New Middle East conflict sends jitters through market

Australia's share market has lost much of the week's gains, after Israel's attack on Iran proved a brutal reality check for risk sentiment.
The S&P/ASX200 fell 17.7 points, or 0.21 per cent, to 8,547.4, as the broader All Ordinaries gave up 25.4 points, or 0.29 per cent, to 8,770.6.
Wednesday's dual-record intraday peak and best-ever close for the top-200 became a distant memory as Israeli air strikes on Iranian military targets and nuclear facilities prompted retaliatory drone attacks.
The escalating conflict also weighed on markets in Asia, as Hong Kong's Hang Seng index, Japan's Nikkei and South Korea's KOSPI all fell between 0.8 per cent and one per cent.
Eight of 11 local sectors lost ground on Friday, while energy and utilities stocks surged after oil prices spiked to four-month highs in the wake of the attacks.
Brent Crude futures had since eased, but were trading at $US72.40 a barrel at 5pm.
The elevation of global risk came at an inopportune time for the ASX and its financial sector, both of which hit new highs this week and showed signs of being overbought, IG Markets analyst Tony Sycamore said.
"You wouldn't want to be going home long on risk (assets) ahead of this weekend, because there's just so much uncertainty out there," he told AAP.
Meanwhile, the oil price spike could stoke inflation, just as central banks were easing monetary policy after finally tempering post-pandemic price growth.
"In the worst-case scenario, then potentially we see crude oil spike up towards $US100 (a barrel) and that takes inflation significantly higher," Mr Sycamore said.
"That reduces the ability of central banks around the world to ease interest rates, because they're then fighting another re-acceleration in inflation."
Energy stocks and utilities both surged more than four per cent, and the defensive consumer discretionary sector was the only other division in the green, up 0.25 per cent.
The spike in crude prices was good news for Woodside investors, as the oil and gas giant rallied more than seven per cent to $25.21, the top-200's best performer.
Financial stocks, which account for roughly half of the top-200's value, fell 0.4 per cent as three of the big four banks - excepting a flat Westpac - grinded lower.
The sector is roughly flat for the week.
Materials stocks fell 0.2 per cent, as rallying gold miners helped soften a sell-off in large cap miners BHP (-2.6 per cent) and Rio Tinto (-1.1 per cent), tracking with an uplift in gold and continued weakness in iron ore prices.
Gold itself rose to its highest level since the beginning of May to trade at $US3,445 ($A5,320) an ounce, spiking to within roughly one per cent of its $US3,500 all-time high.
Australia's tech sector took the biggest hit on Friday, down 1.2 per cent as investors fled to safety.
The Australian dollar is buying 64.76 US cents, down from 64.96 US cents on Thursday at 5pm.
Next week, four major central banks will set their policy rates, and while investors expect no changes, they will be looking for any pivots towards dovish rhetoric in light of escalating conflict in the Middle East.
"Not rate cuts, but setting up the idea that things have now become more uncertain and there is now more risk to global growth because of what happened this morning," Mr Sycamore said.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Friday 17.7 points lower, or down 0.21 per cent, to 8,547.4
* The broader All Ordinaries lost 25.4 points, or 0.29 per cent, to 8,770.6
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 64.76 US cents, from 64.96 US cents on Thursday at 5pm
* 92.99 Japanese yen, from 93.39 Japanese yen
* 56.10 Euro cents, from 56.39 Euro cents
* 47.83 British pence, from 47.89 pence
* 107.67 NZ cents, from 107.80 NZ cents
Australia's share market has lost much of the week's gains, after Israel's attack on Iran proved a brutal reality check for risk sentiment.
The S&P/ASX200 fell 17.7 points, or 0.21 per cent, to 8,547.4, as the broader All Ordinaries gave up 25.4 points, or 0.29 per cent, to 8,770.6.
Wednesday's dual-record intraday peak and best-ever close for the top-200 became a distant memory as Israeli air strikes on Iranian military targets and nuclear facilities prompted retaliatory drone attacks.
The escalating conflict also weighed on markets in Asia, as Hong Kong's Hang Seng index, Japan's Nikkei and South Korea's KOSPI all fell between 0.8 per cent and one per cent.
Eight of 11 local sectors lost ground on Friday, while energy and utilities stocks surged after oil prices spiked to four-month highs in the wake of the attacks.
Brent Crude futures had since eased, but were trading at $US72.40 a barrel at 5pm.
The elevation of global risk came at an inopportune time for the ASX and its financial sector, both of which hit new highs this week and showed signs of being overbought, IG Markets analyst Tony Sycamore said.
"You wouldn't want to be going home long on risk (assets) ahead of this weekend, because there's just so much uncertainty out there," he told AAP.
Meanwhile, the oil price spike could stoke inflation, just as central banks were easing monetary policy after finally tempering post-pandemic price growth.
"In the worst-case scenario, then potentially we see crude oil spike up towards $US100 (a barrel) and that takes inflation significantly higher," Mr Sycamore said.
"That reduces the ability of central banks around the world to ease interest rates, because they're then fighting another re-acceleration in inflation."
Energy stocks and utilities both surged more than four per cent, and the defensive consumer discretionary sector was the only other division in the green, up 0.25 per cent.
The spike in crude prices was good news for Woodside investors, as the oil and gas giant rallied more than seven per cent to $25.21, the top-200's best performer.
Financial stocks, which account for roughly half of the top-200's value, fell 0.4 per cent as three of the big four banks - excepting a flat Westpac - grinded lower.
The sector is roughly flat for the week.
Materials stocks fell 0.2 per cent, as rallying gold miners helped soften a sell-off in large cap miners BHP (-2.6 per cent) and Rio Tinto (-1.1 per cent), tracking with an uplift in gold and continued weakness in iron ore prices.
Gold itself rose to its highest level since the beginning of May to trade at $US3,445 ($A5,320) an ounce, spiking to within roughly one per cent of its $US3,500 all-time high.
Australia's tech sector took the biggest hit on Friday, down 1.2 per cent as investors fled to safety.
The Australian dollar is buying 64.76 US cents, down from 64.96 US cents on Thursday at 5pm.
Next week, four major central banks will set their policy rates, and while investors expect no changes, they will be looking for any pivots towards dovish rhetoric in light of escalating conflict in the Middle East.
"Not rate cuts, but setting up the idea that things have now become more uncertain and there is now more risk to global growth because of what happened this morning," Mr Sycamore said.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Friday 17.7 points lower, or down 0.21 per cent, to 8,547.4
* The broader All Ordinaries lost 25.4 points, or 0.29 per cent, to 8,770.6
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 64.76 US cents, from 64.96 US cents on Thursday at 5pm
* 92.99 Japanese yen, from 93.39 Japanese yen
* 56.10 Euro cents, from 56.39 Euro cents
* 47.83 British pence, from 47.89 pence
* 107.67 NZ cents, from 107.80 NZ cents
Australia's share market has lost much of the week's gains, after Israel's attack on Iran proved a brutal reality check for risk sentiment.
The S&P/ASX200 fell 17.7 points, or 0.21 per cent, to 8,547.4, as the broader All Ordinaries gave up 25.4 points, or 0.29 per cent, to 8,770.6.
Wednesday's dual-record intraday peak and best-ever close for the top-200 became a distant memory as Israeli air strikes on Iranian military targets and nuclear facilities prompted retaliatory drone attacks.
The escalating conflict also weighed on markets in Asia, as Hong Kong's Hang Seng index, Japan's Nikkei and South Korea's KOSPI all fell between 0.8 per cent and one per cent.
Eight of 11 local sectors lost ground on Friday, while energy and utilities stocks surged after oil prices spiked to four-month highs in the wake of the attacks.
Brent Crude futures had since eased, but were trading at $US72.40 a barrel at 5pm.
The elevation of global risk came at an inopportune time for the ASX and its financial sector, both of which hit new highs this week and showed signs of being overbought, IG Markets analyst Tony Sycamore said.
"You wouldn't want to be going home long on risk (assets) ahead of this weekend, because there's just so much uncertainty out there," he told AAP.
Meanwhile, the oil price spike could stoke inflation, just as central banks were easing monetary policy after finally tempering post-pandemic price growth.
"In the worst-case scenario, then potentially we see crude oil spike up towards $US100 (a barrel) and that takes inflation significantly higher," Mr Sycamore said.
"That reduces the ability of central banks around the world to ease interest rates, because they're then fighting another re-acceleration in inflation."
Energy stocks and utilities both surged more than four per cent, and the defensive consumer discretionary sector was the only other division in the green, up 0.25 per cent.
The spike in crude prices was good news for Woodside investors, as the oil and gas giant rallied more than seven per cent to $25.21, the top-200's best performer.
Financial stocks, which account for roughly half of the top-200's value, fell 0.4 per cent as three of the big four banks - excepting a flat Westpac - grinded lower.
The sector is roughly flat for the week.
Materials stocks fell 0.2 per cent, as rallying gold miners helped soften a sell-off in large cap miners BHP (-2.6 per cent) and Rio Tinto (-1.1 per cent), tracking with an uplift in gold and continued weakness in iron ore prices.
Gold itself rose to its highest level since the beginning of May to trade at $US3,445 ($A5,320) an ounce, spiking to within roughly one per cent of its $US3,500 all-time high.
Australia's tech sector took the biggest hit on Friday, down 1.2 per cent as investors fled to safety.
The Australian dollar is buying 64.76 US cents, down from 64.96 US cents on Thursday at 5pm.
Next week, four major central banks will set their policy rates, and while investors expect no changes, they will be looking for any pivots towards dovish rhetoric in light of escalating conflict in the Middle East.
"Not rate cuts, but setting up the idea that things have now become more uncertain and there is now more risk to global growth because of what happened this morning," Mr Sycamore said.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Friday 17.7 points lower, or down 0.21 per cent, to 8,547.4
* The broader All Ordinaries lost 25.4 points, or 0.29 per cent, to 8,770.6
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 64.76 US cents, from 64.96 US cents on Thursday at 5pm
* 92.99 Japanese yen, from 93.39 Japanese yen
* 56.10 Euro cents, from 56.39 Euro cents
* 47.83 British pence, from 47.89 pence
* 107.67 NZ cents, from 107.80 NZ cents
Australia's share market has lost much of the week's gains, after Israel's attack on Iran proved a brutal reality check for risk sentiment.
The S&P/ASX200 fell 17.7 points, or 0.21 per cent, to 8,547.4, as the broader All Ordinaries gave up 25.4 points, or 0.29 per cent, to 8,770.6.
Wednesday's dual-record intraday peak and best-ever close for the top-200 became a distant memory as Israeli air strikes on Iranian military targets and nuclear facilities prompted retaliatory drone attacks.
The escalating conflict also weighed on markets in Asia, as Hong Kong's Hang Seng index, Japan's Nikkei and South Korea's KOSPI all fell between 0.8 per cent and one per cent.
Eight of 11 local sectors lost ground on Friday, while energy and utilities stocks surged after oil prices spiked to four-month highs in the wake of the attacks.
Brent Crude futures had since eased, but were trading at $US72.40 a barrel at 5pm.
The elevation of global risk came at an inopportune time for the ASX and its financial sector, both of which hit new highs this week and showed signs of being overbought, IG Markets analyst Tony Sycamore said.
"You wouldn't want to be going home long on risk (assets) ahead of this weekend, because there's just so much uncertainty out there," he told AAP.
Meanwhile, the oil price spike could stoke inflation, just as central banks were easing monetary policy after finally tempering post-pandemic price growth.
"In the worst-case scenario, then potentially we see crude oil spike up towards $US100 (a barrel) and that takes inflation significantly higher," Mr Sycamore said.
"That reduces the ability of central banks around the world to ease interest rates, because they're then fighting another re-acceleration in inflation."
Energy stocks and utilities both surged more than four per cent, and the defensive consumer discretionary sector was the only other division in the green, up 0.25 per cent.
The spike in crude prices was good news for Woodside investors, as the oil and gas giant rallied more than seven per cent to $25.21, the top-200's best performer.
Financial stocks, which account for roughly half of the top-200's value, fell 0.4 per cent as three of the big four banks - excepting a flat Westpac - grinded lower.
The sector is roughly flat for the week.
Materials stocks fell 0.2 per cent, as rallying gold miners helped soften a sell-off in large cap miners BHP (-2.6 per cent) and Rio Tinto (-1.1 per cent), tracking with an uplift in gold and continued weakness in iron ore prices.
Gold itself rose to its highest level since the beginning of May to trade at $US3,445 ($A5,320) an ounce, spiking to within roughly one per cent of its $US3,500 all-time high.
Australia's tech sector took the biggest hit on Friday, down 1.2 per cent as investors fled to safety.
The Australian dollar is buying 64.76 US cents, down from 64.96 US cents on Thursday at 5pm.
Next week, four major central banks will set their policy rates, and while investors expect no changes, they will be looking for any pivots towards dovish rhetoric in light of escalating conflict in the Middle East.
"Not rate cuts, but setting up the idea that things have now become more uncertain and there is now more risk to global growth because of what happened this morning," Mr Sycamore said.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Friday 17.7 points lower, or down 0.21 per cent, to 8,547.4
* The broader All Ordinaries lost 25.4 points, or 0.29 per cent, to 8,770.6
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 64.76 US cents, from 64.96 US cents on Thursday at 5pm
* 92.99 Japanese yen, from 93.39 Japanese yen
* 56.10 Euro cents, from 56.39 Euro cents
* 47.83 British pence, from 47.89 pence
* 107.67 NZ cents, from 107.80 NZ cents

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

The Advertiser

3 hours ago

• The Advertiser

EU-Aust free trade deal: a "middle finger to Trump"

There is appetite for the European Union and Australia to signal a "middle finger to Trump" by uniting on a long-awaited free trade deal but some in Brussels are tempering expectations of a quick turnaround. Trade talks kicked off in 2018 but Canberra walked away about 18 months ago over unsatisfactory market access for beef and lamb producers, and a reluctance to give up naming rights on products for geographical origin reasons, including feta, parmesan and prosecco. Fast forward to 2025 and US President Donald Trump's tariff antics have brought both parties back to the negotiating table. There was speculation of a quick conclusion with the Australian Financial Review reporting European Commission President Ursula von der Leyen had flagged a trip to Australia for late July or early August in anticipation of signing a deal. This echoed the fact she had also been quick to flag an agreement while offering Anthony Albanese her congratulations on becoming prime minister via Twitter in 2022. But multiple EU spokespeople have declined to confirm the travel, telling AAP a Down Under trip is "not on the radar". Despite acknowledging renewed political will, various sources in Brussels are cautioning patience. "There is no rush," according to one inside the EU Commission. "I wouldn't even say the end of the year, I would say more next year." Jacob Funk Kirkegaard, a senior fellow with Brussels think-tank Bruegel, estimates it could take at least another six months to resolve outstanding issues on agricultural tariffs and quotas. "The broad contour of the deal is already negotiated," he told AAP. "They know where the skeletons are buried. It takes a political grand bargain to do it." He noted that if the EU makes concessions, it would likely encounter an angry backlash from French and Polish farmers, who also opposed the EU's deal last year with Argentina, Brazil, Paraguay and Uruguay. However tractor and manure street protests wouldn't be enough to block a deal with Canberra, he said. Amid Washington's shift to extreme trade protectionism, an EU-Australian free trade deal would send a strong message to the Trump administration, Kirkegaard said. "As two of America's traditional allies, if both the EU and Australia find themselves subject to US tariffs, what better way than to do a deal with each other," he said. "So perhaps both countries feel this political signal is kind of a middle finger to Trump as well." Back in Melbourne, Sicilian-born cheesemaker Giorgio Linguanti from That's Amore Cheese faces an anxious wait to find out whether he can continue to market his wares using generic terms like parmesan or mozzarella. Yet he is open to compromise. "We should call it Australian parmesan and Australian feta because Australian milk is the best in the world," he said. Canberra and Brussels announced on Wednesday separate negotiations on a defence pact to boost defence industry, cyber-security and counter-terrorism co-operation. But it would not have military deployment obligations. There is appetite for the European Union and Australia to signal a "middle finger to Trump" by uniting on a long-awaited free trade deal but some in Brussels are tempering expectations of a quick turnaround. Trade talks kicked off in 2018 but Canberra walked away about 18 months ago over unsatisfactory market access for beef and lamb producers, and a reluctance to give up naming rights on products for geographical origin reasons, including feta, parmesan and prosecco. Fast forward to 2025 and US President Donald Trump's tariff antics have brought both parties back to the negotiating table. There was speculation of a quick conclusion with the Australian Financial Review reporting European Commission President Ursula von der Leyen had flagged a trip to Australia for late July or early August in anticipation of signing a deal. This echoed the fact she had also been quick to flag an agreement while offering Anthony Albanese her congratulations on becoming prime minister via Twitter in 2022. But multiple EU spokespeople have declined to confirm the travel, telling AAP a Down Under trip is "not on the radar". Despite acknowledging renewed political will, various sources in Brussels are cautioning patience. "There is no rush," according to one inside the EU Commission. "I wouldn't even say the end of the year, I would say more next year." Jacob Funk Kirkegaard, a senior fellow with Brussels think-tank Bruegel, estimates it could take at least another six months to resolve outstanding issues on agricultural tariffs and quotas. "The broad contour of the deal is already negotiated," he told AAP. "They know where the skeletons are buried. It takes a political grand bargain to do it." He noted that if the EU makes concessions, it would likely encounter an angry backlash from French and Polish farmers, who also opposed the EU's deal last year with Argentina, Brazil, Paraguay and Uruguay. However tractor and manure street protests wouldn't be enough to block a deal with Canberra, he said. Amid Washington's shift to extreme trade protectionism, an EU-Australian free trade deal would send a strong message to the Trump administration, Kirkegaard said. "As two of America's traditional allies, if both the EU and Australia find themselves subject to US tariffs, what better way than to do a deal with each other," he said. "So perhaps both countries feel this political signal is kind of a middle finger to Trump as well." Back in Melbourne, Sicilian-born cheesemaker Giorgio Linguanti from That's Amore Cheese faces an anxious wait to find out whether he can continue to market his wares using generic terms like parmesan or mozzarella. Yet he is open to compromise. "We should call it Australian parmesan and Australian feta because Australian milk is the best in the world," he said. Canberra and Brussels announced on Wednesday separate negotiations on a defence pact to boost defence industry, cyber-security and counter-terrorism co-operation. But it would not have military deployment obligations. There is appetite for the European Union and Australia to signal a "middle finger to Trump" by uniting on a long-awaited free trade deal but some in Brussels are tempering expectations of a quick turnaround. Trade talks kicked off in 2018 but Canberra walked away about 18 months ago over unsatisfactory market access for beef and lamb producers, and a reluctance to give up naming rights on products for geographical origin reasons, including feta, parmesan and prosecco. Fast forward to 2025 and US President Donald Trump's tariff antics have brought both parties back to the negotiating table. There was speculation of a quick conclusion with the Australian Financial Review reporting European Commission President Ursula von der Leyen had flagged a trip to Australia for late July or early August in anticipation of signing a deal. This echoed the fact she had also been quick to flag an agreement while offering Anthony Albanese her congratulations on becoming prime minister via Twitter in 2022. But multiple EU spokespeople have declined to confirm the travel, telling AAP a Down Under trip is "not on the radar". Despite acknowledging renewed political will, various sources in Brussels are cautioning patience. "There is no rush," according to one inside the EU Commission. "I wouldn't even say the end of the year, I would say more next year." Jacob Funk Kirkegaard, a senior fellow with Brussels think-tank Bruegel, estimates it could take at least another six months to resolve outstanding issues on agricultural tariffs and quotas. "The broad contour of the deal is already negotiated," he told AAP. "They know where the skeletons are buried. It takes a political grand bargain to do it." He noted that if the EU makes concessions, it would likely encounter an angry backlash from French and Polish farmers, who also opposed the EU's deal last year with Argentina, Brazil, Paraguay and Uruguay. However tractor and manure street protests wouldn't be enough to block a deal with Canberra, he said. Amid Washington's shift to extreme trade protectionism, an EU-Australian free trade deal would send a strong message to the Trump administration, Kirkegaard said. "As two of America's traditional allies, if both the EU and Australia find themselves subject to US tariffs, what better way than to do a deal with each other," he said. "So perhaps both countries feel this political signal is kind of a middle finger to Trump as well." Back in Melbourne, Sicilian-born cheesemaker Giorgio Linguanti from That's Amore Cheese faces an anxious wait to find out whether he can continue to market his wares using generic terms like parmesan or mozzarella. Yet he is open to compromise. "We should call it Australian parmesan and Australian feta because Australian milk is the best in the world," he said. Canberra and Brussels announced on Wednesday separate negotiations on a defence pact to boost defence industry, cyber-security and counter-terrorism co-operation. But it would not have military deployment obligations. There is appetite for the European Union and Australia to signal a "middle finger to Trump" by uniting on a long-awaited free trade deal but some in Brussels are tempering expectations of a quick turnaround. Trade talks kicked off in 2018 but Canberra walked away about 18 months ago over unsatisfactory market access for beef and lamb producers, and a reluctance to give up naming rights on products for geographical origin reasons, including feta, parmesan and prosecco. Fast forward to 2025 and US President Donald Trump's tariff antics have brought both parties back to the negotiating table. There was speculation of a quick conclusion with the Australian Financial Review reporting European Commission President Ursula von der Leyen had flagged a trip to Australia for late July or early August in anticipation of signing a deal. This echoed the fact she had also been quick to flag an agreement while offering Anthony Albanese her congratulations on becoming prime minister via Twitter in 2022. But multiple EU spokespeople have declined to confirm the travel, telling AAP a Down Under trip is "not on the radar". Despite acknowledging renewed political will, various sources in Brussels are cautioning patience. "There is no rush," according to one inside the EU Commission. "I wouldn't even say the end of the year, I would say more next year." Jacob Funk Kirkegaard, a senior fellow with Brussels think-tank Bruegel, estimates it could take at least another six months to resolve outstanding issues on agricultural tariffs and quotas. "The broad contour of the deal is already negotiated," he told AAP. "They know where the skeletons are buried. It takes a political grand bargain to do it." He noted that if the EU makes concessions, it would likely encounter an angry backlash from French and Polish farmers, who also opposed the EU's deal last year with Argentina, Brazil, Paraguay and Uruguay. However tractor and manure street protests wouldn't be enough to block a deal with Canberra, he said. Amid Washington's shift to extreme trade protectionism, an EU-Australian free trade deal would send a strong message to the Trump administration, Kirkegaard said. "As two of America's traditional allies, if both the EU and Australia find themselves subject to US tariffs, what better way than to do a deal with each other," he said. "So perhaps both countries feel this political signal is kind of a middle finger to Trump as well." Back in Melbourne, Sicilian-born cheesemaker Giorgio Linguanti from That's Amore Cheese faces an anxious wait to find out whether he can continue to market his wares using generic terms like parmesan or mozzarella. Yet he is open to compromise. "We should call it Australian parmesan and Australian feta because Australian milk is the best in the world," he said. Canberra and Brussels announced on Wednesday separate negotiations on a defence pact to boost defence industry, cyber-security and counter-terrorism co-operation. But it would not have military deployment obligations.

Perth Now

5 hours ago

• Perth Now

EU-Aust free trade deal: a "middle finger to Trump"

There is appetite for the European Union and Australia to signal a "middle finger to Trump" by uniting on a long-awaited free trade deal but some in Brussels are tempering expectations of a quick turnaround. Trade talks kicked off in 2018 but Canberra walked away about 18 months ago over unsatisfactory market access for beef and lamb producers, and a reluctance to give up naming rights on products for geographical origin reasons, including feta, parmesan and prosecco. Fast forward to 2025 and US President Donald Trump's tariff antics have brought both parties back to the negotiating table. There was speculation of a quick conclusion with the Australian Financial Review reporting European Commission President Ursula von der Leyen had flagged a trip to Australia for late July or early August in anticipation of signing a deal. This echoed the fact she had also been quick to flag an agreement while offering Anthony Albanese her congratulations on becoming prime minister via Twitter in 2022. But multiple EU spokespeople have declined to confirm the travel, telling AAP a Down Under trip is "not on the radar". Despite acknowledging renewed political will, various sources in Brussels are cautioning patience. "There is no rush," according to one inside the EU Commission. "I wouldn't even say the end of the year, I would say more next year." Jacob Funk Kirkegaard, a senior fellow with Brussels think-tank Bruegel, estimates it could take at least another six months to resolve outstanding issues on agricultural tariffs and quotas. "The broad contour of the deal is already negotiated," he told AAP. "They know where the skeletons are buried. It takes a political grand bargain to do it." He noted that if the EU makes concessions, it would likely encounter an angry backlash from French and Polish farmers, who also opposed the EU's deal last year with Argentina, Brazil, Paraguay and Uruguay. However tractor and manure street protests wouldn't be enough to block a deal with Canberra, he said. Amid Washington's shift to extreme trade protectionism, an EU-Australian free trade deal would send a strong message to the Trump administration, Kirkegaard said. "As two of America's traditional allies, if both the EU and Australia find themselves subject to US tariffs, what better way than to do a deal with each other," he said. "So perhaps both countries feel this political signal is kind of a middle finger to Trump as well." Back in Melbourne, Sicilian-born cheesemaker Giorgio Linguanti from That's Amore Cheese faces an anxious wait to find out whether he can continue to market his wares using generic terms like parmesan or mozzarella. Yet he is open to compromise. "We should call it Australian parmesan and Australian feta because Australian milk is the best in the world," he said. Canberra and Brussels announced on Wednesday separate negotiations on a defence pact to boost defence industry, cyber-security and counter-terrorism co-operation. But it would not have military deployment obligations.

AU Financial Review

8 hours ago

• AU Financial Review

AWU says Chalmers must put big conditions on $36b Santos takeover

The Australian Workers Union is demanding Labor force Santos' Abu Dhabi suitor to supply more gas to the domestic market and sell four processing plants before it is allowed to buy the country's second-largest oil and gas company in a transaction worth more than $36 billion. The influential union is a key supporter of Treasurer Jim Chalmers, who will decide whether a consortium led by the state-owned Abu Dhabi National Oil Company, known as ADNOC, can acquire the ASX-listed company.