US-China tariff talk slows market
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.