Please note that the commentary below is factual information provided to a group of readers as a web blog, and where an opinion is expressed by the author, it is GENERAL ADVICE only.
China/U.S trade talks will hit a crescendo tonight as the deadline for a resolution occurs this evening. Donald Trump has promised to significantly increase tariffs on Chinese exports if a resolution to his liking is not forthcoming. However if there is one thing we’ve learned about the Don it’s that he has mastered the ‘art of chest beating’ and not so much ‘the art of the deal’. My hunch is China will delay again tonight and Donald Trump will have no option but to produce a rubbish tweet or two explaining how negotiations have progressed well and will extend the tariffs deadline to allow further negotiations. This scenario would obviously be bullish for the AUD, Equities and Commodities, because tariffs of the likes of what Donald Trump has suggested (25% on all Chinese exports) could have a dramatic impact on both economies. One estimate suggest dire consequences for U.S growth prospects as a result of retaliatory tariffs from China.
AUD Down Again:
In other news, the AUD slipped marginally again overnight across the board, while U.S equities slipped as much as half a percent. European stocks fared worse, with the French CAC and Euro Stoxx 50 leading declines down as much as 1.9% at the close.
Economic data out today includes minutes from the latest RBA meeting, along with GDP and CPI numbers out of the UK and U.S.
AUD EXCHANGE RATES:
AUD/USD – 0.6955
AUD/GBP – 0.5337
AUD/EUR – 0.6195
AUD/NZD – 1.0570
AUD/JPY – 76.334
All Ords (XAO) – 6,377
Gold – A$1,838/oz
Silver – A$21.13/oz
WTI – US$61.76/barrel
DATA RELEASES TODAY:
AUD – RBA Monetary Policy Statement at 11.30am
GBP – GDP & Manufacturing Production m/m at 6.30pm
USD – CPI m/m at 10.30pm
ALL – U.S/China Trade Talks, Tariffs Deadline
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