To the scoreboard:
- Dow: 24,415.84 -251.94 (-1.02%)
- S&P 500: 2,705.27 -18.74 (-0.69%)
- AUD/USD: 0.7567 -0.0001 (-0.01%)
- ASX200 SPI futures (June contracts): 6,009 (-7)
1. It’s beginning to look a lot like a trade war. US steel and aluminum tariffs against NAFTA partners and the European Union start Friday, the Commerce Department announced. Canada quickly fired back with dollar-for-dollar taxes on US imports of the metals and other goods. Mexico and the EU also said they would retaliate.
2. Shares of US steel and aluminum manufacturers surged, but tech was the only other sector to post a gain as the Dow fell by more than 200 points. European stocks also fell, led by declines in Germany and Spain, and the ASX200 is pointing lower ahead of this morning’s open.
3. Italy’s populist parties reportedly struck a deal to try and form a new government. Giuseppe Conte will lead the coalition formed by the Five Star and League, the WSJ reports.
4. Italian bond yields continued to fall, with 2-year yields now back at around 1% after spiking as high as 2.73% amid the political turmoil on Tuesday.
5. Prices for brent crude oil (the global benchmark) edged higher above $US77 a barrel overnight, but US WTI prices dipped, leaving the spread between the pair at $US11 a barrel — the largest gap since 2015. US crude stockpiles fell by 3.6 million barrels last week (forecast 525,000) as refiners increased activity ahead of the Memorial Day holiday.
6. In currencies, the euro couldn’t hold above $US1.17 despite a solid print for Eurozone inflation. And the Canadian dollar lost ground while the AUD held steady. Bitcoin had a good night, posting a gain of more than 2% to climb back above $US7,500.
Today’s data calendar:
- Ai Group manufacturing data in Australia.
- Caixin manufacturing PMI data for China.
- Monthly manufacturing data for Japan, the US, UK, Germany, Italy, Spain, and France.
- US employment numbers (forecast growth in May of 195,000), including average hourly earnings.
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