive outlook for Chinese steel prices, but futures markets dipped in the wake of the Trump tariff announcement. Oil fell again as US crude inventory rose, while gold bounced off its overnight low of $US1,304 an ounce amid demand for save-haven assets as stocks slumped.
5. Among the stock market volatility — with US stocks falling by at least 1% for three straight days — Bitcoin has held its value in a narrow range this week between $US10-11,000. And while Wall Street has been largely derisive of cryptos, the $US1 trilllion investment fund Wellington Management said in a note to clients that it’s looking into including cryptos as part of its portfolio.
6. And lastly, Business Insider sat down for an interview with Peter Selman, Deutsche Bank’s global head of equities. Selman said inflation fears have been a bit overblown, but believes that more volatility is on the way in 2018. You can read the full interview here.
Have a great weekend.