Weekly Market Recap
Steeling the show
17/02/2025
Week in review
- U.S. CPI inflation rise 3.0% y/y, core CPI 3.3% y/y
- Westpac consumer confidence steady in January
- NAB business conditions retreated, but confidence rose
Week ahead
- RBA and RBNZ policy rate decisions
- Australia unemployment rate
- U.S. and Europe PMI for manufacturing
Thought of the week
The situation with tariffs from the U.S. and the response from other countries is still evolving. Australia hasn’t been exempt, even though it has a trade deficit with the U.S. Starting in March, a 25% tariff will be applied to Australian steel and aluminium imports. While the overall economic impact on Australia may be relatively small, specific industries will fell it more, as will politicians. In 2024, steel and aluminium exports made up about 4% of total Australian exports, but only 0.1% of those went to the U.S. So, the direct effect on Australia’s trade balance is minimal. However, the broader impact on global trade and demand for commodities may be more significant for Australia’s growth outlook. The U.S. will also face challenges, as it imports most of its steel and aluminium and will have to incur higher prices until domestic production can respond. This may take some time.
Source: DFAT, J.P. Morgan Securities. Data reflect most recently available as of 14/02/25.
All returns in local currency unless otherwise stated.
Equity price levels and returns: Levels are prices and returns represent total returns for stated period.
Bond yields and returns: Yields are yield to maturity for government bonds and yield to worst for corporate bonds. All returns represent total returns. AusBond Comp is the AusBond Composite 0+ Yr, AusBond IG is the AusBond Credit 0+ Yr both provided by Bloomberg.
Currencies: All cross rates are against the Australian dollar. An appreciation of the foreign currency against the Australian dollar would be positive and a depreciation of the foreign currency against the Australian dollar would be negative.
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