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AU Financial Review
4 days ago
- Business
- AU Financial Review
ASX to lift; US-China tensions, steel tariffs in focus
The Australian sharemarket will start the month on a positive note after US President Donald Trump indicated he would initiate talks with Chinese President Xi Jinping amid worsening trade tensions between Beijing and Washington. ASX futures are pointing up 0.1 per cent, or 8 points, to 8465, predicting the Index will extend gains in to a third session. The American president bounced back from a court ruling last week that tried to put a handbrake on his global trade war, launching a fresh attack on Beijing's trade agenda. Trump wrote in a social media post China had 'totally violated' the trade agreement reached between the two nations but later said he would speak to China's President Xi Jinping to settle differences. Still, US equities reversed most of the session's early gains and closed lower. 'The US administration has been vocal about using tariffs as a source of revenue to support fiscal expansion… an environment of elevated tariffs will continue to be an essential part of equity markets going forward,' Principal Asset Management market strategist Christian Floro said. Trump's announcement on Saturday that tariffs on foreign imports of steel would increase from 25 per cent to 50 per cent is also likely to unsettle investors before a US payroll report on Friday provides the latest indication of how US trade policy is impacting economic growth. Market highlights ASX futures are pointing up 0.1 per cent or 8 points to 8465. All US prices near 5pm Sunday New York time:
Bloomberg
29-05-2025
- Business
- Bloomberg
Positive Returns Possible, But Volatile: Shah
Seema Shah, chief global strategist at Principal Asset Management, discusses the market reaction after a US court blocked the bulk of President Donald Trump's import tariffs. "I don't think this is the end of the tariff story," she tells Bloomberg Television. Shah says she expects "an economic slowdown" but not a recession. "You can still get positive returns this year. It's just going to be something which is fairly volatile, very erratic, but it will be an upward-sloping move in the end." (Source: Bloomberg)
Business Times
16-05-2025
- Business
- Business Times
Chinese disinflation wave is set to boost emerging-market bonds
[ZURICH/SINGAPORE] A wave of Chinese exports redirected towards emerging markets is likely to help crimp inflation across the developing world and bolster longer-maturity bonds, fund managers say. Goods from the Asian nation are set to flow away from the US due to the higher tariffs imposed by US President Donald Trump, and be a force for disinflation elsewhere, according to Principal Asset Management, Banque Lombard Odier et Cie, and Barclays. Bonds in countries with a high ratio of Chinese imports will benefit the most, including Malaysia, Brazil and South Africa, Barclays says. 'There's a potential for disinflationary forces to be pushed out' to other countries due to the spare capacity in China, said Howe Chung Wan, head of Asian fixed income at Principal Asset in Singapore. 'We like duration' and favour sovereign bonds in local markets that are currency hedged, he said. Emerging-market local-currency bonds have rallied in the past month, with a Bloomberg index of the securities rising about 2 per cent, as Trump's tariff threats have weakened the US dollar and pushed down the price of oil. Downward pressure on inflation, coupled with appreciating currencies, are seen as giving central banks more room to cut interest rates, adding to the allure of longer-maturity debt. China's exports to the US slid 21 per cent in April from a year earlier after the imposition of higher tariffs earlier in the month, according to government data published last week. At the same time, firms the nation were able to increase sales to other markets to compensate, with total exports jumping 8.1 per cent during the period, far more than economists forecast. China and the US reached a trade truce this week, under which the combined 145 per cent US levies on most Chinese imports will be reduced to 30 per cent, while the Asian nation's 125 per cent duties on US goods will drop to 10 per cent. Still, the agreement will expire after just 90 days if no further deal is reached. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Cheap imports One of the main reasons to be positive on longer dated emerging-market bonds is the fact that China-driven disinflation will allow policymakers to lower interest rates, according to Guan Yi Low, a fixed-income portfolio manager at M&G in Singapore. 'Near term, we could be facing even more disinflation from the cheap Chinese imports,' she said. 'This frees up the ability of a lot of the Asian central banks to bring forward the policy cuts.' The weakness of the US dollar also means that policymakers will no longer have to worry about possible currency weakness if they lower interest rates, she said. The increase in cheap Chinese imports is not always viewed positively. The Bank of Thailand and Thai companies have warned about the impact of Chinese imports 'flooding' South-east Asia's markets and undercutting other producers. Some are still wary about buying emerging-market local-currency bonds, saying the relatively high US interest rates will limit flows into the securities. Lombard Odier's clients still prefer US dollar-denominated debt, said John Woods, chief investment officer for Asia in Hong Kong 'I'm not yet ready to call a substantial weakness in the US dollar,' he said. 'The interest-rate differential is still quite wide.' Others are more bullish. MFS Investment Management said it holds an overweight position on Asian debt due to its positive view on duration, or the sensitivity of a bond to changes in interest rates. 'Duration is mainly what we think is the most attractively valued right now because central banks will use the opportunity of US dollar weakness to cut more,' said Ward Brown, a portfolio manager at the Boston-based money manager. 'We have not had overweights in Asian duration for some time, but we have some now.' BLOOMBERG
Bloomberg
15-05-2025
- Business
- Bloomberg
Chinese Disinflation Wave Is Set to Boost Emerging-Market Bonds
A wave of Chinese exports redirected toward emerging markets is likely to help crimp inflation across the developing world and bolster longer-maturity bonds, fund managers say. Goods from the Asian nation are set to flow away from the US due to the higher tariffs imposed by President Donald Trump, and be a force for disinflation elsewhere, according to Principal Asset Management, Banque Lombard Odier et Cie, and Barclays Plc. Bonds in countries with a high ratio of Chinese imports will benefit the most, including Malaysia, Brazil and South Africa, Barclays says.
Yahoo
13-05-2025
- Business
- Yahoo
Inflation rose in April, reversing March decline
Inflation picked up speed in April after declining in March, according to data released Tuesday by the Labor Department. The consumer price index (CPI) rose 0.2 percent last month and is up 2.3 percent over the past year, according to the Labor Department. The annual inflation rate without volatile food or energy prices was 2.8 percent. Prices fell 0.1 percent in March, though the annual inflation rate was slightly higher at 2.4 percent. Economists expected price growth to pick up again amid deepening concerns about the impact of President Trump's trade agenda, though the April inflation report came in slightly below expectations. 'Today's CPI print suggests that the tariffs are yet to feed through to inflation. Yet, it is questionable whether or not today's CPI print really moves the needle after the rollercoaster ride of the past month,' wrote Seema Shah, chief global strategist at Principal Asset Management, in an analysis. A wide range of business and consumer surveys conducted through April showed increasing fears of inflation as Trump's steep import taxes were set to take effect later that month. Trump announced new tariffs on nearly all U.S. trading partners on April 2, with rates above 50 percent for some close allies. The president backtracked on that announcement days later amid a stock and bond market meltdown. Trump refocused his trade war on China, jacking up the import tax rate on Chinese goods as high as 145 percent while dropping his new tariffs on other foreign goods to a baseline rate of 10 percent. While Trump's tariff plans shook consumer confidence and raised concerns of higher prices, the whipsaw nature of his announcements and lags created by shipping times have yet to make a noticeable impact on inflation. 'The wide range of estimates coming into today's CPI report underscores the difficulty for market participants to size the significant uncertainty facing both corporations and consumers,' wrote Alexandra Wilson-Elizondo of Goldman Sachs Asset management in an analysis. 'The final CPI figure … is likely a welcome reprieve for the Fed,' she continued. 'However, the larger tariff-related price adjustments are likely to come over the next few months.' Updated at 9:06 a.m. EDT. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
