The New Zealand dollar fell and stock markets in Europe were weaker after US President Donald Trump said he’s pressing ahead with plans to impose tariffs on Canada and Mexico next month and slapping an extra levy on China.
The kiwi fell to 56.40 US cents at 7am in Auckland from 56.83 cents yesterday, while Germany’s DAX 30 dropped 1.1% and France’s CAC 40 declined 0.5% as investors digested the latest round of tariff news. European business confidence improved in January on the prospect of lower interest rates, despite the pall cast by the threat of tariffs.
“We await news on Chinese retaliation, but their response to the earlier 10% lift in tariffs was restrained,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “It still feels that the market is nowhere near pricing in the full impact of tariffs, holding some hope that they will be delayed or, if imposed, prove to be temporary, given the havoc they’ll cause to the US economy and/or the market if they take effect.”
The latest comments come as Bank of Japan governor Kazuo Ueda warned of the heightened global uncertainty created by the prospect of tariffs, while Bank of England monetary policy committee member Swati Dhingra said higher levies were unlikely to drive persistent inflation in the UK.
London’s FTSE 100 increased 0.3% with upbeat outlooks from engine-maker Rolls Royce and the London Stock Exchange Group buoying the main index.
AI jitters
Meanwhile, stocks on Wall Street were mixed with the Nasdaq down 0.6% in afternoon trading as Nvidia’s stronger-than-expected earnings failed to soothe concerns about the company’s sales in China and narrower margins.
Even with the heightened worries about the size and pace of investment in artificial intelligence infrastructure, Bloomberg reported Apollo Global Management is discussing a US$35 billion financing package with Meta Platforms to help develop US data centres.
Salesforce was also weaker after missing earnings expectations.
The Dow Jones Industrial Average gained 0.7%, led by financial stocks such as Travelers and Visa.
The negative tone is pointing to a weaker day in the antipodes, with Australian futures indicating a 0.4% decline for the S&P/ASX 200 index.
Corporate earnings season ends with a flurry today, with Summerset Group Holdings, Vista Group International, NZ Rural Land Co, Delegat, and Move Logistics all scheduled to report, while Harvey Norman and Star Entertainment are among those to announce their results across the Tasman.
Local data today include ANZ’s monthly consumer confidence report, following on from yesterday’s stronger business sentiment survey, and Statistics New Zealand’s monthly filled jobs figures.
Online job listings firm Seek today said New Zealand job ads rose 4% in January, albeit still down 17% from a year earlier and too early to say volumes have stabilised.
Reporting by Paul McBeth. Image from Doug Nealy on Unsplash.
