‘Uncertain macro backdrop': ASX slips ahead of jobs figures
Cautious investors sold down the ASX on a quiet day of trading on Friday, despite the US and China resuming trade talks, as markets await critical jobs data out of the US.
The benchmark ASX 200 index slipped for the second consecutive day of trading falling by 23.20 points or 0.27 per cent to 8,515.70. The ASX200 has now recorded four consecutive weekly gains.
The broader All Ordinaries fell during Friday's trading, down 26.70 points or 0.30 power cent to 8,741.90.
The Australian dollar also is down 0.21 per cent and is now buying 64.95 US cents.
On an overall bleak day on the market, nine of the 11 sectors finished in the red with just energy, industrials and utilities gaining ground.
Woodside Energy gained 0.97 per cent to $22.94, while Santos is up 0.61 per cent to $6.58 as the price of Brent crude oil continues to recover over the week's trading.
Industrials also had a strong day led by Qantas Airways which jumped 3.46 per cent to $10.76 despite the news Virgin Australia is looking to re-list.
Transurban shares also rose 0.63 per cent to $14.38, and Computershares Limited rose 0.83 per cent to $41.08.
CBA shares slipped from its record highs down 0.79 per cent to $179.90, Westpac fell 0.24 per cent to $33.18 and ANZ traded 0.44 per cent lower to $29.50.
NAB was the only big four bank to finish in the eking out a 0.18 per cent gain and to close Friday's trading at $38.58.
eToro market analyst Josh Gilbert said initially there was optimism on the markets following 'very good' trade talks between Washington and Beijing.
But this quickly changed after a public spat between former friends President Donald Trump and Tesla chief executive Elon Musk.
'This will provide a hit to overall market sentiment, particularly tech, but may not be long-lasting for anyone other than Tesla,' Mr Gilbert said.
The overall lower volumes on the ASX comes as investors await the latest payroll data out of the US.
'The uncertain macro backdrop continues to provide a hurdle for risk-on sentiment, and cooling US economic data is leaving investors unassured,' Mr Gilbert said.
'With the labour market heavily in focus, the print this evening will be essential for market direction.'
Mr Gilbert said negative economic data released throughout the week could actually help drive the ASX 200 higher.
'The weaker-than-expected GDP data this week also drives the expectation for further rate cuts, further supporting the market optimism,' he said.
In corporate news, Worley shares fell 0.46 per cent to $13.08 despite the business announcing it had won a contract with Glenfarne to help support engineering work on its Alaska LNG pipeline.
Shares in gold miner West Cobar Metals soared 60 per cent to $0.024 after announcing it has completed the acquisition of the Mystique Gold Project in Fraser Range, Western Australia.
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SBS Australia
an hour ago
- SBS Australia
Europe, Indonesia or Japan? Can Australia find other allies to rely on if the US disappears?
Donald Trump's comments, in particular, that Canada should become America's 51st state and threatening to abandon European allies over defence spending have raised concerns about the US' reliability. Source: SBS, AAP For decades, the United States has been a reliable ally to Australia, whose protection has helped to ensure peace in the region. But US President Donald Trump's unpredictable and tough treatment of his nation's allies has raised questions about whether Australia can still afford to lean so heavily on America as a security partner. On Tuesday, Prime Minister Anthony Albanese told reporters the government will make decisions in Australia's national interest and fund the defence capability it needs . The comments came after US defence secretary Pete Hegseth requested Australia increase its defence budget to 3.5 per cent of its gross domestic product (GDP) in a conversation with Deputy Prime Minister Richard Marles on the sidelines of the Shangri-La Dialogue in Singapore last weekend. Australia's defence budget makes up roughly 2 per cent of GDP, which the government plans to increase to 2.35 per cent by 2034. While most experts do not believe the US will withdraw from the Indo-Pacific, Trump's actions raise questions about whether Australia should be seeking to cooperate more with other nations. In May, Ursula von der Leyen, President of the European Commission, raised the prospect of a formal defence agreement between the trading bloc and Australia. In response, Albanese said he would consider the proposal but noted a similar agreement was already in place with other European countries such as Germany. Without the US alliance, Peter Dean, director of foreign policy and defence at the United States Studies Centre at The University of Sydney, says Australia would need to massively increase its defence spending or accept it can't defend its own sovereignty. "If you look at the mismatch between the scale of our territory and the scale of our ability to defend it — it's one of the most glaring mismatches in the world," he says. "[You would] effectively be just hoping for the best." Dean says Australia needs to work hard to maintain its security and that a "community of nations" is necessary to support open and free trade, promote a rules-based international order, and counter the use of coercion, aggression, and military force to achieve political objectives. "If you don't have that community of nations, the example of what's happening in Ukraine is very poignant to everybody," he says. [Russia believes] in a 'might is right' world and they believe in a world where they get to shape those rules and that order, and that is not going to be favourable or in Australia's interests ... or for the majority of states in our region. Dean says Trump is more brutally transactional than previous presidents and an example of the adage in international relations that "you have no friends, you only have common interests". Although it's not always clear what Trump's interests are, Dean believes there's still a common alignment between Australia and the US, particularly in the Indo-Pacific region, and in the overall aims and objectives of their security policies. "That simply boils down to — we don't want an Indo-Pacific that's dominated by one particular power — especially China," Dean says. "That is an Australian view clearly articulated in our strategy, and that is a US view, clearly articulated by the US — even under this president." One of the potential problems with a China-dominated region, Dean says, is its desire to "rule by law" and the way in which China would go about setting and enforcing laws. "China particularly wants a hierarchical order where it sits on top and everyone else sits underneath," he says. In contrast, Australia and other like-minded countries support a "rule of law" system in which a community of nations jointly sets the rules through treaties, such as the United Nations Convention on the Law of the Sea. But Sam Roggeveen, the director of the international security program at the Lowy Institute, says the US has done very little to address China's dramatic military modernisation since the end of the Cold War. No matter who's in charge in the US, I don't think that will rescue Australia from having to think much more independently about its security. "The harsh truth for Australia and for other allies in the region is that the Americans aren't going to do the heavy lifting for us, and want us to do it ourselves." Dean says the alliance with the US is critical for national security, and forming an agreement with other countries would be very difficult. A strategic alliance involves countries committing to help each other out during a crisis, or to act in accord to address a common threat. This would preferably be set out in a treaty. Australia has an alliance with the US and New Zealand, but despite being part of the British Commonwealth, it does not have a formal agreement with the United Kingdom. Given the geographical distance, Dean believes military support from the UK would likely depend on what other conflicts are happening in its part of the world. When it comes to international alliances, arguably the most important is NATO (North Atlantic Treaty Organization), which commits Europe and North America to protecting each other from any threat. Rory Medcalf, head of the National Security College at The Australian National University, says there are three crucial elements to establish in alliances. Firstly, there must be clear interests in common. Secondly, the parties must articulate some shared values or political will to provide a foundation for trust. "If their security is threatened, then you have interests engaged," he says. And there must also be mutual capability. "There's not much point being an ally of someone if you bring nothing to the table and they bring everything," he says. Dean says no other state can replace the size, power and influence of the US, which is the world's number one military power. Dean says the US — by partnering with South Korea, Australia, Japan and other states — can aggregate enough power to balance China's influence and there is no "ready-made state" that could easily replace it. Without the US, Medcalf says China would likely seek to dominate countries one by one and break any alliance-like relationships. Even if Australia did more for its own defence, there would still be a good argument for maintaining a close relationship with the US because its military technology is among, if not the best in the world. But Roggeveen says Australia has to accept the US alliance is going to become less important over time. "With that in mind, we have to look geographically much closer to home," he says. While forming a new alliance may prove difficult, Medcalf says it would be possible for Australia to build coalitions with other nations to discourage things like coercive behaviour if there was some degree of confidence the US would still back them up. "It's really about using strategic partnership to make ourselves stronger, rather than building a kind of alliance where we expect to be standing shoulder to shoulder in war," he says. Australia is already part of several small groupings of nations with common interests in the Indo-Pacific, such as The Quad (a diplomatic partnership among the US, India, Japan and Australia) and AJUS (a trilateral partnership among Australia, Japan and the US). Defence cooperation has deepened via AJUS, while the security partnership AUKUS, which exists between Australia, the UK and the US, has laid the groundwork for Australia to acquire nuclear-powered submarines and other advanced capabilities. Australia has also entered into limited bilateral agreements with Indonesia, the Philippines, South Korea, Singapore and others. Medcalf, who is undertaking nationwide consultations to understand Australian attitudes to security, says most of these countries have no prospect of being treaty allies of Australia. But partnerships with countries like Japan, South Korea, the Philippines and Vietnam may be possible. All of these countries, apart from Vietnam, are already American allies. "They have different levels of capability that they would bring to the table," he says. "But the ultimate question is how much risk are we all going to take for each other?" Due to the number of member states that would need to agree to it, Medcalf suspects an agreement with the EU would likely be quite vague in its language and commitment. It may focus on increased technology sharing, access to defence industry resources and possibly some intelligence sharing. There could also be some aspirational statements about the rules-based order, or the intent to discourage and oppose aggressive action. "But it would fall far short of anything resembling a treaty commitment," Medcalf says. Dean agrees it's more likely Australia and the EU would support each other diplomatically to uphold rules and standards both in Europe and the Indo-Pacific. Medcalf points out Australia and many northern European countries share common values, including freedom of expression, the rule of law and secularism in politics. "[Australia's political values] are much closer to countries like Denmark, Sweden and Finland than to any of our neighbours except New Zealand," he says. Australia has previously manufactured a Norwegian-designed naval strike missile and German-designed armoured fighting vehicles. The EU could offer access to other sophisticated capabilities such as warships, drones and sensors. "The risk is obviously an expectation that Australia becomes more involved in Europe security problems ... obviously that's about confronting Russia," he says. While Medcalf believes Australia should be helping countries like Ukraine to defend themselves, there are limitations. What we shouldn't be doing is ever raising the expectation that we could be a frontline military actor on the other side of the world. Medcalf says Europe is in a different region to Australia, and it would be difficult to deploy troops or aircraft to each other's front lines. But Europe is highly trade-dependent and large countries like Germany and France, in particular, have an interest in maintaining the security of shipping in the Indian Ocean and the South China Sea, he says, adding that a significant number of shipping companies are also European. Roggeveen says countries in Europe and other parts of Asia are so far away they are never going to share the same vital interests as Australia. But Indonesia's interests are largely the same as Australia's, given they are neighbours. He says Indonesia is also predicted to be a great power by the middle of the century and likely the fourth or fifth biggest economy in the world. "We've never had a great power on our doorstep before, and we want Indonesia to be on our side when that happens," he says. "We have no more important relationship than Indonesia just to our north," he told ABC's 7.30 show. Other experts are sceptical about the potential for a quasi-alliance with Indonesia. While Medcalf agrees Australia should do more with Indonesia — including to help strengthen its navy and air force, and its ability to monitor what's happening in its waters — he notes its policy is to be "friends to all, enemies to none". "Which sounds great but in practice means that Indonesia is working very hard to be as neutral as it can be in future crisis situations." He says Indonesia has not been willing to speak out about China's behaviour in the South China Sea and doesn't have the capability to help Australia build its own defence technology base. Australia also has to accept that China already has a strong influence in Indonesia, he says. "If you're looking for a country that can partly fill the gap that the US may leave — I'd be looking to Japan before Indonesia. But if Indonesia ends up getting closer to our point of view, that would be wonderful," he says. Medcalf says some experts already characterise Japan's relationship with Australia as a quasi-alliance, and it is the most likely country to form an actual alliance with Australia, although the chances of this happening in the short term remain unlikely. He says both Japan and Australia share a strong belief in a rules-based system, and have different strengths they could bring to the table. They need the resources that we have. We need their technology, we need their investment. Medcalf doesn't think Japan's peace constitution — put in place at the end of World War Two to maintain its military for defensive purposes only — would be an impediment because politicians have been reinterpreting it over the last 20 years or so. "Japan is already moving away from 1 per cent, to 2 per cent of GDP, as its military budget," he says, adding that Japanese forces are increasingly training in Australia. However, Dean believes legal and cultural barriers still make it unlikely Japan will form an alliance with Australia. "But I think if the region was to have some type of strategic shock, or it was to really start to deteriorate, that would drive that alignment even closer together," he says. Medcalf says Vietnam is very good at maintaining a balanced relationship with China because it knows how to stand up to China, while also keeping the peace. "They've been doing both for about 1,000 years," he says. "[Vietnam] can defend itself, but it can also do diplomacy well." However, Medcalf says the Southeast Asian country would be very reluctant to enter into a treaty-like commitment with Australia, although there is potential for more cooperation in areas such as military training. Singapore has long been a valuable diplomatic partner for Australia and already cooperates on military training and exchanging information, Medcalf says. "But Singapore is ultimately a very self-interested and neutral country and I think we would work with them as much as we could without the expectation that either would actually take a risk on the other's behalf." He says he would put Malaysia in a similar camp. South Korea is a militarily significant country because it has a lot of capability, Medcalf says. "They now export defence equipment to Europe," he says. "South Korea is one of the few countries in the world that is genuinely able to do rapid military manufacturing at scale." But the problem is it's overwhelmingly focused on defending itself against North Korea. "Yes, they're slightly concerned about ensuring that China doesn't dominate the region. Yes, they're a US ally but they would probably be reluctant to project much further beyond the peninsula," he says. Medcalf says South Korea also has quite deep-seated political problems domestically, and its politics can be unpredictable. Medcalf says Australia's relationship with India has advanced significantly over the past decade — with each country's navy training together frequently and sharing information. Both countries' air forces jointly monitor the Indian Ocean. "[India] will probably be — within the next few decades — one of the three biggest powers in the world militarily, alongside the US and China." However, Medcalf says India is diplomatically very neutral and greatly values its autonomy. They're not going to be forming permanent alliance-like relationships with anyone. While India does not want to witness China dominate the Indian Ocean and would likely align with other countries in the region to balance against China, Medcalf says if it came to war, there would be only very limited circumstances under which it would get involved. "I guess they would certainly contribute to patrolling the Indian Ocean and potentially limiting China's ability to operate there, but I don't think India is going to be taking a lot of risk on behalf of others," he says. India may also expect other countries to come to its aid if there were a conflict with China on its border. "And that would be something that I think would be difficult for other countries to think about." The Philippines is one of the countries that claim parts of the South China Sea, which has led to clashes with China over issues such as fishing rights, islands and territories, Medcalf says. "The Philippines has traditionally been quite a weak military power but they're beginning to modernise their forces and their location is strategically very important — they're right at the heart of the sea lanes of Asia." While the Philippines is an American treaty ally, under former president Rodrigo Duterte, it became closer to China. Medcalf says it would make sense for Australia to have the Philippines as a partner, but caution is needed when considering the limits of its power and whether another change in government could alter dynamics. It's yet another example of how it's a nice idea to try and stitch all of these relationships together into something larger but without the Americans involved somewhere along the line, it still becomes quite flimsy. Like Australia, Canada is a middle-sized power but in some ways, it is militarily weaker. It's also a long way away. But Medcalf points out Canada is technically part of the broader Pacific region as its western coastline borders the Pacific Ocean. It's also surprisingly active in the region — supporting the UN efforts in East Asia to prevent illegal trade with North Korea and the smuggling of parts or precursors for weapons of mass destruction. "There's something to work with there but all of this stuff is only going to work if it's more than simply putting all your reliance on one country — they would be a small part of a much bigger puzzle."
ABC News
an hour ago
- ABC News
Tiny SA town buys disused primary school for $1.10, transforms it into op shop
If you have travelled along South Australia's Mallee Highway, there is a good chance you have driven past the tiny township of Geranium. Standing on the sleepy main street, there are remnants of what used to be a vibrant and bustling primary school. But beyond the bitumen road and through weathered school gates, a resident is putting smiles on people's faces one clothing rack at a time through her new opportunity shop. Set to the sound of a crackly Neil Diamond record, local of 40 years Marg Smith has made it her mission to turn sadness into spirit and help Geranium blossom once again. When Geranium Primary School closed its doors three years ago due to dwindling enrolment numbers, it shut a century-old chapter for the region. What was once a busy country town with one of the state's largest area schools now has a population of just over 80 residents. "My husband and our five children all went to school here, and I was [working] here when it closed, so it was tough." But through the hardships, Ms Smith has reinvigorated the space and turned an old design and tech room into a welcoming place for all. "The primary school was transferred to the community for $1.10 as an in-kind gesture from the state government … I think the 10 cents was for GST," Ms Smith chuckled. Since opening its doors just over a month ago, the store has welcomed people from far and wide. Interstate traveller Annette Swaby stumbled across the store accidentally. "We were travelling from Murray Bridge back home to Bairnsdale, Victoria when we came across the Geranium Op Shop," she said. "The people here are so friendly and nice, and it has been so delightful." Pinnaroo local Rita Francis travelled to Geranium for a special visit. After chatting with Ms Smith, the two women soon realised they had both grown up in the same village in Papua New Guinea. "How's that!" Ms Smith gasped. "I always used to love going to op shops because you just never knew what you might find, and now here in Geranium, you don't know who's going to walk through the door. While most of the money raised for the store will go towards facility maintenance and helping grow the community hub, Ms Smith hopes she can also donate funds to causes close to her heart. Ms Smith hopes the op shop will continue to lift up the community even as the town's numbers dwindle. "[The] primary school was once the focal place for Geranium, and now it's coming around full circle," she said. "I think we're a gem and a treasure. "We are small and we're getting smaller but just like Dr Seuss says, 'A person's a person, no matter how small' and so I think a community is a community, no matter how small."
ABC News
an hour ago
- ABC News
Grilling season demand for Aussie beef outweighs Trump tariffs
It has been more than two months since Donald Trump's "liberation day" tariffs were announced, which included a 10 per cent tariff on imported Australian beef. But US demand for lean beef has far outweighed the tariff and exports have been surging. "In terms of volume, I don't think Trump's tariffs have had an impact at all," Rabobank analyst Angus Gidley-Baird said. "Year to date, beef exports are up over 30 per cent and if we continue at this pace, we'll go very close to pushing our quota limit for the first time (which is about 450,000 tonnes)." According to Meat and Livestock Australia, 167,722 tonnes of beef have been shipped to the US so far this year, which is up 32 per cent. Beef exports to China are also rising, with 117,341 tonnes exported, up 30 per cent on last year. General manager of meat processing company, The Midfield Group, Dean McKenna, said Donald Trump's tariffs were "one of the best things" that had happened to his business. "I wish he went 50 per cent [tariff]," he told Queensland Country Life. The United States cattle herd is at its lowest point since the 1950s because of drought. The supply of lean beef for America's famous hamburgers is tight. Going into its summer "grilling season" the United States has been relying on beef imports, which has coincided with Australia producing record amounts. "The US needs a lot [of lean beef] and Australia has a lot to sell, especially the way the prices are at the moment," Mr Gidley-Baird said. US cattle and beef prices are at record highs and are expected to rise further in 2026, making imported Australian beef very competitive — despite the 10 per cent tariff. According to Rabobank the average finished cattle price in the US is over $US4.50 a kilogram live-weight ($A6.92/kg), compared to about $US2.25 a kilogram for Australian cattle ($A3.46/kg). Beef made headlines on Friday, when it was suggested Prime Minister Anthony Albanese was willing to "loosen or compromise biosecurity rules" for US beef imports. A claim the PM quickly denied. As previously explained by ABC Landline, Australia does not have a ban on United States beef, as long as it comes from cattle born, raised and slaughtered in the US. The Australian government has been assessing a request from the US to expand its access, to include beef from cattle that it has imported from Mexico and Canada and then slaughtered in the US. Yet at the moment, the US has a ban on importing Mexican cattle because of an exotic pest called new world screwworm. Cattle Australia chief executive, Chris Parker, said the US would need to prove it can be like Australian beef exporters, which adhere to strict traceability standards. "Our position is that the US needs to be able to demonstrate it can either trace cattle born in Mexico and Canada, or has systems that are equivalent to Australia's traceability, before imports of meat could occur from non-US cattle," he said. Australia has not imported any beef from the US since 2005 for a few reasons including price. Australia also has plenty of its own beef. In 2024, Australia produced more beef than ever before, turning off 2.57 million tonnes of beef, of which a record 1.34 million tonnes was exported around the world. So imagine if Australia exported iron ore for $100 a tonne and was then criticised for not importing American iron ore for $200 a tonne. As meat analyst Simon Quilty recently told Landline, importing US beef is not viable. "I don't see us being swamped by American beef, in fact I'd say for the next five years, even if the US had open access, we'd see next to nothing coming out of America." Watch ABC TV's Landline at 12:30pm on Sunday or on ABC iview.
