ASX to sink as Donald Trump threatens to impose tariffs on Brazil and Argentina metal imports


Updated

December 03, 2019 08:09:35

Australian shares are headed for a sharp fall in early trade after US President Donald Trump decided to impose tariffs on metal imports from Brazil and Argentina.

Market snapshot at 8:05am (AEDT):

  • ASX SPI futures -1.3pc at 6,778, ASX 200 (Monday’s close) +0.2pc at 6,862
  • AUD: 68.2 US cents, 52.68 British pence, 61.54 euro cents, 74.32 Japanese yen, $NZ1.05
  • US: Dow Jones -1pc at 27,783, S&P 500 -0.9pc at 3,114, Nasdaq -1.1pc at 8,568
  • Europe: FTSE 100 -0.8pc at 7,286, DAX -2.1pc at 12,965, CAC -2pc at 5,788, Euro Stoxx 50 -2.1pc at 3,627
  • Commodities: Brent crude +0.8pc at $US60.95/barrel, spot gold flat at $US1,464.25/ounce, iron ore +1pc at $US88.45/tonne

By 7:10am (AEDT), ASX futures were down 87 points or 1.3 per cent.

Meanwhile, the Australian dollar jumped to 68.2 US cents, up about half a cent since early-Monday.

This was due to some upbeat economic data from Beijing showing a surprise rebound in Chinese manufacturing activity.

The Reserve Bank board will meet today but most economists are not expecting an interest rate cut at 2:30pm (AEDT).

US widens its trade war

Mr Trump opened up a new front in his trade war by tweeting that he would reinstate tariffs, effective immediately, on all steel and aluminium shipped into the United States by the two South American nations.

Brazil and Argentina were exempted from steel tariffs (25 per cent) and aluminium tariffs (10 per cent) last year when Mr Trump was attempting to avoid a trade war with those nations.

However, the President accused them, on Monday (local time), of “presiding over a massive devaluation of their currencies” and harming US farmers in the process.

He also urged the Federal Reserve to cut interest rates further “so that countries, of which there are many, no longer take advantage of our strong [US] dollar by further devaluing their currencies”.

This surprise announcement came as investors paid close attention to the main trade war — between the US and China.

Both economic superpowers are aiming to sign a so-called “phase one” deal, in an attempt to de-escalate their long drawn out trade dispute.

On Wall Street, the Dow Jones index dropped 213 points, or 0.8 per cent, by 3:20pm (local time), and is on track for its steepest loss in almost two months.

The benchmark S&P 500 and tech-heavy Nasdaq indices fell by 0.7 and 1 per cent respectively.

European trading losses were even more severe as Germany’s DAX and Paris’ CAC indices sank by 2 per cent each, while London’s FTSE lost 0.8 per cent.

ABC/Reuters

More to come

Topics:

business-economics-and-finance,

stockmarket,

markets,

currency,

australia,

united-states

First posted

December 03, 2019 07:49:42





Source link

About the Author

Australia News
More Than 20 Years in News and jobs

Be the first to comment on "ASX to sink as Donald Trump threatens to impose tariffs on Brazil and Argentina metal imports"

Leave a comment

Your email address will not be published.


*


%d bloggers like this: