To the scoreboard:
- Dow: 24,356.74 +181.92 (+0.75%)
- S&P500: 2,736.61 +23.39 (+0.86%)
- AUD/USD: 0.7386 +0.0006 (+0.05%)
- ASX SPI futures (September contracts): 6,195 (+28)
1. It’s on: Tariffs on Chinese imports to the US are set to kick in today. Chinese authorities warned in June that Beijing would hit back with levies of its own soon after the US tariffs go into effect.
2. But US stocks shrugged off trade war fears as markets returned from holiday, while European stocks also got a boost following reports President Trump may withdraw his tariff threat against European automakers. The ASX looks set to follow that strong lead, despite further falls on Chinese markets yesterday.
3. The minutes from the US Federal Reserve’s June meeting revealed some concerns about the negative fallout from a trade war, but Fed officials remain broadly positive about the outlook for the US economy. In a speech overnight, Bank of England governor Mark Carney also touched on trade war fears but indicated the BoE is on track to hike rates again soon.
4. A bullish Carney and strong data out of Europe in the form German factory orders both underpinned solid gains for the euro and pound against the greenback overnight. The Aussie dollar briefly pushed back over US74 cents before falling back to end the session little-changed.
5. In commodities, oil fell more than 1% in a choppy session after a rise in US crude inventory. Gold is steady but copper prices slumped again and have now fallen by 14% over the last month. And iron ore prices also fell sharply ahead of the US-China tariff deadline.
6. Along with the implementation of tariffs, global markets will also be guided by key employment data in the US tonight. The forecast is for another 190,000 jobs to be added, with average hourly earnings edging higher to 2.8% in annual terms.
Here’s the other notable events on today’s economic calendar:
- Ai Group construction PMIs in Australia.
- German industrial production figures.
- Canada reports employment and trade data.
- US trade data.
Have a great weekend.