Last night, U.S. equity markets traded lower and Treasuries rallied after comments from Donald Trump promising to impose substantial tariffs on foreign metals, 25% on steel and 10% on aluminium, sparked concerns of a trade war and drawing a rebuke from manufacturing industry groups and the European Commission. The big auto manufacturers were hit hard with the likes of GM closing 3.96% lower, Ford lost 3.11% and Fiat Chrysler lost 2.78%.
Other major industrial came under selling pressure including Cummins -4.33%, Caterpillar -2.85% and Deere -2.52% as the Dow recovered from a more than 550 point decline during the session to finish 420.22 points lower at 24608.98 or -1.68% lower. Looking at the other indices we saw the S&P 500 lower by 36.16 points or 1.33%, Nasdaq -92.45 points or -1.27% while the Russel 2000 closed the session just 0.33% lower for a loss of 5.67 points at 1506.78.
The political scene is set to fire up following on from today’s remarks from President Trump regarding the tariffs and we are set to see comments from within the Republic party and also from the wider business community at large as concerns start to surface as the market takes the view that the imported higher steel prices are likely to feed into the local market. It wasn’t bad news for everyone with the local steel stocks in the U.S posting positive sessions. A.K. Steel finished 8.53% higher, Nucor finished +3.36% and U.S Steel gained 5.63%.
Our local market has opened up weaker with the ASX200 currently trading at 5,928.40 down 44.94 points or -0.75%, with Health care -1.04% and Consumer staples -1.02% stocks leading the declines. Orocobre Ltd (ORE) and Galaxay Resources Ltd (GXY) have continued their disappointing run from yesterday’s session down a further -5.37% and -4.65% respectively. On a brighter note, Saracen (SAR) is higher by 2.11%, Resolute Mining (RSG) is higher by +2.03% along with St Barbra (SBM) shares which are better off by +1.85%. Of the banks CBA reached a high $76.20 and is currently trading at $75.48 down -0.78% whilst ANZ is down -1.15%.
Currency markets this morning see the U.S Dollar a little lower with the front futures trading just above key support at 90.00 at 90.23 while the AUDUSD is higher at 0.7766, USDJPY 106.10, EURUSD 1.2271 and spot gold is trading at USD $1317.50 per ounce. Bitcoin is back under USD $11,000 to be trading at $10,890.00.
USDJPY Chart attached;