The Overnight Report: Tariffs Rattling Markets

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The company is included in ASX200, ASX300, ALL-ORDS and ALL-TECH

The Nasdaq bucked the sell off trend overnight but volatility continues overseas with tariff changes and mixed economic data sending a risk-off tone through markets.

The ASX is set to open lower again based on overnight futures.

World Overnight
SPI Overnight	8757.00	– 25.00	– 0.28%
S&P ASX 200	8831.40	– 12.30	– 0.14%
S&P500	6340.00	– 5.06	– 0.08%
Nasdaq Comp	21242.70	+ 73.27	0.35%
DJIA	43968.64	– 224.48	– 0.51%
S&P500 VIX	16.57	– 0.20	– 1.19%
US 10-year yield	4.24	+ 0.02	0.57%
USD Index	98.01	– 0.01	– 0.01%
FTSE100	9100.77	– 63.54	– 0.69%
DAX30	24192.50	+ 268.14	1.12%

Good Morning,

After reaching a new all-time high on Wednesday, the ASX200 retreated on Thursday and fell by -12pts or -0.14% to 8,831 led by selling in CSL and the broader healthcare sector. Consumer discretionary outperformed.

Overnight the Bank of England cut its rate by -25bps, as widely expected, with a  a hawkish voting split which lifted gilt yields and the GBP. 

In the US, Governor Waller has emerged as the favoured candidate for the next FOMC Chair among Trump’s advisors. While President Trump announced 100% tariffs on semiconductor chips, major companies and partners are likely to be exempt.

Commerce Secretary Lutnick said a 90-day extension is likely for negotiations with China.

Stephen Innes, SPI Asset Management

Investors rolled into Thursday still riding high, buzzed on the artificial sweetener of AI euphoria and juiced by patriotic pledges to reshore manufacturing. The rally wagon was grinding uphill, momentum strong, optimism thick in the air.

But by the closing bell, the music had stopped. Stocks slipped, Treasury auctions cracked, and oddly, the dollar caught a gust of fresh wind. The culprit? A one-two gut punch: Trump’s tariff wrecking ball and a Fed succession plot lifted straight from a political thriller.

Let’s start with the tariffs. President Trump’s self-imposed deadline passed like a thunderclap, triggering a swath of reciprocal levies against dozens of U.S. trade partners. For multinationals with global supply chains, this isn’t just a nuisance, it’s a wrecking ball. While U.S.-based tech manufacturers and chip firms that pledged allegiance to American soil get a carve-out, the rest face a punishing 100% tariff wall.

And just as markets were recalculating the knock-on effects—stagflation risk, imported inflation, supply chain snarls—the bigger blow landed in the bond pits.

Three U.S. Treasury auctions. Three tails. That’s not a coincidence; that’s a canary in the coal mine. The 30-year auction missed by 2 basis points, small in appearance, large in implication. The miss wasn’t about credit, it was about conviction. Investors are sending a clear message: the curve is pitched wrong, and it needs to move higher and steeper. The post-payroll bond bid has been erased, leaving duration exposed and the front end nervously eyeing the Fed.

Which brings us to the latest twist in the Fed chair saga. Bloomberg dropped the bomb that Christopher Waller—current Governor and recent rate cut voter, is now the odds-on favorite to replace Jerome Powell. Waller would bring academic credibility and market acumen, and, crucially, he’d look more independent than the other floated name: Kevin Hassett, who’s seen in many circles as a political puppet. Still, Waller’s dovish lean and proximity to Trump’s orbit raise eyebrows.

Investors are rightly skittish about a White House that’s not just leaning on the Fed, it’s practically trying to rewrite the hymn sheet. And when institutions lose perceived independence, markets don’t politely raise a hand, they bolt for the exits.

Meanwhile, across the Atlantic, the Bank of England cut rates by -25bps to 4%, but the drama was in the vote count. A rare 5–4 split forced a double vote—the first since the BoE gained independence in 1997. Global central banks are being dragged in opposite directions by the same crosswinds: softening growth and stubborn inflation. It’s the monetary policy’s ultimate no-win scenario.

This week, the ISM Services Prices Paid jumped again in July, flagging clear upside risk to headline inflation. But job growth is stalling, and unemployment is edging up. This isn’t just data noise, it’s the makings of a stagflation storm. The culprits? Tariffs, deportation-driven labour disruptions, and a sliding dollar. Pick your poison.

So the Fed now faces its own high-stakes binary: hike to contain inflation, or cut to cushion the slowdown. The market is still betting on cuts, but every inflation print tilts that bet into murky territory. Survey-based and market-based inflation expectations will be the battleground. The stakes? High.

In FX, the dollar caught a bid on two fronts: weak German industrial output, which dashed hopes for a European rebound, and the Waller-for-Chair narrative, which plays as both a potential pivot and a restoration of a familiar playbook. 

But here’s the kicker: even a more traditional Fed might not be enough to anchor the long end of the curve. That’s the message from the 30-year auction tail. The problem isn’t Fed credibility, it’s the duration’s lack of reward in a world staring down a regime of deficit-fueled supply and imported inflation.

The curve may have to steepen further and quickly. Unfortunately for stock market operators, higher back-end yields are a wrecking ball for valuations, pressing down on equity multiples and squeezing the air out of duration-heavy trades. When the long end starts to rise, it doesn’t just nudge, it rewrites the pricing script across the entire risk spectrum.

Big picture? We’re heading into a stretch where markets will punish certainty. The momentum winds are shapeshifters, what looks like a slam dunk on Monday can turn into a face plant by Friday. This isn’t a playground for conviction traders; it’s a minefield for anyone mistaking clarity for control.

Zooming out, Trump’s tariff grenades have triggered global reset tremors. Europe is sputtering. Asia is getting caught in the crossfire. And the U.S., of course, now looks increasingly vulnerable to a recession that’s globally synchronized.

So where do you hide when everything is melting—confidence, credibility, and capital?

Gold.

You know my view. I’m not trading it for the tick. I’m holding it for the tectonic shift. In a world where fiat is policy-dependent and everything else is somebody’s IOU, gold is the last neutral asset standing. It doesn’t yield, sure. But it doesn’t default, doesn’t get sanctioned, doesn’t need a central bank.

It just is.

And in markets like this, that’s worth more than any basis point you’ll find on a bond tail.

Commodites Overnight: Extract from ANZ Bank Australian Morning Focus

Copper edged higher following strong Chinese trade data. China’s commodity imports for July were resilient across sectors despite the ongoing US tariff tensions. Refined copper imports surged to 480kt, the highest this year. Robust industrial activity, grid expansion and ongoing energy transition supported imports. We see imports increasing following the US’s exemption of refined copper from the 50% tariffs. Copper concentrate shipments were also strong, reaching a three-month high as smelters increased purchases.

Copper also found support from renewed supply side issues. The suspension of Codelco’s El Teniente copper operation may not be lifted for months until a comprehensive review process is completed. This comes on the back of other unplanned disruptions, such as the suspension of operations at the Kamoa-Kakula underground mine.

As a share of overall production, unplanned supply disruptions have increased from just under 5% of world production in 2014 to 5.7% last year. This highlights the increasingly difficult operating conditions the copper industry is facing. Over the longer term this will constrain supply growth, creating ongoing tightness in the copper market. In the short term, we could see spot prices pick up as mine supply disruptions bite.

This will also put downward pressure on treatment charges. China’s demand for refined copper imports will likely grow.

Iron ore futures were steady despite signs of stronger supply. Major iron ore producer Brazil reported that exports of the steel-making raw material rose by 5% y/y to 41.11mt in July, a sign of growing seaborne flows to the market.

However, Chinese trade data showed its appetite remained strong. Iron ore imports hit 104.2mt in July, up 2% y/y and well above average monthly imports for the year. Healthy mill margins and low steel inventories motivated mills to restock. Iron ore port inventories continued to retreat, reaching 130mt. Monthly steel exports remained resilient at 9.8mt, tracking year-to-date growth of 11%.

Gold gained after Trump said he would instil Council of Economic Advisers’ Chair, Stephen Miran, to serve as a Federal Reserve governor. Miran would only serve the expiring term of Governor Ariana Kugler, which ends in January. Miran is the architect of Trump’s tariff policy, with the market viewing the appointment as a tilt to a more dovish monetary policy. The USD pushed higher following the nomination, helping lift the gold price 0.9%.

Crude oil fell amid the darkening economic outlook. Trump’s tariffs officially kicked in this week, raising concerns of weaker economic activity and thus demand for crude oil. The market is also on edge amid a proposed meeting between presidents Trump and Putin.

Trump has been pushing for a ceasefire with Ukraine, which has included threats of secondary tariffs on buyers of Russian oil. Earlier this week Trump announced India would be hit with an additional 25% tariff on Indian goods over its ongoing purchases of crude oil from Russia. However, the higher duty is not scheduled to come into effect for another 21 days, opening the door for possible negotiations.

Global gas prices were steady amid signs of strong demand. Sweltering temperatures in Japan could boost the nation’s LNG purchases in coming weeks as power generation surges due to higher electricity demand. This should provide some support to North Asian LNG prices.

Corporate news in Australia

-Blackstone is in talks to buyout Iress ((IRE)) for around $10 per share with a total value around $1.9bn.

-Dutch pension behemoth APG Asset Management has submitted a bid for Adu Dhabi Investment Authority’s 19.99% stake in Transgrid, NSW’s $10bn electricity transmissions company.

-Santos ((STO)) has extended the due diligence for Adnoc-Carlyle’s $30bn bid.

-ASX Ltd ((ASX)) is up for -$35m in additional FY26 costs arising from the ASX probe.

-Santana Minerals ((SMI)) has launched a $61m equity raising and Federation Mining may list on the ASX and is mooted as a possible buyer of Santana.

-Silex Systems ((SLX)) has raised $130m to fund its US uranium tech rollout through Global Laser Enrichment.

-Rio Tinto ((RIO)) has given the go ahead to its $277m Norman Creek bauxite project with production starting in 2027.

On the calendar today:

-JP June BoP Balance

-CH 2Q BoP CA Balance

-NICK SCALI LIMITED ((NCK)) earnings report

-QBE INSURANCE GROUP LIMITED ((QBE)) earnings report

-BLOCK INC ((XYZ)) earnings report

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

Spot Metals,Minerals & Energy Futures
Gold (oz)	3472.87	+ 102.87	3.05%
Silver (oz)	38.50	+ 0.57	1.49%
Copper (lb)	4.42	+ 0.00	0.06%
Aluminium (lb)	1.18	– 0.01	– 0.59%
Nickel (lb)	6.78	– 0.00	– 0.03%
Zinc (lb)	1.28	+ 0.01	0.76%
West Texas Crude	63.78	– 0.51	– 0.79%
Brent Crude	66.33	– 0.51	– 0.76%
Iron Ore (t)	101.21	+ 0.29	0.29%

The Australian share market over the past thirty days…

Index	07 Aug 2025	Week To Date	Month To Date (Aug)	Quarter To Date (Jul-Sep)	Year To Date (2025)
S&P ASX 200 (ex-div)	8831.40	1.96%	1.01%	3.38%	8.24%

BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS
AZJ	Aurizon Holdings	Downgrade to Neutral from Outperform	Macquarie
BWP	BWP Trust	Upgrade to Buy from Neutral	Citi
BXB	Brambles	Downgrade to Neutral from Buy	UBS
EOS	Electro Optic Systems	Upgrade to Buy from Accumulate	Ord Minnett
IFM	Infomedia	Downgrade to Hold from Buy	Bell Potter
NIC	Nickel Industries	Downgrade to Neutral High Risk from Buy HighRisk	Citi
NWS	News Corp	Downgrade to Neutral from Outperform	Macquarie
PNI	Pinnacle Investment Management	Downgrade to Accumulate from Buy	Morgans
SUL	Super Retail	Downgrade to Hold from Accumulate	Morgans

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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