A slump in oil prices, flat to negative share markets and a lower NZ dollar provide a sombre backdrop to trading in the Asia Pacific region today. Trade concerns are elevated after China enacted previously flagged tariffs. Investors will likely focus on company reports as the season gets into full swing.
The Reserve Bank of New Zealand maintained interest rates at current levels in a statement delivered this morning. However its estimate of the timing of a lift in rates was pushed back to 2020. The Kiwi dollar dropped on the news, and looks set to test two year lows against the US dollar. The fall is all the more remarkable given the overnight weakness of the US dollar against other currencies.
Oil prices tanked in US trading after China’s commerce ministry said tariffs on $16 billion worth of goods will take effect on August 23. Concerns may spread as the imposition of tariffs moves from threat to practice. With little sign of a compromise trade relations between the US and China remain the key threat to market health.
Reports so far this morning from AGL, Mirvac, Orora and Suncorp are broadly positive and above consensus estimates. This may see the Australia 200 index outperform the region and test the ten year highs around 6,300.
