Trump tariffs tax Australian dollar, ASX

The Australian dollar is hanging on grimly as weak GDP and trade wars pound away at sentiment:

Bonds are bid:

XJO is down -1%:

Dalian has lost overnight gains at the open:

Big Iron is falling with FMG trotting towards the key $4.50 support:

Big Gas is off:

Big Gold is up though whether it is a good hedge for trade wars is an open question. For the moment the USD is trading on the political risk but if tariffs get moving then inflation is the next risk and that is USD positive:

Big Sleazy is off with WBC breaking support:

Big Parasite is mixed but GMA is still falling:

Finally, Big Retail is not getting much support from GDP though DMP has found a magic pudding in buy backs:

S&P500 futures are still down -1.1% so more pain to come.

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Comments

  1. GunnamattaMEMBER

    Big turd wants a Cabinet seat…..

    https://reia.asn.au/wp-content/uploads/2018/03/Media-Release-7-March-2018-Housing-Affordability-falls-across-Australia-Report.pdf

    Mr Gunning said this may appear any easy prescription but the reality is that unless there is a coordinated and aligned approach by all three levels of government this will not occur.

    “We need to address this with some urgency and reform the planning and approval process. We need all tiers of
    Government involved and implementing change,” Mr Gunning said.

    “REIA believes a first step in this is the appointment of a Minister of Property Services. This would also recognise the
    importance of the property sector as a driver of economic growth and employment. Property investment supported by
    historically low interest rates has been a significant contributor to growth in the Australian economy since 2013/14 as
    we transition away from a decade-long reliance on mining,” he concluded.

    • Andrew note that dow is off more than Nasdaq and last few nights Nasdaq up faster
      People are kidding themselves if they think Nasdaq isn’t as over valued as dow
      Tech stocks will get hammered at some stage

  2. Not sure you’re logic is right there on inflation being bad for gold and good for USD.

    What happened last time these tariff wars erupted in 2002 …. US equities tanked, bond yields tanked, USD tanked and the gold bull emerged.

    In this situation it is likely to be stagflationary not good at all.

    With 40% more debt globally since 2008 do you really think the FED et al are going to get in front of the curve and blow up their respective sovereign overloads. Yeah …. nah.

    Do you think that inflation will be benign and the CB’s can control it once it emerges. Yeah … nah.

    Do you think wage earners, with the tight labour markets at present and the majority of whom are struggling to make ends meet are going to back-down on demanding higher wages (at least until recessionary forces emerge). Yeah … nah.

    Do you think that investors are going to look at the twin US deficits, of which the FED deficit is slated to be c. US$1.2T this year and not going to generate sustainable economic growth and be comfortable holding USD and TLT’s. Yeah … nah.

    Real yields will be low and geo-political risk will increase as the fragile “synchronized global growth” theme falls off the cliff just as the bonfire of massive liquidity piled high since 2008 finally ignites.

    All my uneducated opinion of course.