Markets Live: Mortgage Choice mauled

The ASX 200 has slumped 35 points or 0.6 per cent to 5990 with most sectors and stocks lower. The major banks are lower, although CBA is only pretty much flat while ANZ is off 0.6 per cent. The big miners BHP and Rio are both off by more than 1 per cent.

The jump in US tech stocks overnight has translated into solid support for ASX growth names, with WiseTech and A2 Milk among the best performers early.

Markets are naturally focused on global trade tensions that could disrupt order flow of steel and aluminum as US President Trump continues to stoke the fires of trade wars. China pushed back saying any progress made previously through negotiations could be undone by the pressure. Trade tensions are giving a short-term premium to base metals as aluminum has climbed higher for the third day on the LME. For oil, the biggest concern is the growing rumours that OPEC can no longer hold back production.

This past week the US re-ignited trade wars when its announced that it was moving ahead with the steel and aluminum tariffs it had initially floated in March against the European Union, Canada and Mexico. Since then, each of those countries directly in the line of the global leader's sites have announced their intentions to retaliate along and some have even given the specifics.

Over the weekend, the meeting of G-7 finance ministers and central bank heads rendered its own collective rebuke against US Treasury Secretary Steve Mnuchin. However, there wasn't an official statement to come from the six other members of the group to indicate their collective dissatisfaction. That will likely come from the leaders who are scheduled to meet this coming Friday and Saturday. The relatively sanguine bearing for the markets to start off this week gives off an air that this conundrum simply isn't important. More likely, it is just more complex than standard drivers of late, there is reticence to take a stance ahead of the Summit and there is perhaps lingering hope that this will be another situation whereby the US President suddenly reverses his position.

"I think the more unauthorised sharing that comes out, the more the FTC is going to be inclined to impose a significant civil penalty on Facebook," said David Vladeck, a former top official at the agency when it punished Facebook in 2011.

On the Hill, Senator Richard Blumenthal said the new reports showed that Facebook "has failed to come clean with the American people about the extent, the scope and the scale, of data sharing. The secret agreements raise serious credibility issues about recent testimony."

Take that Canada!

And then...

"Nothing is better for the issues about trade wars or issues about G-7 than a good economy," Omar Aguilar, chief investment officer for equities at Charles Schwab Investment Management, told Bloomberg overnight. "The jobs report on Friday gave a lot of people confidence that the US economy is still pretty solid."Nicholas Colas at DataTrek Research told the FT the most plausible reason for the lack of reaction by US stocks to trade war concerns was that markets believe there is no way President Trump would consciously hurt the US equity market or economy ahead of midterm elections.

"Almost like the concept of a 'Fed put', there is an implicit 'trade policy put' on current rhetoric, no matter how harsh," Mr Colas said. "If all the jawboning starts to hurt US business/consumer confidence or equity prices, markets expect President Trump to back away."

Attention may yet turn back to trade, however. G-7 leaders meet in Quebec later this week, with the European Union and Canada threatening retaliatory measures unless Trump reverses course on new steel and aluminum levies.

NAB's David deGaris warned against complacency following Trump's tweets:

"If the market needed one, it's another reminder that geopolitical tensions could easily re-appear at any time, not only from US-China and with media focus on the G7 leaders meeting this weekend. For now however, it's put to one side."

US stocks reached their highest since mid-March overnight after Microsoft agreed to buy coding site GitHub for $US7.5 billion. That helped push the Nasdaq Composite Index to a record high for the first time since March.

While stocks may start the day in negative territory, the Australian dollar has leapt more than 1 per cent higher overnight, pushing near a six-week high at US76.5¢.

"An easing in Italian political concerns, and a lift in global stockmarkets and base metal prices, along with Australia's good round of economic data released yesterday has given [the Aussie] a boost," CBA's Richard Grace said.

That upbeat data is not expected to be enough to shift the RBA from its firmly "on hold" stance when it meets today. In recent weeks a parade of economists have pushed back the timing of the first hike to next year.

"While we retain our 'glass half full' stance on the economy, the data flow has been insufficient to move the needle for the RBA, and a rate hike by year end is difficult to deliver," TD Securities said.

The probability of a rate hike before the end of the calendar year has been pared to just 5 per cent, according to TD; last week the firm pushed its forecast for a hike forward to May 2019. TD sees the opening for a second hike in November 2019, lifting the cash rate to 2 per cent.

As concerns about political crises eased in Europe, the yield on the US 10-year Treasury recouped 4 more basis points to reach 2.94 per cent.

Meanwhile, oil prices continued to fall as the markets weighed up recent signals from Saudi Arabia and Russia that production curbs could be eased.