Wall Street Flat as ASX Braces for Tariff Fallout

Australia Wed: Lynas Rare Earths production update Thu: Labour force (Dec) International Mon: CN — Q4 GDP, industrial production, retail sales, fixed asset investment (Dec) EU — CPI (Dec) US — Market closed for Martin Luther King Jn Memorial Day Tue: US — New home sales (Dec) CN — 5-year prime loan rate Wed: US — Housing starts (Dec) US — Trump addresses World Economic Forum Thu: US — Personal spending (Nov) US — GDP Q# (final reading) Fri: JP — BoJ rates decision, CPI (Dec) EU — PMIs US — PCE inflation, Consumer spending, flash PMI Locally, the key data release of the week centres on jobs with labour force figures for December out on Friday. A solid 30,000 new jobs are forecast to have been created, but unemployment could edge up a notch to 4.4% due to a bounce back in the participation rate. Later today, China's National Bureau of Statistics will publish the Q4 GDP data. While growth is expected to have softened, it is still expected to hit the 5% full-year target. Also, in the region this week, central banks in Japan (Friday) and Indonesia (Wednesday) meet; neither is expected to shift their rate settings. The US data diary is a bit dry on the shortened week, but there are a few things worth looking at. The delayed PCE inflation reading for November should be published on Friday, but it is probably a bit too dated to have much impact. The US Supreme Court is expected to hear the first arguments over President Trump's attempt to remove Federal Reserve Governor Lisa Cook on Wednesday. Investors are also waiting for the court to decide on the legality of Trump's global tariffs, a ruling that could set off asset price volatility. Also on Wednesday, President Trump is expected to address/lecture the World Economic Forum in Davos. The US quarterly reporting season rolls on. Netflix (Tuesday), Proctor & Gamble (Thursday) and Intel (Thursday) are some of the big companies releasing results this week. Wall Street's Friday trading was largely uneventful as traders packed up and headed for the Hamptons, or wherever, ahead of the long weekend. The S & P 500, Dow and Nasdaq all closed marginally lower; -0.1%, -0.2% and -0.1 respectively. The exception was the small-cap Russell 2000, which gained another 0.1% to close at a new record high. US shares were an underperformer over the week, with S & P 500 down 0.4% against the gains of 0.5% in Europe and 3.8% in Japan. The ASX picked up 2.1% last week. Futures trading points to the ASX tracking sideways on opening, but trading closed on Saturday morning before US President Donald Trump wheeled out a new threat to hit anyone standing between him and Greenland with a fresh round of punitive tariffs. "Markets at this point are expected to reopen this week in 'risk-off' mode following President Trump's overnight threat to impose a 10% tariff on European allies starting February 1, escalating to 25% by June 1 unless the United States is permitted to purchase Greenland," IG market analyst Tony Sycamore said. "This development has raised fresh concerns about the potential unravelling of NATO alliances and the disruption of last year's trade agreements with several European nations, triggering selling in weekend markets in global equities (particularly European indices, down 1%) and driving safe haven buying of gold and silver." In very early trade this morning, the Euro was noticeably lower, down 0.2% against the Greenback. On Friday, US Treasuries edged higher, taking the US dollar with them. That saw the Aussie dollar slip back below 67 US cents. On commodity markets, Brent crude rose 0.6% to $64.13 a barrel as a US aircraft carrier group headed for the Gulf. But with no major news on Iran, and no tidal wave of oil from Venezuela yet, trading conditions were fairly calm. Gold edged down (-0.8%) on what was largely seen as traders shifting some profits off the table. Copper also slipped (-2.5%) to a one-week low, also due to profit-taking after a rally led by speculative funds, while demand from physical buyers in China was muted. Good morning and welcome to another day on the ABC markets and finance blog. Stephen Letts from ABC business team limbering up for a blow-by-blow coverage of the day's events, where every post is hopefully a winner, but none should be construed as financial advice. In short, it looks like the local market will start the day trading sideways from Friday. Futures trading closed just 1 point (0.01%) lower on Saturday morning, but that was before another salvo of tariff threats aimed at Europe was fired from the White House. A subdued risk-off day would not surprise. It's a big day for China watchers. The National Bureau of Statistics is set to churn out not only Q4 GDP numbers but the key December data for retail sales, industrial production and fixed asset investment, a proxy for construction spending. As always, the game's afoot, so let's get blogging. Loading