Global shares experienced a downturn over the past week, driven by escalating fears of a trade war between the United States and Europe, sparked by President Trump’s pursuit of Greenland. Although markets rebounded after Trump eased his stance, the week concluded with losses across major indices. US shares fell by 0.4%, Eurozone shares declined by 1.1%, Japanese shares dropped by 0.2%, and Chinese shares decreased by 0.6%.
Reflecting the global economic uncertainty, Australian shares also experienced a fall of 0.5% for the week, a moderate decrease considering the 2.1% rise in the previous week. The domestic market’s decline was primarily led by financial, property, and consumer shares, which offset gains in the utility and resources sectors. Bond yields remained stable in the US but saw increases elsewhere, influenced by a rise in Japanese bond yields that reverberated globally.
Geopolitical risks surrounding Greenland, coupled with ongoing concerns about potential US military action against Iran, pushed gold and silver prices to near record highs. The Australian dollar surged higher as the US dollar weakened, and strong Australian jobs data fuelled expectations that the Reserve Bank of Australia (RBA) might increase interest rates. Market volatility stemmed from shifting geopolitical dynamics, including President Trump’s initial threats of tariffs against European countries unless Greenland was transferred to the US, followed by a subsequent retraction.
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