Volatile markets and China election flashpoint

Good morning, it's Amy in Melbourne with your Tuesday newsletter. The ASX is set to open higher today, while the first leaders' debate of th

View in browser

Good morning, it's Amy in Melbourne with your Tuesday newsletter. The ASX is set to open higher today, while the first leaders' debate of the federal election campaign is scheduled for tonight. But first ... Today's must-reads: • Treasurer Chalmers reacts to market turmoil • Aware Super eyes cheap stocks  • China hits back at the major parties' Port of Darwin plans

What's happening now

We begin with the big story of the week so far: global markets. While the government is blaming "bad decisions" on tariffs for the turmoil, Treasurer Jim Chalmers' department is forecasting only minor impacts on domestic economic growth and inflation. While the local market is set to open higher this morning, the S&P/ASX 200 Index slumped as much as 6.5% yesterday, while the currency plunged. We have more on markets later in today's newsletter. Aware Super, meanwhile, senses an opportunity amid the chaos. Michael Winchester, Aware's head of investment strategy told me he's looking to buy cheaper stocks. In contrast, UniSuper's Chief Investment Officer John Pearce said it may be time to start pulling back from the US and has upgraded the probability of a recession. John Pearce, chief investment officer of UniSuper. Photographer: Carla Gottgens/Bloomberg New Zealand's central bank may be forced into deeper interest-rate cuts as the sweeping US tariffs and the prospect of a global trade war put the nation's economic recovery in jeopardy. The Reserve Bank was already expected to lower its Official Cash Rate by 25 basis points to 3.5% tomorrow. New Zealand also plans to boost defense spending to build a modern military amid rising tensions with China in the Pacific. China's Foreign Ministry has hit back at plans by both major Australian parties to end a lease on the Port of Darwin. A deal dating to 2015 held by a Chinese company called Landbridge Group has become an issue in the May 3 federal election. On the campaign trail, Opposition Leader Peter Dutton also backflipped on his working from home policy. "We got it wrong and we've apologized for it," Dutton told reporters.

What happened overnight

Here's what my colleague, market strategist Mike "Willo" Wilson says happened while we were sleeping… Another wild ride in stocks overnight that wasn't helped by Trump threatening to raise the stakes even higher with China, much less a false headline of hope. By the end of it, the Aussie and the kiwi recovered from the multi-year lows. That was after US indexes didn't capitulate like futures contracts during Asia on Monday and Trump reiterated that he was open to negotiations. Today, we will have a look at how Australian business and consumer confidence is faring while New Zealand awaits tomorrow's RBNZ decision. US lawmakers are investigating a claim made by a former Facebook employee that Chief Executive Officer Mark Zuckerberg lied to Congress about the company's efforts to launch its social network in China. The allegation was made by ex-Facebook staffer Sarah Wynn-Williams in her recently published memoir, Careless People.  India will restrict market access to BYD Co. but is courting investments from US rival Tesla. Commerce Minister Piyush Goyal told Bloomberg Television India must be cautious about its strategic interests and who it allows to invest, saying "as of now it is a no" to BYD. Did you know worldwide honey production has doubled since the 1990s? As Bloomberg Opinion's David Fickling writes, the rise of the honey bee has been a boon for agriculture, but not for the ecosystem. Photographer: NurPhoto/NurPhoto

What to watch

• 10:30 a.m. Westpac consumer confidence  • 11:30 a.m. NAB March business confidence • 7:30 p.m. Albanese and Dutton hold first debate on Sky

One more thing...

News of Trump's tariffs dropped like a hammer during the Watches and Wonders trade fair in Geneva, according to our reporter who was there. At the fair, 60 brands showcased their new wares to retailers, journalists and select elite clients. Despite the potential increases to their already eye wateringly high prices, the mood at the fair was enthusiastic. The watches certainly are beautiful. Have a great day.  The Parmigiani Fleurier Tonda PF Skeleton. Photographer: Chris Rovzar/Bloomberg

Follow Us

Like getting this newsletter? Subscribe to Bloomberg.com for unlimited access to trusted, data-driven journalism and subscriber-only insights. Want to sponsor this newsletter? Get in touch here. You received this message because you are subscribed to Bloomberg's Australia Briefing newsletter. If a friend forwarded you this message, sign up here to get it in your inbox. Unsubscribe Bloomberg.com Contact Us Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022