Most markets rise, euro boosted after EU strikes US trade deal
News of the deal, announced by Donald Trump and European Commission head Ursula von der Leyen on Sunday, followed US agreements last week, including with Japan, and comes ahead of a new round of China-US talks.
Investors were also gearing up for a busy week of data, central bank decisions and earnings from some of the world's biggest companies.
Trump and von der Leyen announced at his golf resort in Scotland that a baseline tariff of 15 per cent would be levied on EU exports to the United States.
"We've reached a deal. It's a good deal for everybody. This is probably the biggest deal ever reached in any capacity," Trump said, adding that the levies would apply across the board, including for Europe's crucial automobile sector, pharmaceuticals and semiconductors.
Brussels also agreed to purchase "US$750 billion worth of energy" from the United States, as well as make $600 billion in additional investments.
"It's a good deal," von der Leyen said. "It will bring stability. It will bring predictability. That's very important for our businesses on both sides of the Atlantic."
The news boosted the euro, which jumped to $1.1779 from Friday's close of $1.1749.
And equities built on their recent rally, fanned by relief that countries were reaching deals with Washington.
Hong Kong led winners, jumping around one percent, with Shanghai, Sydney, Seoul, Wellington, Taipei and Jakarta also up, along with European and US futures.
Tokyo fell for a second day, having soared about five per cent on Wednesday and Thursday in reaction to Japan's US deal. Singapore and Seoul were also lower.
The broad gains came after another record day for the S&P 500 and Nasdaq on Wall Street.
"The news flow from both the extension with China and the agreement with the EU is clearly market-friendly, and should put further upside potential into the euro... and should also put renewed upside into EU equities," said Chris Weston at Pepperstone.
Traders are gearing up for a packed week, with a delegation including US Treasury Secretary Scott Bessent holding fresh trade talks with a Chinese team headed by Vice Premier He Lifeng in Stockholm.
While both countries in April imposed tariffs on each other's products that reached triple-digit levels, US duties this year have temporarily been lowered to 30 per cent and China's countermeasures slashed to 10 per cent.
The 90-day truce, instituted after talks in Geneva in May, is set to expire on August 12.
Also on the agenda are earnings from tech titans Amazon, Apple, Meta Microsoft, as well as data on US economic growth and jobs.
The Federal Reserve's latest policy meeting is expected to conclude with officials standing pat on interest rates, though investors are keen to see what their views are on the outlook for the rest of the year in light of Trump's tariffs and recent trade deals.
The Bank of Japan is also forecast to hold off on any big moves on borrowing costs. - AFP
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Barnama
an hour ago
- Barnama
IATA Records 2.6 Pct Growth In Global Passenger Demand In June 2025
IATA Records 2.6 Pct Growth In Global Passenger Demand In June 2025 KUALA LUMPUR, July 31 (Bernama) -- The International Air Transport Association (IATA) recorded a 2.6 per cent increase in total global passenger demand for June 2025. Its director general Willie Walsh said in a statement today that it was a slower pace than what the company had seen in previous months and reflected disruptions around military conflict in the Middle East. 'With demand growth lagging the 3.4 per cent capacity expansion, load factors dipped 0.6 percentage points from their all-time record-high levels. 'At 84.5 per cent globally, however, load factors are still very strong. And with a modest 1.8 per cent capacity growth visible in August schedules, load factors over the northern summer are unlikely to stray far from their recent historic highs,' he said. On a regional breakdown of the international passenger markets, the aviation body said Asia-Pacific airlines achieved a 7.2 per cent year-on-year (y-o-y) increase in demand, with capacity rising by 7.5 per cent while the load factor stood at 82.9 per cent, slightly lower by 0.2 percentage points compared to June 2024. It noted that European carriers posted a 2.8 per cent y-o-y growth in demand, while capacity rose 3.3 per cent and load factor came in at 87.4 per cent. 'North American saw a decline of 0.3 per cent in demand, 2.2 per cent increase in capacity and load factor was 86.9 per cent. 'Meanwhile, Middle Eastern carriers recorded a 0.4 per cent fall in demand. Its capacity increased 1.1 per cent y-o-y while the load factor was 78.7 per cent,' it said. -- BERNAMA
The Star
3 hours ago
- The Star
US Senate committee backs $1 billion for Ukraine in Pentagon spending bill
U.S. Senator Mitch McConnell (R-KY) attends a Senate Appropriations Committee hearing on U.S. President Donald Trump's budget request for the Department of Defense, on Capitol Hill in Washington, D.C., U.S., June 11, 2025. REUTERS/Elizabeth Frantz/File Photo WASHINGTON (Reuters) -A powerful U.S. Senate committee approved a military spending bill on Thursday that includes about $1 billion to support Ukraine, despite President Donald Trump's administration having asked Congress to eliminate such funding in its budget request. The Senate Appropriations Committee approved $852 billion for the Department of Defense in the fiscal year ending on Sept. 30, 2026, which is $21.7 billion, or 2.6%, more than the Republican president requested earlier this year. The committee voted 26-3 to send the spending measure for a vote in the full Senate, with strong support from both Democrats and Trump's fellow Republicans. "Not only the prior administration, but this administration as well, have underestimated the level of challenge that we have," said Senator Mitch McConnell of Kentucky, who chairs the panel's defense subcommittee. The bill includes $800 million for the Ukraine Security Assistance Initiative (USAI), and $225 million for the Baltic Security Initiative, much of which ends up supporting Ukraine in its war against Russia's invasion. "I would say support for Ukraine is a billion dollars," Senator Chris Coons of Delaware, the defense spending subcommittee's top Democrat, told reporters ahead of the Appropriations Committee meeting. Trump's budget request, and the defense appropriations bill passed by the House of Representatives earlier this year, did not include any funding for the USAI, which funds security intelligence, training, equipment and supplies for Ukraine. However, many Republicans in Congress, particularly in the Senate, backed support for Ukraine even before Russia launched its full-scale invasion in early 2022. And Trump himself recently has grown more frustrated with Moscow's refusal to agree to a ceasefire. He has recently announced deadlines for Russia to show progress toward ending the war or face new sanctions - despite in the past speaking about having a good relationship with Putin. Both McConnell and Coons stressed that the U.S. is learning from Ukraine while supporting its military. "Shutting off engagement with Ukraine would undermine our military's efforts to prepare for the modern battlefield," McConnell said during the committee meeting. The war in Ukraine has evolved into the most-drone intensive conflict ever, and the use of drone technology has helped Ukraine to deal with Russia's advantages in troop numbers, artillery and tanks. To become law, the appropriations bill must pass the full Senate and then be reconciled with the House of Representatives bill, which adhered to the Trump administration's $831.5 billion Pentagon spending request and did not include Ukraine aid. After that, it would be sent to the White House for Trump to sign into law or veto. (Reporting by Patricia ZengerleEditing by Frances Kerry)
New Straits Times
4 hours ago
- New Straits Times
Trump's MAGA base defies conservative pro-Israel doctrine
UNCONDITIONAL support for Israel has long been an entry requirement in US Republican politics, but that orthodoxy is being challenged by Donald Trump's populist base — where invocations of the "special relationship" are falling on deaf ears. Images of starvation and suffering in Gaza have given new impetus to a debate that has been simmering in Trump's "MAGA" movement over whether US involvement in the Middle East is consistent with the president's "America First" platform. Trump's first significant break with Israel came on Monday, when he acknowledged that "real starvation" is happening in Gaza and vowed to set up food centres in the besieged enclave, which has been devastated by Israel's war with Hamas. Asked if he agreed with Prime Minister Benjamin Netanyahu's denials of the Gaza hunger crisis, Trump said: "Based on television, I would say not particularly, because those children look very hungry." It was a notable retort and prompted commentators to speculate that unwavering US support for Israel might end up as just another conservative sacred cow slayed by MAGA. Vice-President J.D. Vance went further at an event in Ohio, discussing "heartbreaking" images of "little kids who are clearly starving to death" and demanding that Israel let in more aid. Political scientist and former US diplomat Michael Montgomery thinks the tonal shift might in part be emotional — with TV images of starving children resonating more profoundly than the aftermath of air strikes. "Perhaps it is because no civilised people see starvation as a legitimate weapon of war," the University of Michigan-Dearborn professor said. Israel has always enjoyed broad bipartisan support in Congress but the rise of the isolationist MAGA movement under Trump has challenged the ideological foundations of the "special relationship." MAGA realpolitik seeks to limit US involvement in foreign wars to those that directly impact its interests, and in particular the "left behind" working class that makes up Trump's base. Pro-Trump think tank The Heritage Foundation in March called on Washington to "re-orient its relationship with Israel" from a special relationship "to an equal strategic partnership". Stronger expressions of disapproval have been subdued by a sense that they are a betrayal of Republican thinking, according to some analysts, especially after the Oct 7 Hamas attacks. But there is a new urgency in the debate in MAGA circles following dire warnings from leading NGOs and the UN World Food Programme's finding that a third of Gaza's population — of about two million — go for days without eating. One sign of the new thinking came in an X post from far-right firebrand congresswoman Marjorie Taylor Greene, who has pushed to cancel US$500 million in funding for Israel's rocket defence system. Greene this week went further than any Republican lawmaker has previously in using the word "genocide" to describe Israel's conduct and slamming the "starvation of innocent people and children in Gaza". While Greene's credibility has been undermined by an extensive record of conspiratorial social media posts, there is no denying that she knows what makes the MAGA crowd tick. A new CNN poll found the share of Republicans who believe Israel's actions have been fully justified has dropped from 68 per cent in 2023 to 52 per cent. Youth seems to be the driver, according to a Pew Research poll from April, when food shortages had yet to become a humanitarian catastrophe. While Republicans over age 50 haven't changed much in their pro-Israel outlook since 2022, the survey showed that the US ally's unfavourability among younger adults has climbed from 35 per cent to 50 per cent. "It seems that for the under-30-year-old MAGA base, Israel has almost no support," former White House strategist Steve Bannon told Politico, adding that Trump's rebuke would solidify his supporters' enmity. Democratic strategist Mike Nellis described the Gaza food emergency as "one of those rare moments where the crisis has broken through the usual partisan gridlock". "You're seeing people across the political spectrum who just can't stomach it anymore," he said.
