US metal tariffs re-ignite trade war fears as global markets tumble


June 01, 2018 07:43:02

US President Donald Trump has reignited fears of a trade war — this time with America’s key trading partners.

Markets at 7:00am (AEST):

  • ASX SPI 200 futures -0.2pc to 6,007 ASX 200 (Wednesday close) -0.5pc at 6,012
  • AUD: 75.66 US cents, 56.92 British pence, 64.7 Euro cents, 82.38 Japanese yen, $NZ1.08
  • US: Dow Jones -1pc at 24,416, S&P 500 -0.7pc at 2,705, Nasdaq -0.3pc at 7,442
  • Europe: FTSE -0.2pc at 7,678, DAX -1.4pc at 12,605, Euro Stoxx 50 -0.8pc at 3,415
  • Commodities: Brent crude +0.1pc at $US77.59/barrel, spot gold -0.3pcat $US1,297.50/ounce

The Trump administration has slapped tariffs on imported steel and aluminium from the European Union, Mexico and Canada, which have all indicated they will retaliate against the United States.

Wall Street and European markets fell as a result and Australian shares are likely to follow.

The Dow Jones index plunged by 252 points, or 1 per cent, to 24,416. The S&P 500 fell 0.7 per cent, while the Nasdaq is down 0.3 per cent.

European stock markets took a hammering, with Frankfurt’s DAX (-1.4pc) being the worst affected.

Friction between the United States and its trading partners has roiled financial markets since March, when Mr Trump first announced the metal tariffs.

Rising uncertainty

Trade issues overshadowed economic data showing accelerated growth in US consumer spending.

“There’s added uncertainty,” said Shawn Cruz, manager of trader strategy at TD Ameritrade in Chicago.

“The tariffs are not just between the US and China. Now you have North America and the euro zone.

“The market is even more sensitive to that, when it had already been on edge.”

Shares of industrial giants Boeing and Caterpillar slipped 1.7 per cent and 2.3 per cent respectively.

Utilities, seen as a defensive sector, were the biggest gainers among the S&P 500’s major sectors, rising 0.1 per cent.

The Australian dollar is weaker across the board and has slipped to 75.65 US cents.

In economic news, property analytics firm CoreLogic will release its latest housing price figures, which are expected to show a further decline in Sydney and Melbourne prices.










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