Asian Stocks, Euro Edge Up As Trump Buys Time For Talks: Markets Wrap

Asian shares posted modest gains as President Donald Trump left the door open for additional trade talks, providing a reprieve to markets after imposing new tariff rates on several countries.

Shares in Japan and South Korea - two countries that attracted higher tariffs Monday - gained while the broader Asian benchmark edged up 0.3%. The won strengthened, while a gauge of the dollar dipped 0.2%. The euro gained 0.3% on a report the US offered a deal to the European Union with a 10% tariff level. Equity-index futures for the US and Europe were flat.

Yields on Japan’s 30-year government bonds extended their advance. Australian yields rose after the central bank unexpectedly kept interest rates unchanged.

Late on Monday, Trump said he was still open to negotiations and pushed off increased duties until at least Aug. 1, easing concerns for markets. Stocks have recovered from their April plunge - when sweeping levies were first announced - fueled by expectations that the tariff deadline will be extended, based on Trump’s pattern of threatening first and backing down later.

“Investors are looking past the latest tariff announcements, seeing them as a tactic to accelerate negotiations, rather than the final word of where duties will ultimately land,” said Frederic Neumann, HSBC’s chief Asia economist.

On Monday, Trump released the first in a series of tariff warning letters, just two days before agreements are due on countries facing his April 2 so-called reciprocal levies. Few nations successfully negotiated deals in the short time given. In the interim, Trump announced framework agreements with the United Kingdom and Vietnam and a trade truce with China.

The European Union is seeking to conclude a preliminary trade deal with the US this week that would allow it to lock in a 10% tariff rate beyond an Aug. 1 deadline as they negotiate a permanent agreement. Politico reported the US offered a deal that would keep the 10% baseline levies, with exemptions for sensitive sectors.

Meanwhile, Indian officials familiar with the matter said the nation had made its best offer on trade and the fate of an interim deal now lies in the hands of Trump.

“Markets seem to have this level of crisis fatigue,” Fabiana Fedeli, CIO of multi asset & sustainability at M&G Investment Management, said on Bloomberg TV. “We have learned that we can have big risk events and actually nothing really happens in the end. And so investors continue to invest.”

So far, the US economy has held up under the threat of a spiraling global trade war. Hiring is healthy. The S&P 500 also hit a record high last week, ahead of the July 9 deadline imposed by Trump.

“The market had already priced in the possibility that there would be an extension and it seemed like there wasn’t much fear given how low the implied volatility was,” said Andrew Hiesinger, founder of Quant Data in New York. “It basically just tells me that the market is cautious, but I don’t see a lot of panic right now.”

Meanwhile, Japan got lower than average demand at its sale of five-year notes, turning the focus to the Ministry of Finance’s 20-year bond auction on Thursday as an upcoming upper house election fuels concerns about fiscal spending. 

Corporate News:

• Samsung Electronics Co.’s profit fell for the first time since 2023, hurt by US curbs on China-bound AI chips and hiccups in its plans to sell cutting-edge memory to Nvidia Corp.

• Apple Inc.’s top executive in charge of artificial intelligence models is leaving for Meta Platforms Inc., another setback in the iPhone maker’s struggling AI efforts.

• Jane Street Group LLC told its employees that India’s securities regulator made “many erroneous or unsupported assertions” about its trading activity in the country

Some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 6:52 a.m. London time

• Nasdaq 100 futures rose 0.2%

• The MSCI Asia Pacific Index rose 0.3%

• Japan’s Topix rose 0.2%

• Australia’s S&P/ASX 200 fell 0.2%

• Hong Kong’s Hang Seng rose 0.8%

• The Shanghai Composite rose 0.7%

• Euro Stoxx 50 futures were little changed

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%

• The euro rose 0.3% to $1.1740

• The Japanese yen was little changed at 146.01 per dollar

• The offshore yuan rose 0.1% to 7.1714 per dollar

• The British pound rose 0.2% to $1.3633

Cryptocurrencies

• Bitcoin rose 0.3% to $108,224.9

• Ether rose 0.7% to $2,551.16

Bonds

• The yield on 10-year Treasuries advanced one basis point to 4.39%

• Japan’s 10-year yield advanced three basis points to 1.485%

• Australia’s 10-year yield advanced nine basis points to 4.27%

Commodities

• Spot gold was little changed

• West Texas Intermediate crude fell 0.3% to $67.75 a barrel

• Spot gold was little changed