Daily Market Reports | Apr 09 2025
This story features XERO LIMITED, and other companies. For more info SHARE ANALYSIS: XRO
The rally was nice while it lasted, but escalating tariff threats on China ignited the risk-off selling and a key reversal in markets. With all the action in Asia and China, Australian futures are pointing to a heavy sell off at the open (yet again).
| World Overnight | |||
| SPI Overnight | 7391.00 | – 142.00 | – 1.89% |
| S&P ASX 200 | 7510.00 | + 166.70 | 2.27% |
| S&P500 | 4982.77 | – 79.48 | – 1.57% |
| Nasdaq Comp | 15267.91 | – 335.35 | – 2.15% |
| DJIA | 37645.59 | – 320.01 | – 0.84% |
| S&P500 VIX | 52.33 | + 5.35 | 11.39% |
| US 10-year yield | 4.26 | + 0.11 | 2.58% |
| USD Index | 102.78 | – 0.44 | – 0.43% |
| FTSE100 | 7910.53 | + 208.45 | 2.71% |
| DAX30 | 20280.26 | + 490.64 | 2.48% |
Good Morning,
Elevated tariffs on China from President Trump raised uncertainty and killed the recovery rally.
What happened overnight: Extract from NAB Markets Today
US equities opened strongly and were up just over 4% in the US morning, but that gain has since been more than retraced. The more positive risk environment evident early in the session was reflected in gains across Asian and European indices. Japan’s Nikkei up 6%. The Euro Stoxx50 was 2.5% higher, and the FTSE100 was up 2.7%.
Yesterday’s rise in 10yr US Treasury yields extended. The 10yr yield rose another 10bps to 4.29%, currently around the top of its daily trading range. The curve is notably steeper. 2yr yields were falling back alongside the retracement in equities even as 10yr yields pushed higher. The 2yr yield is -3bps lower at 3.73%.
Chicago Fed President Goolsbee said the tariffs are “way bigger” than anticipated and he outlined the need for policy makers to actively talk to businesses rather than waiting for the lagged hard data. San Francisco’s Daly said the Fed has the ability to “tread carefully and tread slowly”.
The US NFIB small business survey showed business confidence was already falling sharply ahead of Liberation Day, unwinding the optimism seen after Trump’s election. The release noted “the implementation of new policy priorities has heightened the level of uncertainty among small business owners over the past few months”.
In currency markets, the PBOC set a weaker CNY reference rate again but continues to tightly manage the rate of yuan depreciation.
There has been some spillover into the AUD, with the currency -0.4% lower and the underperformer among G10 currencies. The AUD pulled back from an intraday high near 0.6083 alongside the retracement in US equities and push higher in the CNH to be back near 0.5961.
Elsewhere, the USD was generally weaker, down -0.4% against the euro and pound, and losing more than -1% against the haven characteristics of the franc and yen.
Why is China so important? Extract from Stephen Innes, SPI Asset Management
The S&P 500 was up over 4% intraday, its biggest one-day jump since 2022, only to fade hard into the close. This is the kind of market where extremes get faded fast. Volatility is now the main show, and if you bought the Monday flush and sold near today’s highs, congrats, that’s a career month, and you might have even made your year if you did it in size.
But let’s not pretend this is a stable foundation. These rallies are still built on a house of cards. Tape is fragile, conviction is thin, and we’re always one tariff headline away from another flush.
Powell might be pretending he doesn’t need to get involved, but the market’s about to drag him in kicking and screaming. With volatility this high, something in the system always breaks, it’s just a matter of where.
The yuan is the real tell. China has started a slow-motion devaluation, and it’s no longer subtle. The PBOC fix broke 7.20 for the first time since Trump took office, a Maginot Line for the currency, now in the rear view.
We’re at 7.40 and counting, with 7.50 on every macro desk’s radar unless Beijing intervenes hard. And here’s the thing, they’re not selling dollars yet, but they’re also not stopping the bleed. That’s a message.
Why does it matter? Because China sits on US$60 trillion in deposits, three times the US, and if even a small slice of that heads for the exits, we’re not just talking about FX volatility. We’re talking capital flight, asset fire sales, and likely Asia, if not global contagion, the kind of stuff that hits hard.
Corporate news in Australia
-Xero ((XRO)) backs CEO pay package of $25m amid growing concerns over the company’s US expansion.
-Cochlear ((COH)) confirms its hearing implants will remain duty-free in the US.
-Zip Co ((ZIP)) announces $50m buyback.
-Woolworths Group ((WOW)) invests -$70m in Hola Health.
On the calendar today:
-NZ RBNZ rate decision
-US March FOMC minutes
-CLOVER CORPORATION LIMITED ((CLV)) ex-div 0.75c (100%)
-SCENTRE GROUP ((SCG)) AGM
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 2993.24 | + 4.97 | 0.17% |
| Silver (oz) | 29.68 | – 0.41 | – 1.35% |
| Copper (lb) | 4.10 | – 0.14 | – 3.30% |
| Aluminium (lb) | 1.05 | – 0.02 | – 1.68% |
| Nickel (lb) | 6.42 | – 0.04 | – 0.63% |
| Zinc (lb) | 1.15 | – 0.03 | – 2.70% |
| West Texas Crude | 60.04 | – 0.97 | – 1.59% |
| Brent Crude | 61.99 | – 2.27 | – 3.53% |
| Iron Ore (t) | 99.25 | – 1.60 | – 1.59% |
The Australian share market over the past thirty days
| Index | 08 Apr 2025 | Week To Date | Month To Date (Apr) | Quarter To Date (Apr-Jun) | Year To Date (2025) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 7510.00 | -2.06% | -4.25% | -4.25% | -7.96% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| ALD | Ampol | Downgrade to Neutral from Outperform | Macquarie |
| BGL | Bellevue Gold | Downgrade to Hold from Buy | Bell Potter |
| LYC | Lynas Rare Earths | Downgrade to Hold from Buy | Ord Minnett |
| MPL | Medibank Private | Downgrade to Accumulate from Buy | Ord Minnett |
| TEA | Tasmea | Upgrade to Buy High Risk from Hold High Risk | Shaw and Partners |
| TNE | TechnologyOne | Upgrade to Buy from Hold | Bell Potter |
| VEA | Viva Energy | Downgrade to Neutral from Outperform | Macquarie |
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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CHARTS
For more info SHARE ANALYSIS: CLV - CLOVER CORPORATION LIMITED
For more info SHARE ANALYSIS: COH - COCHLEAR LIMITED
For more info SHARE ANALYSIS: SCG - SCENTRE GROUP
For more info SHARE ANALYSIS: WOW - WOOLWORTHS GROUP LIMITED
For more info SHARE ANALYSIS: XRO - XERO LIMITED
For more info SHARE ANALYSIS: ZIP - ZIP CO LIMITED