India and the UK are leading the way in pushing for freer trading relationships as their leaders Narendra Modi and Keir Starmer successfully wrapped up three years of talks to bring down tariffs on a range of goods.
Meanwhile, US President Donald Trump’s tariff regime continued to weigh on Wall Street, with Ford Motor Co and toymaker Mattel among those grappling with the import levies’ impact on their respective bottom lines.
New Zealand’s Reserve Bank will release its six-monthly update on the health of the nation’s financial stability, and Statistics New Zealand’s quarterly employment report is expected to show a lift in the jobless rate.
And central banks remain top of mind for investors ahead of policy reviews from the Federal Reserve and Bank of England later this week.
Nudging lower
Stocks on Wall Street were broadly weaker, having snapped their nine-day winning streak. The S&P 500 and Nasdaq Composite were both down 0.5% at 7am in Auckland as tariffs continue to come to the fore.
“US equities have fallen for a second day, not helped by some companies downgrading earnings owing to the impact of tariffs and other companies choosing to suspend guidance, given extreme levels of uncertainty,” Bank of New Zealand senior markets strategist Jason Wong said in a note.
Ford suspended its earnings guidance as the carmaker grapples with the tariff regime, which it anticipates will knock its earnings despite the firm’s smaller exposure than some of its rivals, while toymaker Mattel is weighing up whether to hike prices and is accelerating moves to shift manufacturing from China.
And Palantir Technologies – a favourite among Sharesies users – sank 12% after reporting slower growth than investors had hoped.
US data showed the nation’s trade deficit grew to a record US$140.5 billion in March as firms stockpiled goods, particularly pharmaceuticals – the next sector in line for Trump’s tariff regime.
Trading friends
With trade top of mind and US deals expected to be announced later this week, the UK and India got in early with a free trade agreement reached after three years of negotiations, reducing tariffs between the nations over 10 years once it’s ratified.
Stock markets were softer in Europe, with the UK’s FTSE 100 index broadly flat while Germany’s DAX 30 slipped 0.4%.
Dairy prices rose at the latest Global Dairy Trade auction, with the GDT price index up 4.6%, with an average selling price of US$4,516 a tonne.
Meanwhile, the Fed’s policy review on Wednesday isn’t expected to deliver any movements in interest rates, while the Bank of England is predicted to lower its key rate again.
New Zealand’s Reserve Bank will release its six-monthly financial stability report today, with three of Australia’s big four banks reporting their first-half earnings this week. And Stats NZ’s household labour force survey is predicted to show a small increase in the unemployment rate.
The kiwi dollar rose to 60.07 US cents at 7am in Auckland from 59.81 cents yesterday, while Australian figures are pointing to a 0.2% decline for the S&P/ASX 200 index.
Reporting by Paul McBeth. Image from Erik Odiin on Unsplash.
