The ASX is expected to further decline today after both Australian and US markets saw another day of selling. ASX 200 futures are down 79pts (-0.98%) as of 8:30 am AEDT.
The ASX200 closed 47 points lower (-0.58%) yesterday at 8,198.1, weighed down by Energy (-3.17%), Utilities (-2.27%), and Consumer Staples (-1.02%). Defensive sectors Health Care (+0.32%), Industrials (-0.06%), and Telecommunications (-0.27%) outperformed.
The index initially dropped 94 points to a fresh seven-week low of 8,150.2 before buyers stepped in, capitalising on its 5.35% retreat from the mid-February high of 8,615.
The decline followed President Donald Trump’s confirmation that 25% tariffs on Mexican and Canadian importsand a 10% levy on Chinese goods took effect yesterday afternoon. In response, Canada and China announced retaliatory tariffs, deepening trade tensions and unsettling global markets.
“At a time when US GDP estimates are being revised lower, economists were busily adjusting their forecasts upwards for today’s Australian Q4 GDP after yesterday’s better-than-expected net exports data,” notes IG Markets analyst Tony Sycamore.
“GDP for the December quarter is expected to rise by 0.7% QoQ, boosting the annual rate to 1.4%, the highest since Q4 2023. If proven correct, this will show the Australian economy is stronger position than the market and the RBA had previously anticipated. Good news, particularly if it can help end the “per capita recession” of seven consecutive quarters of declining per capita GDP.
“Ahead of the data, the Australian interest rate market is fully priced for a 25bp RBA rate cut in July and is pricing in a 75% chance of an RBA rate cut in May and a cumulative 59bp of RBA rate cuts for 2025.”
Losses on Wall St
Wall Street extended losses overnight, with concerns over a worsening trade war driving the selloff.
Despite risk aversion, US 10-year Treasury yields rose 9 basis points to 4.24%, snapping a nine-day losing streak. The move followed Germany’s political agreement to reform borrowing rules and establish a €500 billion infrastructure fund, aimed at military revitalisation and economic stimulus. Yields appear to have found support around 4.10%, similar to December levels.
In equities, Tesla slid 4.4% to $272.04, breaching its 200-day moving average for the first time in six months, amid reports of a 50% year-on-year decline in February vehicle sales in China. General Motors (-4.6%) and Ford (-2.9%)also fell, as concerns over rising tariff-related costs weighed on automakers.
“Looking ahead, traders will closely monitor Trump’s address to Congress for potential clues regarding future trade policy, as well as Friday's non-farm payrolls report for insights into the impact of measures taken by the Department of Government Efficiency (DOGE) under Elon Musk. The US rates market has 70bp of Fed rate cuts priced for this year, up from 31bp after the warmer CPI print in mid-February,” Sycamore said.
Europe retreats
European sharemarkets retreated from record highs on Tuesday, following a global sell-off triggered by the implementation of US tariffs on Canada, Mexico, and China. The automobiles and parts sector led declines, slumping 5.4%—its steepest drop since March 2022. Stellantis fell 10.2%, while BMW and Ferrari lost 5.9% and 4.4%, respectively.
- The continent-wide FTSEurofirst 300 index closed 2.2% lower, marking its worst session since August 2024.
- In London, the UK FTSE 100 index declined 1.3%.
Currencies and commodities
Currencies
Currency markets were mixed against the US dollar in European and US trade.
- The euro rose from US$1.0476 to US$1.0626, holding near US$1.0620 at the US close.
- The Australian dollar strengthened from US61.87 cents to session highs of US62.65 cents.
- The Japanese yen weakened from JPY148.09 per US dollar to JPY149.70 by the US close.
Commodities
Global oil prices fell to multi-month lows as reports emerged of OPEC+ proceeding with output increases in April, while trade tensions intensified following US tariffs and China’s retaliatory measures.
- Brent crude declined by US58 cents, or 0.8%, to US$71.04 a barrel, hitting a session low of US$69.75, the weakest since September.
- US Nymex crude edged down US11 cents, or 0.2%, to US$68.26 a barrel, after touching US$66.77, its lowest since November.
Base metal prices were mixed.
- Copper futures fell 1.1% as concerns over a trade war resurfaced, while aluminium added 0.3%.
- Gold futures climbed US$19.50, or 0.7%, to US$2,920.60 an ounce, as demand for safe-haven assets increased amid rising geopolitical tensions. Spot gold traded near US$2,915 at the US close.
- Iron ore futures rose US80 cents, or 0.8%, to US$101.61 a tonne, buoyed by signs of improving factory activity in China and expectations of further economic stimulus ahead of a key policy meeting.
What about small caps?
The S&P/ASX Small Ordinaries (XSO) slumped 1.74% yesterday to 3,102.30. Over the past five days, it has lost 2.26%.
News is trickling in today.
- Race Oncology Ltd has executed a Work Order (WO) contract with Contract Research Organisation (CRO) George Clinical International to support the Phase 1 RAC-010 trial of RC220 bisantrene in combination with doxorubicin. The total contract value is A$8,582,117.
- Dynamic Metals Ltd has begun a Reverse Circulation (RC) drilling program at the Cognac West prospect, part of the Widgiemooltha Project in Western Australia, after defining multiple drill targets from large soil sampling anomalies and high-grade rock chip assays.
- Sovereign Metals Ltd has provided landowners immediate access to land to start maize crop farming without missing a planting season, after successfully completing rehabilitation work on a test pit at the Kasiya natural graphite and rutile project in Malawi.
- St George Mining Ltd has provided an update on the downstream processing study for its wholly owned Araxá Project in Minas Gerais, Brazil. The company finalised the acquisition of the Araxá Project on 27 February 2025 and has since initiated a comprehensive development program. The first phase of work includes metallurgical testwork on the project's niobium and rare earth element (REE) mineralisation, alongside a substantial drilling campaign set to commence this month.