US vs China trade war delayed; Oil surges
Bernard Hickey details the key news overnight in 90 seconds at 9am in association with the BNZ, including news that the United States has delayed its decision on whether to declare China a currency manipulator. This delays for a few months at least the prospect of a round of tit for tat trade sanctions between China and the United States. Many fear such a trade war would repeat the mistakes made in the 1930s when trade restrictions worsened the depression. Meanwhile, the price of oil rose to a 17 month high of US$86 a barrel after news that the world's biggest economy, the United States, is showing signs of growth. 162,000 jobs were created in March and the US services sector expanded at its fastest rate in 4 years. This is pushing up US long term bond yields as investors fear inflation and heavy government bond issuance. The US Treasury yield rose above 4% overnight to its highest level since last June. Rates are rising all around the world. The Reserve Bank of Australia makes a decision on its Official Cash Rate at 4.30 today. Economists are split on another rate hike.
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