US-China tar­iff talk slows mar­ket

The West Australian - - WEST BUSINESS -

Aus­tralian shares are set for a slug­gish start to the week in the wake of re­ports US Pres­i­dent Don­ald Trump had called for fresh tar­iffs on Chi­nese prod­ucts.

The news took the shine off US mar­kets on Fri­day which closed flat af­ter a dip when the story broke.

AMP Cap­i­tal’s chief econ­o­mist Shane Oliver said any tar­iffs that are im­posed won’t di­rectly im­pact lo­cal mar­kets, but all eyes will remain on the US next week to see if Mr Trump car­ries through with the threat.

“We prob­a­bly would have been stronger to­mor­row were it not for talk of Trump want­ing to go ahead with the ex­tra tar­iffs,” he said yes­ter­day.

Dr Oliver has tipped the Aus­tralian share­mar­ket to open with the slight­est of gains about five or six points up.

To­mor­row the re­lease of the min­utes from the Re­serve Bank’s last meet­ing is ex­pected to show the mon­e­tary author­ity re­mains op­ti­mistic about the lo­cal econ­omy, with no ur­gency to move on in­ter­est rates.

How­ever, home­own­ers and in­vestors may not be so happy when the Aus­tralian Bureau of Sta­tis­tics re­leases house price data for June.

Dr Oliver says it is set to show yet an­other fall — about one per cent, led by Syd­ney and Mel­bourne. Mean­while, pop­u­la­tion fig­ures to be re­leased on Thurs­day are ex­pected to show strong growth, ac­cord­ing to Dr Oliver, and may add fuel to the im­mi­gra­tion de­bate.

In­ter­na­tion­ally, most in­ter­est will be on the trade war be­tween China and the US.

Lo­cally, the skir­mish will also im­pact on the Aus­tralian dol­lar, which looks likely to suf­fer as the green­back strength­ens on the back of Mr Trump’s tar­iff threats.

On Fri­day, the bench­mark S&P/ASX200 in­dex closed 36.6 points higher at 6165.3 points, while the All Or­di­nar­ies in­dex was up 36.4 points at 6276.3 points.

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