Markets on ‘Trump watch', braced for recession risk as ASX tipped to steady
The Australian sharemarket closed higher on Thursday, buoyed by energy stocks, gold miners and consumer staples. The ASX was closed on the Good Friday and Easter Monday public holidays and this week will open for three days of trading, closing on Friday for Anzac Day.
'I suspect, as we have been for the last month or two, we'll be on Trump watch,' says Stephen Miller, investment strategy consultant at GSFM. 'We have seen some mitigation of the 'Liberation Day' announcements. But they've been just that – mitigation, not eradication,' Miller says.
Companies and investors are grappling with an aggressive tariff landscape poised to keep shifting and fuelling worries about a recession as US President Donald Trump's administration negotiates with a range of countries. While he has paused some of the heftiest levies on imports, the US is also locked in an escalating trade battle with China, the world's second-largest economy.
Beijing warned nations against making trade agreements with Washington that hurt China, highlighting how economies around the world risk getting caught up in tensions between the two powerhouses.
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US Vice President J.D. Vance arrives in New Delhi on Tuesday (AEST) as the US threatens to increase the 10 per cent tariffs on Indian exports to 26 per cent if no deal is reached by the end of the 90-day pause Trump put in place this month.
'The prospects of a global recession are growing, and I think they're trying to calibrate what that might imply for markets. Personally, I'm a little on the pessimistic side. I suspect that the prospects of a recession this year are greater than 50 per cent,' Miller says.
Closer to home, preliminary April PMI data for Australia will be released on Wednesday. These reports will provide an initial look at the impact of reciprocal tariffs on manufacturing and services sectors.
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