Originally published by Rivkin Securities
US President Trump is continuing with his aggressive trade policies, announcing last night that he will continue with a plan to impose tariffs on $200bn worth of Chinese imports. This would, of course, spark retaliation from China and the overall result will be a negative for both countries. The stock market took the news badly with the S&P 500 falling back to 2,900, a 0.44% fall. Tech stocks fared a little better, falling just 0.23%.
Oil prices continue to rally, with WTI just breaking through US$70 per barrel following the bullish inventory report from Thursday. With refinery maintenance season approaching, however, the outlook for demand is set to moderate as refiners require less crude. On the other hand, sanctions on Iran are set to come into force on November 4 which may take a significant amount of crude off the world market.
Gold prices have managed to hold the US$1,200 level although the rally from mid-August has stalled. The weak Australian dollar has boosted the AUD price of gold which is now sitting just above AU$1,650 per ounce. The case for gold has improved over the past couple of weeks as the commentary from the Federal Reserve has become slightly more dovish than before. Although two more rate hikes this year are a high certainty, further hikes in 2019 are becoming less certain.
ASX 200 futures are up 12 points this morning.
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