Five Minutes to Midnight
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What new US tariffs on China take effect at midnight and why are they significant?
The introduction of the heftier tariffs, including the massive ones on China now, all kick off soon. Midnight in Washington, that's 2 p.m. in Sydney and Melbourne. Markets were optimistic earlier, but lost that spirit as the session progressed with equities well down again. But there are hopes that maybe a trade deal with someone will show that Trump is movable on his agenda. But that hasn't happened yet. And if senators want to try and block the tariffs, well, they can't really do too much. before Friday when they're off on their Easter holidays for two weeks. So big changes? Are they looking unlikely? So market's got further to go. It's Wednesday, it's the ninth of April 2025. It's the morning call from NAB.
Good morning. Well the US dollar is down naught point three percent today has been another day of up and down and up and down. It's well below one hundred and three now on the DXY. The Aussie is down naught point three percent, still below sixty US cents. The pound is up naught point four percent, the euro up naught point four percent, the Japanese yen is up one per cent, the Swiss franc up one point three percent. Stocks started the day a little optimistic, then but they came back down again, so the Nasdaq actually closed down two point two percent. Just now. The S P down one point six percent, down naught point eight percent for the Dow. But in Europe shares are racing ahead. So the Eurostocks fifty, the DAX and the CAT current all closed up two and a half percent.
The FTSE up two point seven percent. Uh bond yields are rising as well, up five basis points for ten year treasuries, up three in Canada. But we've got smaller moves in Europe, just two basis points higher for ten year bunds. Guilt yields are where they were yesterday. Aussie ten years up four. Fourteen basis points yesterday to four point two four percent. Now on futures, four basis points higher than that.
How are falling oil prices, like WTI and Brent, influencing markets after the tariff announcement?
And oil is lower again, down more than three percent for WTI. Brent is down three point six percent below sixty two now, WTI below fifty nine, and the lowest it's been since early twenty twenty one. So another volatile session uh and shares I was well, I was gonna say that at least they're not diving down as fast as they have been. But we saw quite a move towards the close. So what's next? And how do you protect yourself from the worst of it? Here's uh Nab Sally Old. It's pretty difficult really to know where to go now, isn't it?
Yeah, good morning, Phil. Yeah, it's very difficult. I mean I think, you know, whether you're running a firm or whether you're managing a portfolio, um, you know, at the moment the outlook is so uncertain that and any forecast uh, you know, that anyone makes has such wide error bands around it that yeah, it's it's inc increasingly difficult to make uh, you know, to have confidence in any decision you make. You know, most people who operate in in sort of the world or find financial markets are used to making decisions under uncertainty, but um I think we'd all agree that the l the level of uncertainty at the moment is uh you know quite unprecedented.
And that is reflected in the volatility that we saw today. So we had a bounce in equities uh early on in the United States. So is that optimism or short squeeze, whatever it was, um, it didn't last long because here we are again, you know, maybe some dip buying early on, uh a chance for more dip buying tomorrow perhaps, because uh the the the the market basically dived down again later on in the session and all that optimism disappeared.
Yeah, that's right. And and so I think, you know, markets after big corrections, you know, always sort of try to have these little rallies and and sometimes they can be, you know, reasonably significant because, you know, no one wants to miss out and everyone's sitting there thinking, Oh wow, if this really is the trough then I need to be correctly positioned for, you know, better outcomes. Um but I think, you know, in the world that we're in, uh, you know, one, we don't know the final hours. outcome um where we're going to settle on all of this.
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Chapters
8 chapters
1
What new US tariffs on China take effect at midnight and why are they significant?
0:01–1:38
2
How are falling oil prices, like WTI and Brent, influencing markets after the tariff announcement?
1:38–4:34
3
What market issues arise from the recent equity rally and subsequent sell‑off?
4:34–7:18
4
What does a 104% tariff on Chinese goods mean for world trade and the US‑China relationship?
7:18–10:29
5
Why is the global economy expected to slow as tariffs and uncertainty weigh on growth?
10:29–12:27
6
How is the Australian dollar reacting to the tariff shock and recent consumer confidence data?
12:27–14:57
7
What is the RBNZ’s likely response to the tariff shock and what rate move is expected?
14:57–17:40
8
What are the final takeaways and outlook from today’s Five Minutes to Midnight episode?
17:40–17:43