The trade: commodities react to US copper tariffs, while Bitcoin holds firm
In the wake of recent United States tariff announcements, the Australia 200 demonstrates notable resilience, while the broader implications for commodities such as copper and oil remain critical areas of focus.
(AI video summary)
This video was created on 9 July for IG audiences by ausbiz.
US market reactions and tariff impacts
United States (US) equity markets displayed relative indifference to the barrage of tariff announcements due to a history of extended deadlines and reduced levies. However, the introduction of a 50% tariff on copper imports under US President Donald Trump caused a surge of up to 17% in copper futures in New York.
So far, the overall equity markets remain below record highs but are experiencing a strong seasonal period, which might lead to gradual upward momentum.
Impact on Australian markets
Australia 200
Locally, the Australia 200 (ASX 200) remains resilient despite pressure on some companies with direct copper exposure, such as Sandfire Resources. Influential stocks like BHP and Rio Tinto have shown slight strength, helping support the Australia 200 despite the tariff-related headlines and pharmaceutical industry challenges.
The index is trading around 100 points below its record highs, which could be attributed to the Reserve Bank of Australia's (RBA) recent decision to postpone interest rate cuts.
Australian dollar
The Australian dollar initially reacted negatively to the RBA's unexpected pivot on rate cuts. The currency took the news positively in the longer term, as the central bank indicated waiting for confirmation from upcoming inflation data before proceeding with any rate changes. This leaves the Australian dollar trading within a certain range, needing to surpass 6590 to signal a more substantial upward move.
Gold and oil market trends
Gold is experiencing a downtrend, reflecting a weakening of safe-haven flows and expectations of eased tariff tensions. Current support levels are being tested, with risks to the downside if these levels do not hold.
Conversely, crude oil prices have rallied toward 70, with recent stronger-than-anticipated support levels and potential influences from Saudi activity in the Red Sea and perceptions of US production changes.
Bitcoin's resilience amid market fluctuations
Digital gold, Bitcoin, demonstrates resilience against tariff-related market volatility. Maintaining support above 107,500, Bitcoin consolidates well above this level. If it breaks past the 112,000 mark, it could potentially aim for a move toward 120,000.
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