6 things Australian traders will be talking about this morning

(Jennifer Stewart / Getty Images)

Good morning.

To the scoreboard:

  • Dow: 26,246.96 +184.84 (+0.71%)
  • S&P500: 2,904.31 +15.51 (+0.54%)
  • AUD/USD: 0.7220 +0.0002 (+0.03%)
  • ASX SPI futures (September contracts): 6,195 (+28)

1. China has placed tariffs on $US60 billion worth of American products in a tit-for-tat response to the Trump administration’s latest round of sanctions. Markets were fairly muted last night in response, as the threat of further tariffs was already “heavily” priced into markets, said FXTM research analyst Lukman Otunuga.

2. But Jack Ma, the billionaire founder of Chinese e-commerce giant Alibaba, said the trade war is “going to be a mess” and added it could last for up to 20 years.

3. US bond yields continue to rise. Benchmark US 10-year treasury yields climbed by around six basis points to 3.05%, while 2-years rose above 2.8% to leave the 2-10 yield curve at around 24 basis points.

4. The US dollar edged higher as its two biggest trading pairs, the euro and pound, both fell. The Aussie dollar held its gains above US72 cents after rebounding strongly in Asian trade, and most emerging market currencies rose against the greenback overnight although the Turkish lira is back under pressure.

5. Copper prices — often viewed as a barometer of global trade – rose by more than 3% overnight, while iron ore hit a six-month high. And brent crude oil rose above $US79 a barrel following reports Saudi Arabia would be comfortable with prices back above $US80.

6. And most of the big US tech stocks were higher last night, but Tesla fell by more than 3% as the US Department of Justice opened a criminal probe into the company. The investigation is in connection with comments made by CEO Elon Musk last month that Tesla had secured funding to go private.

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Here are the key events on today’s economic calendar:

  • Bank of Japan interest rate announcement.
  • Speech by the RBA’s Chris Kent called “Money – Born of Credit?” (11:30am AEST).
  • The UK releases inflation figures.
  • European Central Bank President Draghi speaks in Paris.
  • Housing starts and existing home sales numbers are out in the US.

Have a great day.

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