The ASX is expected to rise today, despite tariff jitters. ASX 200 futures rose 0.4% to 8001 points after the US session.
The S&P/ASX 200 Index rose 81 points, or 1.04%, to close at 7,925 on Tuesday, recovering more than half of the 138-point decline recorded on Monday. Gains were supported by start-of-month inflows and the Reserve Bank of Australia’s (RBA) decision to leave interest rates unchanged.
Real Estate led sector gains, advancing 2.18%, followed by Utilities (up 1.91%) and Telecommunications (up 1.70%). Industrials, Health Care and Consumer Staples posted more modest gains of 0.44%, 0.72% and 0.89% respectively, underperforming the broader market.
The RBA maintained the cash rate at 4.35%, noting that monetary policy remains restrictive. While the central bank acknowledged a decline in inflation, it emphasised that further progress is required to return inflation to the 2–3% target range on a sustainable basis.
“The Board is resolute in its determination to return inflation to target sustainably and will do what is necessary to achieve that outcome,” the RBA said in its post-meeting statement.
“Before the RBA’s board meeting in May, two critical data releases will influence whether the RBA cuts rates by 25 basis points to 3.85%, as we expect, or keeps rates on hold until July,” IG Markets analyst Tony Sycamore said.
These are:
• The Labour Force report for March, releasing on Thursday, April 17.
• The Q1 2025 inflation report, releasing on Wednesday, April 30.
US markets mixed as tariff uncertainty weighs on sentiment
US markets ended mixed overnight amid investor caution ahead of anticipated tariff announcements from Donald Trump. Data released overnight reflected growing unease surrounding trade policy.
The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index (PMI) fell back into contraction territory at 49 in March, following two months of expansion. Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee, said, “Demand and production retreated and destaffing continued, as panelists’ companies responded to demand confusion. Prices growth accelerated due to tariffs, causing new order placement backlogs, supplier delivery slowdowns and manufacturing inventory growth.”
Labour market data also showed signs of softening, with the Job Openings and Labor Turnover Survey (JOLTS) revealing a 194,000 drop in job openings in February, bringing the total to 7.568 million. The figures point to weaker labour demand, attributed in part to uncertainty around trade measures.
Bond markets responded accordingly, with the yield on the United States 10-year Treasury note falling 9 basis points to 4.15%, approaching key technical support near five-month lows at 4.10%.
Investors are awaiting further guidance from the ADP employment report and February’s factory orders ahead of the tariff announcement scheduled for tomorrow. Markets are currently pricing in 21 basis points of United States Federal Reserve interest rate cuts for June and 76 basis points of cuts across 2025.
Existing tariffs include a global 25% levy on steel and aluminium, and an increase in tariffs on Chinese goods from 10% to 30%. Additional 25% tariffs on autos and previously delayed tariffs on United States-Mexico-Canada Agreement (USMCA)-compliant goods are scheduled to commence this week.
Speculation is mounting that new measures could include reciprocal tariffs—potentially starting at 15% and negotiated down to 10%—as well as sector-specific levies targeting pharmaceuticals, agricultural products, copper, and lumber.
In response to rising risks, Goldman Sachs this week increased its 12-month recession probability for the United States from 20% to 35%. The firm noted that while equity markets have corrected from mid-February to mid-March and reflect expectations for modest economic slowing, they do not currently price in a full recession. A downturn could see equity indices fall 10–15% below their March lows.
European shares rise as investors brace for US tariffs
European sharemarkets rebounded on Tuesday, led by gains in banking and technology sectors, as investors positioned ahead of impending trade tariffs from United States President Donald Trump.
- The FTSEurofirst 300 index climbed 1.1%.
- The FTSE 100 index in London rose 0.6%.
Bank and technology stocks advanced between 1.5% and 1.7%, helping drive the regional recovery. Meanwhile, annual consumer price growth in the 20-nation eurozone eased slightly to 2.2% in March from 2.3% in February, aligning with market forecasts.
Currencies and commodities
Currencies
Currency markets were mixed against the US dollar.
- The euro weakened from US$1.0826 to US$1.0778, trading near US$1.0790 by the US close.
- The Australian dollar strengthened from US62.42 cents to US62.82 cents, hovering around US62.75 cents late in the session.
- The Japanese yen appreciated from 149.97 to JPY148.96 per US dollar and settled near JPY149.60.
Commodities
Oil prices declined modestly as traders weighed the prospect of retaliatory tariffs.
- Brent crude slipped US28 cents or 0.4% to US$74.49 per barrel.
- West Texas Intermediate fell by the same margin to US$71.20 per barrel.
- Base metal prices were mixed. Copper futures held steady as optimism over Chinese factory output was offset by tariff-related uncertainty. Aluminium futures dropped 1.3%.
- Gold futures eased by US$4.30 or 0.1% to US$3,146 per ounce on profit-taking, though prices remained close to record levels. Spot gold hovered near US$3,118 after earlier touching an all-time high of US$3,148.88.
- Iron ore futures retreated US30 cents or 0.3% to US$102.21 per tonne amid concerns over the impact of a potential trade conflict.
What about small caps?
The S&P/ASX Small Ordinaries gained 0.077% yesterday to finish at 3.002.30. The index has lost 1.89% over the past five days.
On the news front, you can read about the following and more throughout the day.
- Buru Energy Ltd has executed a Strategic Development Agreement (SDA) with Clean Energy Fuels Australia Pty Ltd (CEFA) to co-develop the Rafael Gas Project.
- Brookside Energy Ltd has achieved a key operational milestone at the Bruins Well, situated in the SWISH Area of Interest (AOI) within the Anadarko Basin, Oklahoma. Drilling operations have been finalised and the well has been safely secured, with production casing successfully installed and cemented.
- Novo Resources Corp. is set to start a reverse circulation (RC) drilling program in April 2025 at the Tibooburra Gold Project in northwestern New South Wales. The program will target the Clone prospect across several hundred metres of strike length. The upcoming campaign follows a recent three-week field program that involved geological mapping and surface sampling, which confirmed high-grade gold targets warranting further drill testing.
- Livium Ltd has secured approximately A$850,000 in grant funding through its wholly owned subsidiary, Envirostream Australia Pty Ltd, under an agreement with the Western Australian Government. Envirostream, which is at the forefront of Australia’s battery recycling industry, will utilise the funding to advance its operations in the state.
- Leeuwin Metals Ltd has commenced its maiden drilling program at the recently acquired Marda Gold Project, located in the Goldfields region of Western Australia. The initial campaign will comprise approximately 2,000 metres of drilling at the Marda Central target, focusing on extensions to shallow, high-grade mineralisation adjacent to historical open pits. This phase marks the beginning of a broader 10,000-metre program scheduled for 2025.
