Markets Dominated by Trade War Fears

AUD

The Aussie Dollar opens mixed against the majors, mostly lower, as global trade war fears continue to escalate with Trump committing to imposing an addition 50% tariff on China, taking the total levy to 104%. Asian equities rebounded yesterday with NIKKEI 6%, SHANGHAI COMP 1.6% and ASX 2.3%. The Aussie Dollar continues to get hit hard as it sits in the crosshairs of a fallout between the US and China. Global trade war fears and risk sentiment far outweigh local data events at the moment. We did however have Westpac Consumer Confidence yesterday which went from 4% to -6% highlighting the growing economic fears in Australia. Investors now expect the RBA to have a more aggressive easing cycle to try and combat increasing prices from global tariffs. A full percentage point worth of interest rate cuts is priced in by November. Minimal data points for the Aussie this week, however, China has their inflation rate figures tomorrow expected at -0.2%.
 

USD

The AUDUSD rate opens down at 0.5951 after the White House confirmed Trump's threat to impose an additional 50% tariff on China will indeed take place. Trump has stated if China doesn't remove the 34% counter-tariff on US imports, he will add an extra 50% duty. This will take the total tariff rate on Chinese goods to a staggering 104% and is set to take place at 2pm AEST today. Wall Street saw further losses with DOW JONES -0.8%, S&P 500 -1.6% and NASDAQ -2.1%. All eyes are on Trump and his tariffs creating global uncertainty. Tomorrow the US has their inflation prints with Core Inflation M/M expected to increase slightly to 0.3%.
 

EUR

The AUDEUR opened down this morning at 0.5420 after hitting highs of 0.5566 overnight. European equities both recouped some of the losses with both DAX and CAC closing the day up 2.5%. Quiet week in the calendar for the Euro this week however expect plenty of volatility as global trade war fears continue to dominate the market.
 

GBP

The AUDGBP touched highs of 0.4760 overnight before falling 2.25% to kick off the day at 0.4655, with the decline attributed to planned tariff hikes from the US on China. The FTSE closed the day in the green at 2.7%. Also, a quiet week for the UK, main event for the week being their GDP on Friday which is expected to grow slightly to 0.1%.
 

NZD

The AUDNZD pair opens flat at 1.0780 this morning. Today the Kiwis have their interest rate decision with the RBNZ expected to cut their cash rate by 25 points to 4.5%.