President Trump agreed to a 15% tariff rate on most imported Japanese and European goods under trade deals announced with the counterparts. Japan agreed to approve US automotive standards that would aid US vehicle imports, agreed to increase US rice imports by 75%, agreed to purchase 100 Boeing aircraft and announced a pledge of US$550 billion into a “strategic industrial fund” aimed at bolstering key US industries via investment, loans and loan guarantees. The EU agreed to increased market access for certain American agricultural and fishery products, elimination of tariffs on most US industrial goods and made a pledge to purchase US $750 billion in energy products over the next three years. Amended US tariff rates (ranging from 10% to 41%) for most nations were published late in the month with August commencement.
A US “core” CPI print came in slightly below consensus with some noticeable tariff impacts and US GDP growth printed 3% annualised in the second quarter. US Federal Reserve Chairman Jerome Powell held the US Federal Funds rate steady at a target of between 4.25% and 4.5% despite significant public pressure from President Trump to cut interest rates and the RBA defied expectations for a rate cut, holding the official cash rate steady at 3.85%.
Australian shares gained 2.4% and A-REITs gained 3.4%. Global share markets returned 2.1% and currency-unhedged investors returned 3.1%, bolstered by the weaker AUD/USD. The Australian 10-year government bond yield rose by 0.10% to 4.26% and the US 10-year government bond yield rose 0.15% to 4.37% at month end.
Author: Allan Grant - Senior Portfolio Analyst
A US “core” CPI print came in slightly below consensus with some noticeable tariff impacts and US GDP growth printed 3% annualised in the second quarter. US Federal Reserve Chairman Jerome Powell held the US Federal Funds rate steady at a target of between 4.25% and 4.5% despite significant public pressure from President Trump to cut interest rates and the RBA defied expectations for a rate cut, holding the official cash rate steady at 3.85%.
Australian shares gained 2.4% and A-REITs gained 3.4%. Global share markets returned 2.1% and currency-unhedged investors returned 3.1%, bolstered by the weaker AUD/USD. The Australian 10-year government bond yield rose by 0.10% to 4.26% and the US 10-year government bond yield rose 0.15% to 4.37% at month end.
Author: Allan Grant - Senior Portfolio Analyst
Disclaimer:
The above is intended as general market commentary only and is not intended as, and does not constitute, advice of any kind. No liability is accepted for any action taken based on the above or for any loss suffered as a result of reliance on the same.
