Amid the broadly optimistic markets on early Tuesday, Financial Times (FT) came out with the news suggesting fresh Sino-American tussle.

As per the reports relying on anonymous sources, China is exploring whether it can hurt US defense contractors by limiting the export of rare earth minerals that are crucial for the manufacture of F-35 fighter jets and other sophisticated weaponry.

The report also mentions the government statistics from China that portray heavy demand for Beijing’s rare-earth metals, which consistently exceeded domestic supply over the past five years, prompting a surge of Chinese imports from miners in the US and Myanmar.

FX implications

As the news join the early-day release from Iraq, renewing fears of the US-Iran tension, AUD/USD extends pullback from the monthly peak while declining below 0.7800. However, S&P 500 Futures remain strong near the record top around 3,950.