Global markets are very volatile again this morning after Donald Trump threatened another 50% tariff on China. Hong Kong stocks fell 9.5%, their worst day since 1997. The Aussie dollar falls below 60 USc to a five-year low. The Kiwi is at a 16-year low.
In our bonus deep dive interview, ANZ’s Chief Economist for Greater China, Raymond Yeung, looks at whether China will now push even harder to de-dollarise its foreign reserves.
5 things to know in 5 minutes:
Markets swung wildly again overnight after Trump threatened a new 50% tariff on China. The Hang Seng closed down 9.5% and had its worst day since 1997. The S&P 500 was massively volatile, but had arrested its fall in late trade. ANZ Head of G3 Economics Brian Martin says there’s some hope trade deals can be done.
China is preparing stimulatory measures for both consumers and exporters in response to Trump’s tariff shock and is set to front-load some stimulus soon, says ANZ’s Chief Economist for Greater China Raymond Yeung.
But will China engineer a devaluation of the renminbi to help cushion the blow? Raymond says China is more likely to opt for some domestic price cuts and currency stability in the longer run.
ANZ Commodity Strategist Soni Kumari says fears about global growth and production increases have driven oil prices down 15% since last Wednesday.
The ANZ-Indeed Australian Job Ads survey found a seventh consecutive month of relative stability, says ANZ Economist Aaron Luk.
Cheers,
Bernard
PS: Catch you tomorrow with the latest market action.
