AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Highlights
- ASX poised for a steady start despite global uncertainties.
- RBA expected to maintain current interest rate, with potential cuts in sight.
- Global markets respond to tariff announcements and recession forecasts.
As investors brace for a calm yet cautious trading day, the Australian Securities Exchange (ASX) is set for a steady opening, pending the Reserve Bank of Australia's (RBA) interest rate decision. With the cash rate likely to remain at 4.1%, markets are also closely watching developments in U.S. trade policies.
The ASX 200 futures indicated a positive start, up 0.9% at 7944 points, contrasting sharply with a 1.74% decline in the S&P/ASX 200 Index (ASX:XJO) on Monday, which concluded the month at 7,843 points. This marked a notable 4.03% decrease for March and a 3.87% drop for the quarter—the first back-to-back quarterly decline since 2022.
This downturn mirrors a significant sell-off on Wall Street, exacerbated by escalating tensions ahead of former U.S. President Donald Trump’s impending tariff announcements, dubbed "Liberation Day." The uncertainty is further fueled by hawkish comments from Trump regarding potential military actions and tariff implications on international relations.
Goldman Sachs (NYSE:GS) has adjusted its forecast for a U.S. recession upwards from 20% to 35%, suggesting a possible deeper impact on global markets. This recalibration reflects growing concerns about a severe economic downturn, despite markets currently pricing only a modest slowdown.
Tony Sycamore, an analyst from IG Markets, comments that while Australian and U.S. markets have accounted for some economic cooling, they are not fully bracing for a recession scenario. Such an outcome could lead to an additional 10% drop in stock values.
As for the RBA, it is anticipated to keep interest rates stable but may set the stage for a possible reduction in May, depending on the first-quarter inflation data set to be released at the end of April. The anticipation of rate cuts is already factored into market prices, with predictions leaning towards a 74 basis point reduction throughout 2025.
Globally, markets are tense as the U.S. prepares to impose new tariffs, including a significant 25% on automobiles starting April 3, and a reactivation of tariffs on goods compliant with the United States–Mexico–Canada Agreement. This move could lead to reciprocal tariffs and additional trade barriers, affecting sectors from pharmaceuticals to agriculture.
As these global dynamics unfold, the potential for increased market volatility and strategic shifts in international trade policies could significantly impact investment landscapes worldwide.
