Aussie shares shaky after Trump’s latest tariff threat

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Aussie shares shaky after Trump’s latest tariff threat

The *********** share market is off to a shaky start as investors winced at Donald Trump’s latest trade war blow, which turned out to be a feint.

By midday AEST, the S&P/ASX200 was almost flat, up 0.7 points, or 0.01 per cent, to 8,361.6, while the broader All Ordinaries rose 2.7 points, or 0.03 per cent, to 8,589.6.

US markets fell on Friday after the US president threatened a 50 per cent tariff on European Union goods from June 1, claiming trade talks with the bloc were progressing too slowly.

By Sunday, Mr Trump had delayed the duty imposition to July 9 after a phone call with EU Commission President Ursula von der Leyen.

“While Trump’s threat to impose a 50 per cent tariff on the EU is most likely a bargaining tactic, it adds pressure to finalise multiple trade agreements before the July 9 expiry of the reciprocal tariff pause, while continuing to complicate business decisions regarding capital expenditure and hiring,” IG Markets strategist Tony Sycamore said.

A subsequent US dollar sell-off has helped the Aussie dollar rally to a nearly six-month high of 65.35 US cents.

Four of 11 sectors were trading higher on Monday, with IT stocks up 1.7 per cent as WiseTech announced it would buy US cloud logistics provider E2open in a $US1.2 billion ($A3.2 billion) deal.

The energy sector was the other stand-out, up 1.1 per cent as oil prices jumped on news of the EU tariff delay.

Brent crude futures spiked as high as $US64.33 a barrel, before easing to $US64.06, while West Texas crude was trading just above $US62.04.

The big four banks were all trading lower, with financials down 0.2 per cent after pushing more than 0.9 per cent higher last week with help from the Reserve Bank’s dovish rate cut on Tuesday.

Investment and financial services juggernaut Macquarie Group bucked the trend, lifting 1.2 per cent to $208.77.

Miners were a mixed bag, with the materials sector grinding less than 0.1 per cent higher, with Rio Tinto down 1.6 per cent, BHP trading flat and Fortescue each up 0.6 per cent.

Gold miners were again heading higher as Trump’s trade threat pushed the safe haven higher over the weekend.

Gold futures are trading at $US3,344 ($A5,120) an ounce, roughly fiver per cent short of their all-time peak.

Cryptocurrency Bitcoin is heading higher after easing from a record-high last week and is now trading at $US109,700 ($A167,970).

Last week’s breakout reflected a shift in the structure of digital asset markets, trading firm Zerocap’s Mark Hiriart said.

“This isn’t your conventional retail-led speculation driving the surge,” he said.

“Instead, it’s underpinned by sustained institutional demand.”

The maturing of institutional investor infrastructure, including the rise of Bitcoin exchange traded funds (ETFs), was normalising what was a fringe portfolio choice 10 years ago, Mr Hiriart said.

Utilities was the worst-performing sector, slipping 2.2 per cent as Origin plummeted 4.3 per cent after it flagged a $50 million hit to earnings via its stake in Octopus Energy, due to unseasonable warmth in the United Kingdom.

The *********** dollar is buying 65.35 US cents, its highest level in six months as Trump’s tariff threats weighed on the greenback.

The DXY US dollar strength index – which measure’s its value against a basket of major currencies – is at three-year lows for the second time in five weeks.

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