US markets trade cautiously, Wall Street remains on edge over Trump tariffs
Australian shares are expected to open flat, following a cautious lead from US markets — worried about whether US President Donald Trump will enact his proposed tariffs on imported metals.
Markets at 8:05am (AEDT):
- ASX SPI 200 futures flat, ASX 200 (Tuesday’s close) +1.1pc at 5,962
- AUD: 78.2 US cents, 56.3 British pence, 63 Euro cents, 82.86 Japanese yen, $NZ1.07
- US: Dow Jones flat at 24,884, S&P 500 +0.3pc at 2,728, Nasdaq +0.6pc at 7,372
- Europe: FTSE +0.4pc at 7,147, DAX +0.2pc at 12,114, Euro Stoxx 50 +0.1pc at 3,359
- Commodities: Brent crude +0.3pc at $US65.71/barrel, spot gold +1.2pc at $US1,335/ounce, iron ore -1.2pc at $US76.07/tonne
Tariffs and North Korea
Wall Street experienced a volatile day, with the main indexes alternating between gains and losses.
The Dow Jones index finished the day flat at 24,884 points, the S&P 500 rose 0.3 per cent, and the Nasdaq gained 0.6 per cent.
Traders cited a Bloomberg report as a reason for the market stabilising as the trading day progressed.
It quoted a close ally of Mr Trump, saying that the President was open to changes to his proposed steel and aluminium tariffs.
Possible progress being made in talks with North Korea. For the first time in many years, a serious effort is being made by all parties concerned. The World is watching and waiting! May be false hope, but the U.S. is ready to go hard in either direction!
Another source of relief was easing tensions with North Korea, with Mr Trump saying he saw “possible progress”.
This was after South Korea said, on Tuesday, that Pyongyang is willing to hold talks with the US on denuclearisation and will suspend nuclear tests while discussions are underway.
China also encouraged North and South Korea to continue their reconciliation efforts after a delegation from the South met with the North’s leader, Kim Jong–un.
“Possible progress being made in talks with North Korea,” Mr Trump wrote in a Twitter post.
“For the first time in many years, a serious effort is being made by all parties concerned.
“The World is watching and waiting! May be false hope, but the US is ready to go hard in either direction!”
There was no immediate comment from Pyongyang.
While Harley-Davidson stocks rose sharply yesterday, they reversed course overnight and have fallen by 1.75 per cent.
Over the weekend, the European Union threatened to impose tariffs on Harley-Davidson motorbikes if Mr Trump started a trade war.
Harley-Davidson issued a statement confirming there would be a “significant impact” on the company’s sales, if the EU and other countries introduced retaliatory tariffs.
Australia’s economic growth
The Australian dollar has risen 0.7 per cent to 78.2 US cents. It has also lifted against the British pound (+0.4pc) , euro (+0.2pc) and Japanese yen (+0.5pc).
The Bureau of Statistics will release its fourth-quarter GDP figures today.
Reuters-polled economists are expecting the Australian economy to have grown by 0.6 per cent in the three months ended December 2017 — which is a 2.5 per cent increase over the year.