US stocks had a rough session to end the week, after the Trump administration said it was considering a further $US100 billion of tariffs against China on Thursday night.
The initial fallout in Asian trade was relatively muted, but the sellers were in full control when US markets opened and the Dow closed more than 550 points lower.
In addition to the threat of an escalating trade war, US employment data missed expectations on Friday night.
There was a notable move back into safe-haven assets as the Japanese yen strengthened, gold rose and US 10-year bond yields fell by 6 basis points to to 2.78%.
In that environment, the Aussie dollar typically struggles although weakness in the US dollar provided a buffer for the AUD on Friday night. It closed the week down slightly at 0.7679 US cents.
In Australia this week there’s the NAB’s monthly business survey on Tuesday, and the RBA will present its semi-annual Financial Stability Review on Friday.
Key data abroad will be led by US inflation figures on Wednesday night.
Despite signs that the synchronised global growth rally is starting to fade, NAB’s business survey has been tracking strongly in recent months.
Tuesday’s release (11:30am AEDT) follows a bumper report which showed Australian business conditions hit a new record high in February.
That’s followed by Westpac’s monthly consumer sentiment index on Wednesday, which has also been improving and currently sits just off a four-year high.
The ABS has February housing finance data on Thursday and then there’s the RBA’s Financial Stability Review scheduled for 11:30am on Friday.
The bank highlighted concerns about investor lending in Australia’s property market as part of its previous review in October, although more recent commentary suggests it’s less worried about risks to financial stability.
US inflation data (Wednesday night) is expected to show inflationary pressures remained subdued in March. According to Bloomberg data, monthly core inflation is forecast to rise by 0.2%, leaving the annual rate at 2.0%.
Also on Wednesday the US Federal Reserve will release the minutes from its March meeting, and across the pond the UK has industrial & manufacturing production data for February.
Earlier on Wednesday in Asian trade, China will report inflation data of its own. Analysts from Commonwealth Bank forecasting annual CPI growth to retreat slightly to 2.6% on lower food prices and travel costs.
And capping off the week of key data abroad, China reports its trade balance figures for March on Friday. The forecast is for a monthly surplus of $22 billion, down from $33.74 billion in February.
Have a great week.
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