The big news from this week came from Vietnam, albeit, through an indirect fashion. The USA and Vietnam have struck a trade deal (unlike Japan) where the latter’s agreed to a 20% tariff; but, China-linked companies manufacturing in Vietnam?
Their goods will get a 40% tariff. Which has led many to suspect that Trump wants to put a 40% China on tariff, down from 55% (and far off 125%) – but that will still pose inflationary risk.
The tariff policy is, ultimately, stupid. Unless Trump wants to tank the USD to make manufacturing in America more affordable for international companies, which, if he just came out and said that, probably would be less confusing than the path he might be taking to get there. (Assuming he actually has a strategy.)
But US CPI will remain the key thing to focus on in the first quarter of FY26; a report from Reuters this week via DataWeave showed that the prices for thousands of Chinese made goods on Amazon are growing faster than the US CPI growth rate – suggesting a wall of economic pain could just be beginning.
That’s one to watch. Especially because the ASX200 gained +10% in FY25 (thanks largely to Commonwealth,) and now the question is, can we beat that in FY26? America’s overall economic health will determine that.
So too will that of China’s, when it comes to a hotly anticipated rotation from CBA back into materials (particularly BHP), a fairly common tidal flow on the ASX over long-term periods.
But with the future of iron ore prices looking more like US$90/tn than US$100+/tn, it’s unclear how big that rotation could be.
Elsewhere, and going back to tariffs, the EU looks like it might be willing to accept a 10% blanket tariff. Canada, meanwhile, was strong-armed into ditching a proposed tax on big tech companies, so, make of that what you will.
As ever, Australia’s stuck between the US and China.
In a way, really, not much has changed despite a very interesting H1CY2025.
Until next week!
Australian Equities
The ASX200 gained +10% through FY25
Some analysts are waiting for CBA to get scalped ahead of materials rotation
MTM Critical Metals to become Metallium Ltd
Tetratherix, the latest ASX-lister that debuted Monday, warmly embraced by market
Australian Economy
Aus resource export value to drop -$33B by 2027, from $385B to $352B
TCorp chief economist: RBA cash rate no longer the major inflation driver
Canberra to review the Australian gas market regulations, once again
International Economies
Analysts see key clue for China in US-VNM tariff trade deal
EU bloc reportedly ready to accept 10% US blanket tariff
US prices on Amazon are starting to rise faster than inflation: Reuters
Shell denies rumours it’s considering a takeover of BP
Capital Economics “remain cautious about the outlook” for China heading into FY26
AMP’s Chief Economist sees faltering USD as return to fair value
Commodities
Platinum quietly jumped nearly +30% in June as war triggered rotation safe haven kickoff
Morgan Stanley see Brent hitting US$60/bbl again by Q1 CY2026
Geopolitics
Trump strongarms Canada into slashing proposed tech giant tax
South Korea to seek extension to 90-day tariff pause from US as Trump shrugs off notion
Thailand Finance minister to visit US as Thai-Cambodia crisis boils in background
Odds & Ends
Japanese ghost investigators offering ‘ghost-free’ certs on misfortune homes
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