Australian futures are pointing to a 1.2% slide for the S&P/ASX 200 index today after US President Donald Trump pressed ahead with plans to slap tariffs on Canada, Mexico and China, with more trade barriers in the works.
The kiwi dollar was at 56.38 at 7am from 56.40 cents last week as investors assess Trump’s tariff programme, triggering threats of retaliation. Stocks on Wall Street tapered off on Friday as investors received conflicting reports about the scope and timing of the regime.
“Trade tensions will remain in focus as markets open for the week,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “Despite the whipsaw price action, the absolute moves against the dollar were modest for most G10 currencies.”
Trump pressed ahead with plans to impose a 25% on Mexican and most Canadian imports, with Canadian energy imports at a lower 10% rate, and a further 10% tariff on China.
He also signalled tariff plans for computer chips, pharmaceuticals, steel, aluminium, copper, oil and gas as early as mid-February.
Canada’s prime minister Justin Trudeau promised to respond with 25% tariffs against US$155 billion of US goods, while China said it plans to filed a suit in the World Trade Organisation over the regime.
Nervous manufacturers
Fisher & Paykel Healthcare peer ResMed was among the bigger decliners on Friday, sinking 8.3%. Last week, Craigs Investment Partners estimated what kind of impact a tariff regime would have on the New Zealand medical device maker.
The threat of a trade war comes as US tech investor confidence was dented by the emergence of China’s DeepSeek artificial intelligence startup, which raised questions about the extent of investment that’s been pledged in existing plans, and as Australasian investors prepare for earnings season. Amcor, REA Group and News Corp are among ASX companies reporting this week.
Meanwhile, the Wall Street Journal reported the Texas Stock Exchange startup officially filed papers with the US Securities and Exchange Commission with a view to start listing companies next year as a rival bourse to those in New York. Tesla has already got approval to move its incorporation to Texas, while the Journal also reported that Meta is in talks to follow suit.
Exxon Mobil and Chevron reported softer profits in 2024 as they grappled with weak natural gas prices and skinnier refining margins, while also record amounts of oil and gas from some fields.
Locally, Australian retail sales are the main data today, with New Zealand employment figures on Wednesday the major economic release on this side of the Tasman.
Reporting by Paul McBeth. Image from Athanasios Papazacharias on Unsplash.