Originally published by Rivkin Securities
S&P/ASX 200 futures are off to a weak start after further threats about increased Chinese tariffs from US President Donald Trump rattled markets on Friday night. Having already threatened the Chinese with $US50bn worth of tariffs – with the Chinese raising the equivalent amount shortly after – Trump discussed plans for a further $US100bn to be implemented against the Chinese. Given the Chinese response to the first lot of tariffs announced, the market reacted with the view that the response will be the same this time around and there are now fears that we are heading to a trade war.
There are, however, a few factors suggesting that ultimately these plans are a negotiating tool and/or that Trump will be talked down. Most of the Trump administration’s advisors are talking down the plans, and GOP congress members have been publicly criticising the plans after the Chinese strategically targeted products manufactured in GOP-led regions. With the midterms due to be held in November and the GOP holding onto a tenuous majority, the Trump administration is walking a tightrope if it wants to keep its stronghold in both houses of congress.
Gold futures lead most metals higher on Friday on the back of US-China trade-war tensions and the weak March jobs report. The weak employment data helped gold log a daily and weekly rise as the US dollar weakened. Government data showed that the US created 103,000 new jobs in March to mark the smallest gain since for six months. The unemployment rate remained at a 17-year low of 4.1%. Economists had expected a stronger gain of 170,000 non-farm jobs. The news saw small falls for the day for the US dollar, while the Aussie edged up to end the week around 76.84 US cents, and not much changed from its previous close around 76.79.
Data Releases:
- No Significant Data