Markets Overview
- ASX SPI 200 futures down 0.2% to 8,784.00
- Dow Average up 0.2% to 44,193.12
- Aussie up 0.5% to 0.6503 per US$
- US 10-year yield rose 1.8bps to 4.2277%
- Australia 3-year bond yield rose 2.9 bps to 3.40%
- Australia 10-year bond yield rose 3 bps to 4.25%
- Gold spot down 0.3% to $3,369.15
- Brent futures down 1.2% to $66.81/bbl
Economic Events
- 10:30: (AU) Australia to Sell A$1 Billion 63-Day Bills
- 10:30: (AU) Australia to Sell A$1 Billion 126-Day Bills
- 11:30: (AU) June International Trade Balance, est. A$3b, prior A$2.24b
- 11:30: (AU) June Imports MoM, prior 3.8%
- 11:30: (AU) June Exports MoM, prior -2.7%
US futures climbed and Asian equity futures were mixed after President Donald Trump warned he may impose a 100% tariff on chip imports.
Contracts for the S&P 500 and Nasdaq 100 rose early Thursday in Asia, erasing brief losses in a sign traders were left scrambling to identify which US companies may be affected. In post-market trading Wednesday, shares in Nvidia Corp and Apple Inc rose while those for Broadcom Inc fell. Equity index futures for Japan and Australia dropped with those for Hong Kong advancing.
Trump said the US would charge “a tariff of approximately 100% on chips and semiconductors,” late Wednesday in the US. He added “but if you’re building in the United States of America, there’s no charge.” The comments came as Apple Chief Executive Officer Tim Cook unveiled a $100 billion US investment plan alongside Trump in the Oval Office.
The latest tariff salvo injected fresh volatility on an otherwise bullish day on Wall Street that lifted US stocks and short-dated Treasuries, in part on firming expectations for a Federal Reserve rate cut next month. The dollar weakened.
Fed Bank of San Francisco President Mary Daly said policymakers will probably need to adjust rates in coming months to prevent further weakness in the labor market. Her Minneapolis counterpart Neel Kashkari said an economic slowdown may make a rate cut appropriate in the near term.
Separately, Trump may nominate a temporary Fed governor to fill a soon-to-be vacant seat on the central bank’s board, according to people familiar with the discussions.
In Asia, data set for release includes trade for Australia and China, inflation expectations in New Zealand and industrial production in Malaysia. Later Thursday, the Bank of England is expected to cut interest rates.
Trump told European allies he’s planning to meet with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy as soon as next week in another bid to bring peace between the two countries. The US imposed an additional 25% tariff on Indian goods, effectively doubling the rate announced days earlier, over its ongoing purchases of Russian energy. Oil prices fell Wednesday.
“While trade uncertainty and elevated valuations could be a modest headwind for equities in the near term, investors can consider ways to manage volatility while positioning for longer-term gains,” said Mark Haefele at UBS Global Wealth Management.
Those who are already allocated to equities in line with their strategic benchmarks should consider implementing short-term hedges, and those underallocated should prepare to add exposure on potential market dips, he noted.
“There are a lot of narratives to keep track of in today’s investing environment, but earnings remain the main catalyst for stocks,” said Bret Kenwell at eToro. “While pullbacks are possible — particularly due to macro-related influences and poor seasonality trends — those pullbacks will likely prove to be buying opportunities.”
