The ASX is set to edge up this morning following a mixed day of trading on Wall Street. The Dow was the only index to end the day in the green, while the S&P 500 and the Nasdaq were flat amid continuing concern about a US recession.
Risk-averse investors abandoned the tech-heavy Nasdaq, which dropped 2.4% to 11,264, while the S&P 500 was down 0.8% to 3,941.
A profit warning from Snapchat owner, Snap Inc (NYSE:SNAP), saw its shares slide 43.1%, but Zoom Video Communications bucked the tech-slump trend, rising 5.6% after it raised its full-year profit forecast.
ASX SPI 200 futures was slightly up, to 7,126, early this morning, while the Australian dollar was flat at 71.05 US cents.
Pain at bowser despite excise cut
The European Union is moving closer to an embargo on Russian oil, while the US energy secretary Jennifer Granholm said the president had not ruled out implementing export restrictions to ease domestic fuel prices.
Back home, fuel prices continue to cause consumers and businesses pain, with prices well into the $2-per-litre range this week, even with the fuel tax temporarily eased.
The previous government temporarily lifted the excise as part of its final Budget in March, and that measure is set to expire later in the year.
Government coffers won’t be able to sustain the policy indefinitely and this is just one of the many ticking time bombs the new government faces as 2022 progresses.
Turning point in China relations?
Newly minted Prime Minister Anthony Albanese has received a “congratulatory letter” from the Chinese premier, Li Keqiang, following more than two years of stalled diplomatic relations with the country.
“The Chinese side is willing to work with the Australian side to review the past, face the future, uphold the principles of mutual respect, mutual benefit and win-win results,” the letter said.
The letter might be a sign that the trading giant is prepared to take Australia out of the deep freeze and lift the trade ban that is hurting so many industry sectors.
But the new Treasurer Jim Chalmers implored China to back the gesture with action and lift those sanctions on Australia, which he said were hurting Australian businesses.
These developments coincide with confirmation that China’s foreign minister Wang Yi will today embark on a Pacific mission, travelling to eight countries across the region in 10 days, and there are concerns in Canberra that more nations may join the Solomons.
The new government will have to reckon with these shifting geopolitical sands, but if trade sanctions were to lift it might be the tailwind the Australian economy needs.
Native Title case against Fortescue
The Yindjibarndi people are likely to mount a court challenge to Fortescue Metals over a Native Title compensation claim, after negotiations over royalty payments fell apart.
The traditional owners were awarded Native Title, with exclusive possession, by the Federal Court over their land in the Pilbara in Western Australia.
This case could see the company ordered to pay millions in compensation to the traditional owners for mining on their land without an agreement.
Chief executive of the Yindjibarndi Aboriginal Corporation Michael Woodley is pressing ahead with the claim for royalties from the mining giant, led by Australia's richest man, Andrew 'Twiggy' Forrest.
"A mining company coming into our country, not doing the right thing, not being respectful, refused to acknowledge Native Title rights and laws, and don't want to do an agreement based on what we consider to be industry standards," he told the ABC in an interview.
In other news
Iron ore was down $US1.19 or 0.9% to $US133.10 per tonne, as were base metal prices, with zinc down less than 0.1% and nickel down the most, lower by 4.3%.
The gold futures price rose by US$17.60 or 1.0% to US$1,865.40 an ounce. Spot gold was trading near US$1,866 an ounce at the US close.