Tariff turmoil - World Bank cuts global growth forecast
In its Global Economic Prospects report released on Tuesday, the global lender lowered its forecasts for nearly 70 per cent of all economies - including the US, China and Europe, as well as six emerging market regions - from the levels it projected six months ago before US President Donald Trump took office.
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News.com.au
11 minutes ago
- News.com.au
ASX 200 falls following record breaking run
The Australian sharemarket snapped its recent record run after US President Donald Trump and Iran defence minister Aziz Nasirzadeh exchanged threats. The benchmark ASX 200 index slid 27 points or 0.31 per cent to 8,565.10, after reaching a record close on Wednesday on the back of trade talks. The broader All Ordinaries also fell, losing 23.60 points or 0.27 per cent closing at 8,796.00. The Australian dollar slipped 0.25 per cent and is now buying 64.92 US cents. Seven of the 11 sectors actually finished in the green, led by energy stocks but a fall in the index heavy banks and material shares dragged the market lower. The market initially traded higher before falling throughout the day, on the back of commodity prices after Mr Trump and Mr Nasirzadeh exchanged threats as the US President vowed to not let Iran enrich its uranium. Despite the price of oil spiking by 5 per cent to nearly $US70 a barrel it was a mixed day for the producers. Woodside Energy shares slipped 0.21 per cent to $23.47, while Santos is up slightly by 0.15 per cent to $6.71. Gold miners were among the major winners with Northern Star Resources up 1.23 per cent to $21.43, while Newmont jumped 2.98 per cent to $83.21 and Genesis Minerals soared 6.03 per cent to $4.75. On the other hand, the index heavy financials slipped during Thursday's trading. Commonwealth Bank fell 0.48 per cent to $180.53, NAB dropped 0.20 per cent $38.99, Westpac slumped 0.83 per cent to $33.35 and ANZ finished in the red down 0.50 per cent to $29.79. Capital. Com senior financial market analyst Kyle Rodda said Thursday's run up in the oil price built on a move that began with hopes from the US-China trade progress. 'News out of the Middle East that diplomats were being evacuated from the US embassy in Baghdad due to threats from Iran sparked fears about disruptions in energy markets and unsettled broader market sentiment,' he said. Mr Rodda also said data out of the US showed it had dipped further into its oil reserves than predicted. 'The imbalance between the supply and demand outlook in oil markets, especially after OPEC's recent decision to not increase output in July, appears to be reversing, pushing up oil prices. Last night's rally drove oil prices through a critical resistance zone.' In company news, shares in online luxury fashion retail platform Cettire slumped 31.18 per cent to a record low price of $0.32 after a major profit warning. Shares in Myer also fell 0.7 per cent to $0.69 after the department store retailer told the market director Jacquie Naylor would retire from the board after six years in the job. Monash IVF shares were on the rise up 9.1 per cent to $0.66 after announcing chief executive Michael Knaap had left the business after a second embryo mix up in three months.
West Australian
34 minutes ago
- West Australian
Reserve Bank warns ‘periodic disruptions' to debt markets are likely amid bond glut
Surging government borrowing across the world could push up interest rates and investors have been told to brace for repeats of the April volatility sparked by Donald Trump's trade chaos. Reserve Bank head of domestic markets David Jacobs warned investors to prepare for 'periodic disruptions' amid ongoing uncertainty overseas. But he said Australia's bond market — where governments and businesses borrow cash — should be strong enough and flexible enough to overcome any pressure. Interest rates on US government debt rocketed after Mr Trump's tax hikes on trade and the squeeze was widely cited as the reason his administration swiftly back-flipped on the worst of the proposals. While central banks like the RBA and US Fed set benchmark interest rates, there are many other factors that impact rates for borrowers across the market including businesses, banks, and ultimately, homeowners. 'Events in early April were somewhat dramatic, though brief, and illustrated how changes in the global economic system will play out quickest in capital markets,' Mr Jacobs said at the Australian Government Fixed Income Forum in Tokyo. He said markets had quickly steadied but only after the US paused the tariffs. 'That suggests little room for complacency,' he said. 'Much as international trade may be diverted in a new economic order – so too might international capital.' That might mean investors worry about Australia's position as a free trade nation and relationship with China in a world moving towards tariffs and protectionism. Yet Australia may also remain an attractive place to send cash because of strong institutions and a great credit rating. There has been a sharp increase in government borrowing in the aftermath of the COVID-19 pandemic and amid giant doses of stimulus pumped into major economies. Australian Federal Government net debt is set to hit $620 billion by June next year, about double the level from a decade ago. Mr Jacobs said increased borrowing and central banks stepping back pandemic-era operations meant more bonds were hitting the market — which had been labelled a 'global bond glut'. That means governments may need to pay higher interest rates on debt, potentially pushing up borrowing costs across the economy.
Sydney Morning Herald
an hour ago
- Sydney Morning Herald
The home politics of Trump's America Alone should not torpedo AUKUS
The decision by the United States to review the AUKUS submarine deal with two of its most faithful allies has rung alarm bells in Canberra, despite the claims from our leaders that we have nothing to fear. In some ways, the review was inevitable. Last October, a US Congressional Research Service report showed America's boat-building program was behind schedule and nowhere near able to supply the first of Australia's AUKUS nuclear submarines on time. The US review is being carried out under President Donald Trump's 'America First' mantra and his nation's ongoing political instability suggests Australia would be wise to conduct its own oversight. Under the first pillar of the pact, Australia will buy three to five nuclear-powered submarines from the US, starting in the 2030s, and build more through a joint initiative with the US and UK. Under the second pillar, the three nations will collaborate on advanced defence technologies. Australia is also contributing at least $4.6 billion to the US defence industrial base to shore up submarine production; $800 million has already been paid. The deal was announced in 2021 under then prime minister Scott Morrison and then US president Joe Biden. Trump's 'America First' has distorted many accepted beliefs about alliances. The US Defence Secretary Pete Hegseth's intimidatory call for Australia to boost defence spending by tens of billions of dollars to 3.5 per cent of GDP in the near term was a clear trampling of sovereignty brushed aside by Prime Minister Anthony Albanese. Now with Trump banging the drum loudly on China and Taiwan, the US review accentuates Australia's sovereignty vulnerability in signing up to the trilateral security partnership that permits a US president to refuse to release the boats to Australia if it is required for American defence priorities. The AUKUS partnership was built on a mutual strength, obligations and respect for sovereignty. The 'America Alone' mindset, while playing big to some of the folks back home, has echoes of the 1930s that, if allowed to fully flower, will further weaken America as world admiration for its values fades. The University of Sydney's United States Studies Centre found support for AUKUS's second pillar funding and future translation of basic research into capability was nascent and unco-ordinated. Given such problems, it is entirely possible that the timing of the review announcement and Trump's obsession with being seen to obtain the best deal in all circumstances are attempts to unbalance Albanese on the eve of their expected meeting at next week's G7 summit, and gain Australian concessions. Defence Minister Richard Marles indicated there were no contingency plans should the AUKUS partnership sink. 'Chopping and changing guarantees, you will never have the capability ... There is a plan here, we are sticking to it, and we're going to deliver it,' he told ABC radio on Thursday.
