The US has reached its first trade deal which has lifted market sentiment heading into the weekend.
The trade deal is with the UK and is the first since US President Donald Trump announced the worldwide tariff roll-out at the start of April.
ANZ Rates Strategist Jack Chambers says the baseline reciprocal tariff of 10% on UK goods is maintained, with the deal largely centred on relaxation for specific sectors, lowering non-tariff barriers and improved market access.
“The US will now enjoy increased market access for its products such as beef, ethanol, and other agricultural products,” Chambers says.
“In turn, the US has dropped tariffs on UK steel and aluminium to zero, and cut tariffs on cars to 10% (from over 27%), subject to a quota. Trump clarified that he intends to retain the 10% baseline tariffs on other countries as a minimum.”
There is also progress on a potential US-China trade deal, with Trump signalling optimism around negotiations and considering cutting tariffs on Chinese goods if talks this weekend go well.
The S&P/ASX200 followed US markets up this morning (9 May), with the index adding 11.7 points, or 0.14%, to reach 8,203.4 points by 10.30am (AEST).
The index is down 0.42% over the past five days but is little changed from where it was sitting at the start of the year.
Six of the 11 sectors gained ground. Energy was up 0.07% and industrials rose 0.04%.
Easing trade tensions also boosted sentiment across commodities, though materials was not among the early risers today, slipping 0.52%. Utilities, meanwhile, edged back 0.09%.
Gold also extended losses, which saw miners Vault Minerals (ASX:VAU) and West African Resources (ASX:WAF) among the losers in early trade. Vault slipped 3.61% to $0.47 and West African dropped 3.19% to $2.43.
The S&P/ASX200 is Australia’s leading share market index and contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market. The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation.
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
Images: ASX & Unsplash
