Live: ASX cautious before RBA rates decision and end of tariff pause

Today was the deadline for Star to reach an agreement with its Queen’s Wharf joint venture partners over the purchase of the Brisbane development or have the deal collapse.

Now, the casino firm says it’s negotiated new terms with the Hong Kong investors, Chow Tai Fook Enterprises and Far East Consortium, which will allow negotiations to continue until a new termination date of July 31.

If a final deal isn’t reached (or “long form documents are not entered into”, as per the ASX statement jargon) by the end of this month, then Star must repay $10 million in proceeds it received from the investors, 30 days from today.

Star would also be liable for reimbursing $26.5 million in equity contributions its joint venture partners made to the Brisbane project since the end of march, due with 60 days from today.

Last Monday, Chow Tai Fook and Far East threatened to pull out of the deal to buy out Star’s stake in the Queen’s Wharf development, which would’ve posed a fresh financial threat to the casino operator, after it had secured a rescue deal from Bally’s.

Here’s where things stood before today’s extension:

Reporting by the ABC’s Indigenous Affairs Team

A new report has sought to quantify the social value of Indigenous-owned businesses in Australia, putting it at $42.6 billion a year.

Supply Nation, which maintains the national directory of verified Indigenous businesses, has used Social Return on Revenue (SRR) modelling to measure the sector’s social impact.

It finds 16 per cent of Indigenous people are directly connected to Indigenous businesses, whether as owners (29,200 people), their households (over 61,300 people) or their employees (over 65,700 people).

For every dollar of revenue, it says Indigenous businesses create $3.66 of social and economic value for Indigenous communities.

Awabakal woman and Supply Nation CEO Kate Russell says those benefits include increased financial security, physical health and mental wellbeing, improved family relationships and connections to culture.

“Indigenous businesses are closing the gap,” she told the ABC.

“Yes, it contributes significantly to the Indigenous entrepreneur themselves, to their families and their Indigenous [employees], but it’s also a really significant contributor to the broader Australian economy.”

Earlier this year, the Albanese government lifted its procurement target so that 3 per cent of government contracts will go to Indigenous-owned businesses, rising to 4 per cent by 2030.

The NZX 50 has opened 0.2% lower.

The big, diversified miner South 32 has agreed to sell its Cerro Mataoso nickel mine in Colombia for about $US100 million ($156 million).

The agreement to sell the mine to a subsidiary of the Netherlands-based CoreX  is to a degree based on price-linked considerations in the future.

South32 says the sale follows a strategic review into structural changes in the nickel market.

“The transaction is consistent with our strategy and will further streamline our portfolio toward higher margin businesses in minerals and metals critical to the world’s energy transition,” South 32 CEO Graham Kerr said in a statement to the ASX.

The Trump administration dispatched a number of key members of its economic team to the Sunday TV talk shows to talk trade — and it’s hard to say if it has cleared things up.

Treasury Secretary Scott Bessent says the US is close to securing several trade deals ahead of the July 9 deadline when higher tariffs are due to kick in.

Mr Bessent told CNN’s State of the Union program that President Donald Trump would also send out letters to 100 smaller countries with whom the US doesn’t have much trade, notifying them that they would face higher tariff rates first set on April 2 and then suspended until July 9.

“President Trump’s going to be sending letters to some of our trading partners saying that if you don’t move things along, then on August 1 you will boomerang back to your April 2 tariff level,” Mr Bessent said.

“So, I think we’re going to see a lot of deals very quickly.”

However, he denied that August 1 was a new deadline for negotiations.

“We are saying this is when it’s happening. If you want to speed things up, have at it. If you want to go back to the old rate, that’s your choice,” Mr Bessent said.

White House National Economic Council head Kevin Hassett was the next cab off the rank, fronting up on CBS’s Face the Nation program.

He seemed to indicate there was more flexibility than Mr Bessent suggested.

“There are deadlines, and there are things that are close, and so maybe things will push back past the deadline,” Mr Hassett said.

Finally, chairman of the White House Council of Economic Advisers, Stephen Miran, popped up on ABC News with some positive spin and talk of more wriggle room.

“I hear good things about the talks with Europe. I hear good things about the talks with India,” Mr Miran said.

“And so, I would expect that a number of countries that are in the process of making those concessions … might see their date rolled.”

Mr Bessent, however, appeared to be less conciliatory, noting there had been “a lot of foot-dragging” among countries in finalising trade deals.

He declined to name countries close to a trade agreement, “because I don’t want to let them off the hook”.

With Reuters

US trade partners will be checking their mailboxes for missives from the White House about what is expected from them if they are to avoid punitive tariffs for exports into the US.

There appear to be 10-to-12 nations the Trump administration is particularly keen to strike a deal with before the 90-day tariff moratorium expires on July 9.

“I signed some letters, and they’ll go out on Monday — probably 12,” Mr Trump said.

The demands, Mr Trump added, were for “different amounts of money, different amounts of tariffs and somewhat different statements”.

For the time being, the administration is being coy about who’s getting a letter — but all is expected to be revealed later today.

Mr Trump had earlier said “they’ll range in value from maybe 60 or 70% tariffs to 10 and 20% tariffs.”

Those tariffs, if imposed, will kick in on August 1.

“Our baseline expectation is that a 10% universal tariff rate will remain for all trading partners, and a higher level of tariffs is likely to continue in selected sectors,” the ANZ economics team said in a research note this morning.

“We expect that the deadline for reciprocal tariffs will be extended for major partners where trade negotiations are progressing, and the US Treasury Secretary went on to indicate as much on Sunday, talking of a three-week extension,” the ANZ team added.

As NAB’s Head of FX Research Ray Atwill has also been keeping tabs on talks over the weekend.

“Japan’s top negotiator Ryosei Akazawa reportedly had two 45-60 minute calls with US Commerce Secretary Lutnick last Thursday and Saturday described as an in depth exchange of views, while EU and US officials will reportedly keep negotiating through the weekend with the EU side reporting ‘progress towards an Agreement in Principal” which appear to centre on acceptance of a 10% baseline tariff rate without drawing EU retaliation but with carve outs or quotas in some sectors (autos, pharmaceuticals, alcohol, etc) potentially in return for EU commitments on more direct investment into the US,” Mr Atwill said.

“In the absence of any agreements or determination by the US that negotiations are continuing in good faith, the Japan tariff rate is due to revert to the 24% rate announced on April 2, and for EU imports to 20%, with sectoral tariff rates remaining in place at the higher rates of 25% on autos and 50% on steel and aluminium.”

Australia

Mon: Job ads (Jun)

Tue: RBA rates decision

Wed: RBA speeches Deputy and Assistant Governors

Thu: Spending indicator (Jun)

International

Tue: US — Small business confidence (Jun), Consumer credit (May)

Wed: NZ — RBNZ rates decision

             CN — CPI, PPI (May)

             US — FOMC minutes

Thu: US — Budget balance

Fri: UK — GDP

The RBA board hogs the stage locally this week with its two-day board meeting culminating with its interest rates decision on Tuesday at 2:30pm (AEST).

Inflation is now consistently in the RBA’s target band, and perhaps more importantly below the RBA’s forecasts, while economic growth and consumption is tepid, meaning a 25-bps rate cut is priced in as an almost certainty.

That would bring the official cash rate down to 3.6%

Neither a “no change” nor a 50bps cut figure much in the betting.

Offshore, there’s not much happening on the data front.

New Zealand’s central bank meets on Wednesday but is expected to take a breather after 225bps of cuts over the past year.

The Fed publishes the minutes of its last meeting (Wed) and is expected to point to rate cuts being pushed even further into the future.

The big item on the agenda though is the expiry of the deadline President Donald Trump set for countries to strike a trade deal with the US.

So far, there hasn’t been much in the way of signatures being scribbled by trade teams.

If that trend continues, the fallout may not be immediate and the can will be kicked further down the road to August 1 when the threatened punitive tariffs will be imposed, or then again, maybe not.

The ASX is priced for a flat opening with little guidance coming from Wall Street which was closed for US Independence Day festivities.

European markets traded on Friday and were generally softer, while the UK’s FTSE closed flat.

With little in the rear vision to fret about, investors will be looking at the road ahead which is far from straight forward with the 90-day pause on the “‘liberation day” tariffs set to expire on Wednesday.

The US deadline to its trading partners (and the penguins of the Heard and McDonald Islands) has yet to produce much in the way of meaningful action.

Will there be a flurry of deals signed before July 9? Maybe, maybe not.

And is it even a deadline, given the tariff hikes for any deal holdouts won’t kick in until August 1.

European markets didn’t seem overly confident of anything positive happening, with stocks across the region down around 0.8% on Friday.

Wall Street futures are somewhat glum too — the S&P 500 and Dow futures are down 0.6% for this evening’s session and the Nasdaq is down a tick more.

Commodities traded through the July 4 holiday with oil slipping 0.7% on expectations OPEC+ would announcing another output increase.

The cartel duly delivered a larger than expected supply increase of 548,000 barrels a day on Saturday, which is likely to weigh on oil prices when trading resumes this morning

Gold gained 0.3% largely thanks to a weaker US dollar and iron ore edged higher.

Good morning and welcome to another week on the ABC markets and finance blog.

Stephen Letts from ABC business team limbering up for a blow-by-blow coverage of the day’s events, where every post is hopefully a winner, but none should be construed as financial advice.

In short, it looks like a flat start to the week with little guidance coming from Wall Street which was closed for the July 4 holiday

However, the caution is understandable given Europe’s retreat on Friday ahead of the expected restart of US tariff increases this week when the 90-day pause expires.

As always, the game’s afoot, so let’s get blogging.

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