On Monday the S&P/ASX 200 index started the week in a positive fashion. The benchmark index rose 0.25% to 6,862.3 points.
Will the local market be able to build on this on Tuesday? Here are five things to watch:
ASX poised to sink lower.
The S&P/ASX 200 index looks set to sink lower on Tuesday. According to the latest SPI futures, the ASX 200 index is expected to fall 1.2% or 84 points at the open. This follows a selloff of share markets around the world after the global trade war escalated. In late trade on Wall Street the Dow Jones is down 0.7%, the S&P 500 is 0.6% lower, and the Nasdaq is down almost 1%.
Trade war escalates.
Markets around the world were sold off overnight after President Trump escalated the global trade war. President Trump said he will reinstate duties on steel and aluminium from Brazil and Argentina after accusing both countries of devaluing their currencies. Tech shares have performed particularly poorly, which could put pressure on shares such as Altium Limited (ASX: ALU) and WiseTech Global Ltd (ASX: WTC) today.
Oil prices rebound.
Australian energy producers such as Oil Search Ltd (ASX: OSH) and Woodside Petroleum Limited (ASX: WPL) could be on the rise today after oil prices rebounded. According to Bloomberg, the WTI crude oil price climbed 1.5% to US$56.02 a barrel and the Brent crude oil price is up 0.8% to US$60.98 a barrel.
Reserve Bank meeting.
All eyes will be on the Reserve Bank of Australia this afternoon when it meets to discuss the cash rate. According to the latest ASX 30 Day Interbank Cash Rate Futures, there is just an 11% probability of a rate cut to 0.5% today. However, by March there is a near 100% probability of a cut being priced in by the market.
Gold price higher.
Unfortunately for the likes of Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST), the spot gold price tumbled lower overnight despite the selloff of global share markets. According to CNBC, the spot gold price is down 0.3% to US$1,468.20 an ounce.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Altium and WiseTech Global. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.