The Overnight Report: Liberation? Liquidation!

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Markets fell sharply on Trump tariffs and the ASX futures are pointing to ongoing selling pressure at the open, with SPI futures down over -1%.

World Overnight
SPI Overnight	7786.00	– 93.00	– 1.18%
S&P ASX 200	7859.70	– 74.80	– 0.94%
S&P500	5396.52	– 274.45	– 4.84%
Nasdaq Comp	16550.61	– 1050.44	– 5.97%
DJIA	40545.93	– 1679.39	– 3.98%
S&P500 VIX	30.02	+ 8.51	39.56%
US 10-year yield	4.06	– 0.14	– 3.36%
USD Index	101.91	– 1.32	– 1.28%
FTSE100	8474.74	– 133.74	– 1.55%
DAX30	21717.39	– 673.45	– 3.01%

Good morning,

Liberation day transcended into tariff turmoil day, rolling markets globally.

What happened overnight

As US futures indicated yesterday, it was going to be a rough day on Wall Street, and global stock markets have experienced a sharp selloff following President Donald Trump’s announcement of sweeping tariffs on nearly all U.S. trading partners.

The Dow Jones Industrial Average plunged more than -1600 points, the Nasdaq Composite slumped -6.0%, and the S&P500 fell -4.8%.

The US administration imposed 10% tariffs on global imports, effective April 5. Higher rates were imposed on specific countries, effective April 9, including a 34% tariff on top of the 20% tariff on imports from China. For Japan, Vietnam, and India face tariff rates of respectively 24%, 46%, and 26% apply. The EU is subject to a 20% rate.

The small-cap Russell2000 sank -6.6%, large-cap tech suffered outsized declines, and many discretionary-related industries fell under selling pressure.

Apple experienced its worst day in five years, falling -9.3%, and was a significant drag on the broader equity market, along with Nvidia, down -7.8%, and other semiconductor shares.

Fears of a US and global economic slowdown translated into lower oil prices on anticipation of weakening demand. WTI crude declined to US$67bbl, not helping the energy sector, which fell -7.5%. Energy was the worst performer, along with technology, down -6.9%, and consumer discretionary, falling by -6.5%.

The flight to safety saw Treasuries surge as stocks slid, resulting in markedly lower rates.

The 10-yr yield dropped -14 basis points to 4.06%, and the 2-yr yield dropped -18 basis points to 3.72%.

Earlier in Europe, 10-year German Bunds closed down -7bps at 2.64%, after trading to a low of 2.62%.

The market has moved to increased expectations for Fed rate cuts this year and is now pricing in -92bps of Fed easing by year-end versus -77bps previously and -25bps by mid-year, against -17bp priced yesterday.

US data releases overnight increased US growth concerns with the ISM services index falling by more than expected to 50.8, with notable decline of -7.7pt in the employment index to 46.2. The prices paid index fell -1.7pts to 60.9, against expectations of a small lift.

Data for the week ending 22 March showed US continuing jobless claims rising to over 1.9m, the highest level since 2021, and “we’re only in the first innings of the tariff shock”, NAB states.

Tariff impacts on commodity markets: Extract from ANZ, Australian Morning Focus

Commodity markets slumped, as the risks of a global trade war rose following Trump’s new tariffs.

Oil prices slumped further after OPEC proposed further increases in supply. Crude oil prices fell after the US announced reciprocal tariffs that were higher than the market expected. The average tariff rate is likely to be over 20% if these levies go into effect.

Energy, copper and gold are exempt from any additional levies, which were only expected to disrupt trade flows in the short term.

Commodity markets have been worried about the secondary impact on demand from weaker economic growth caused by broader tariffs. So, the announcements are unlikely to alleviate those concerns.

Risks of weaker global growth have risen significantly, particularly if impacted economies retaliate.

Trump warned he is prepared to respond with even higher tariffs if countries retaliate or reduced levies if concessions are made. This is likely to impact industrial activity, which will put commodity demand under pressure.

However, crude oil prices slumped further after OPEC stunned the market with a policy switch on oil supply. In a video conference amongst members of the OPEC-plus alliance, a coalition of producers led by Saudi Arabia announced they would increase supply by three times the planned amount in May.

Several delegates described the move as a deliberate effort to drive down prices to punish members who have been overproducing against their agreed quotas.

The group has started the long-delayed process of phasing out 2.2mb/d of voluntary production cuts it implemented last year, which would have seen output rise by 138kb/d every month from April. Kazakhstan has been a particular source of friction after it significantly exceeded its output ceiling during the startup of the expansion of its giant Tengiz oil field. Iraq and Russia have also been culprits.

Supply is now expected to rise by 4141kb/d in May. At this stage it appears to be a once-off increase, but the group reaffirmed its intention to make the overproducing countries compensate, in coming months.

Global gas markets were dragged lower by the selloff in crude oil, with European benchmark futures down nearly -5%. The reaction likely reflects expectations of greater supply due to relatively higher tariffs on Chinese exports, potentially diverting more LNG to Europe. Risks of weaker demand in China are also higher.

Gold struggled to keep its head above water, despite recent macro uncertainty driving investor demand for the haven asset. The move is likely due to traders looking to add liquidity as stock markets plunged.

However, the tariffs will provide a hit to growth and add to inflation, in the short term.

Financial markets have brought forward expectations of Fed easing following the announcement. This should see gold remain well supported.

Copper led the base metals lower amid the risk-off tone across markets. There are now fears that the new US tariffs will weaken demand for industrial commodities. This could rise if impacted countries retaliate with their own levies, ensuing a global trade war. China, now facing a tariff of 54% on its exports to the US, has already vowed countermeasures.

While metals were exempt from these latest tariffs, they face separate measures to help boost US supply. Aluminium already has a blanket 25% fee on all US imports, while a tariff on copper is expected within weeks.

Corporate news in Australia

-Singapore’s sovereign wealth fund, the GIC, is buying a 10% stake in Transgrid for $1bn.

-Galan Lithium ((GLN)) rejects a buyout worth $150m from Zhejiang Huayou Cobalt and Renault Group for its Argentine assets.

-Light & Wonder ((LNW)) is challenging Aristocrat Leisure’s ((ALL)) new legal claim over Dragon Train, which alleges trade secret misappropriation.

-Region Group ((RGN)) is planning a share buyback for $100m.

-PointsBet Holdings ((PBH)) is disputing BlueBet Holding’s ((BBT)) funding claims and competing takeover offer

On the calendar today:

-CH Public Hol

-US March Non Farm Payrolls

-ADRIATIC METALS PLC ((ADT)) Qtrly Report

-F.F.I. HOLDINGS LIMITED ((FFI)) ex-div 10c (100%)

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

Spot Metals,Minerals & Energy Futures
Gold (oz)	3130.81	– 34.10	– 1.08%
Silver (oz)	31.85	– 2.95	– 8.47%
Copper (lb)	4.81	– 0.29	– 5.71%
Aluminium (lb)	1.11	– 0.02	– 1.38%
Nickel (lb)	7.11	– 0.02	– 0.33%
Zinc (lb)	1.22	– 0.03	– 2.60%
West Texas Crude	66.76	– 5.43	– 7.52%
Brent Crude	69.94	– 5.37	– 7.13%
Iron Ore (t)	104.25	+ 0.01	0.01%

The Australian share market over the past thirty days

Index	03 Apr 2025	Week To Date	Month To Date (Apr)	Quarter To Date (Apr-Jun)	Year To Date (2025)
S&P ASX 200 (ex-div)	7859.70	-1.53%	0.21%	0.21%	-3.67%

BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS
AMP	AMP	Upgrade to Neutral from Sell	UBS
DLI	Delta Lithium	Downgrade to Hold from Accumulate	Ord Minnett
EMR	Emerald Resources	Upgrade to Lighten from Sell	Ord Minnett
GL1	Global Lithium Resources	Upgrade to Accumulate from Hold	Ord Minnett
IPL	Dyno Nobel	Upgrade to Buy from Accumulate	Ord Minnett
LTR	Liontown Resources	Downgrade to Lighten from Hold	Ord Minnett
MFG	Magellan Financial	Upgrade to Neutral from Sell	UBS
OPT	Opthea	Downgrade to Sell from Buy	Bell Potter
PDI	Predictive Discovery	Downgrade to Accumulate from Buy	Ord Minnett
PRU	Perseus Mining	Downgrade to Accumulate from Buy	Ord Minnett
TWE	Treasury Wine Estates	Downgrade to Neutral from Buy	Citi

For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.

All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available on the FNArena website.  Click here. (Subscribers can access prices on the website.)

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