6 things Australian traders will be talking about this morning

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It was a volatile day for US markets. Indexes swung sharply after China’s Ministry of Commerce announced a 25% tariff on $US50 billion worth of US exports Wednesday morning. Among the 106 affected products were some of the biggest American exports to China, including aircraft, autos, and soybeans.

To the scoreboard:

Dow Jones Industrial Average: 24,264.92 +231.56 (+0.96%)

S&P 500: 2,643.63 +29.18 (+1.12%)

AUD/USD: 0.7715 +0.0031 (+0.40%)

ASX 200 SPI futures (June contracts): 5,764.0 (+24)

  1. US stocks climbed back up after getting clobbered Wednesday morning. The Dow Jones industrial average erased a more than 500 point loss, led by gains in shares of Apple and IBM.
  2. Still, some aircraft companies didn’t completely recover.Boeing – the single largest US exporter to China – shed more than 3% at its lows. Shares in Boeing closed 1.06% lower.
  3. Prices of soybeans, which were listed as products affected by Chinese tariffs on the US, also took a hit, closing at $US10.17 — down around 2%. President Trump won eight of last year’s top 10 soybean-producing states in the 2016 election.
  4. Bonds and currencies fluctuated throughout the day. 10-year US treasury yields edged back above 2.8%, while the Aussie dollar remains well supported above US77 cents. CBA currency strategist Elias Haddad said the AUD’s strength is a sign currency markets aren’t convinced that the US-China protectionist rhetoric will weigh on global growth.
  5. Major cryptocurrencies fell sharply, with the digital currency market losing more than $US7 billion in just half an hour.
  6. Facebook admitted that up to 87 million users could have been affected by an information leak to the data firm Cambridge Analytica. Shares in the company closed 0.65% lower. Facebook later added that most of its 2 billion users may have had their data compromised by “malicious actors”.

Today’s economic calendar:

  • Chinese banks will be closed in observance of Tomb Sweeping Day.
  • Australia’s trade numbers will be released. The median forecast is for a $700 million surplus in February.

Have a great day.


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