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Morning Research Notes - 04.02.25
US markets experienced a downturn despite President Donald Trump's temporary pause on tariffs with Mexico, highlighting the complex interplay between trade policies and economic stability. US markets experienced a downturn overnight, despite President Trump's last minute pause on tariffs with Mexico. Iron ore decreased by 1.2% to $US104.40 per tonne. Brent crude fell by 0.4% to $US75.40 a barrel, as spot gold rose by 0.6% to $US2,813.71 per ounce.
Wall Street closed lower on Monday, with the S&P 500 falling by 0.9%, amid mixed responses to President Donald Trump’s decision to temporarily pause tariffs on Mexico, which somewhat alleviated concerns over the economic impacts of a global trade war. The Dow Jones Industrial Average dropped by 161 points or 0.4%, and the Nasdaq Composite decreased by 1.3%. The tariff pause followed a "very friendly" call with Mexico, promising a month’s delay after Mexico agreed to deploy 10,000 troops to the U.S.-Mexico border, with ongoing discussions for a more permanent agreement. This move offered hope that Trump might use tariffs more as a negotiation tool rather than escalating into a full-blown trade conflict. Despite some recovery in trade-sensitive stocks, analysts at Capital Economics predict the tariffs will significantly increase U.S. inflation, potentially closing the window for further Federal Reserve rate cuts in the near to mid-term.
The Australian stock market closed lower on Monday, with the ASX 200 falling by 1.83%. Major sectors, including Materials, Financials, Info Tech and Utilities, ended the day in the red. Commodities also experienced a weak session, with Zinc, Nickel, Copper and Aluminium all closing lower, falling by 1.63%, 1.02%, 0.28% and 0.73%, respectively.
Chart of the day
Despite hopes of rate cut relief, many Australians will continue to struggle with high mortgage repayments and living expenses. According to Roy Morgan's data, 1,595,000 households are currently feeling pressure from their mortgage rates, and this number is expected to drop by only 53,000 households following an interest rate cut. Aaron Scott, co-founder of bRight Agent, emphasised that a small rate cut is unlikely to provide meaningful relief for most homeowners. The number of Australians 'At Risk' of mortgage stress has risen by 788,000 since May 2022.
Source: msn.com
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