Shares in Asia rally, dollar lower against yen
US shares rallied on Monday on generally positive earnings reports and increasing bets for a September rate cut from the Fed after disappointing jobs data on Friday.
Oil remained lower after output increases by OPEC+ and threats by US President Donald Trump to raise tariffs on India over its Russian petroleum purchases. Japan's Nikkei rallied, with data showing a jump in the nation's service sector activity in July.
"There are signs of weakness in parts of the US economy, that plays to the view that maybe not in September, but certainly this year that the Fed's still on course to ease potentially twice," said Rodrigo Catril, senior currency strategist at National Australia Bank.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.6 per cent in early trade. The Nikkei climbed 0.5 per cent after falling by the most in two months on Monday.
The dollar dropped 0.1 per cent to 146.96 yen. The euro was unchanged at $US1.1572 ($A1.7904), while the dollar index, which tracks the greenback against a basket of major peers, edged up 0.1 per cent after a two-day slide.
Odds for a September rate cut now stand at about 94 per cent, according to CME Fedwatch, from a 63 per cent chance seen on July 28. Market participants see at least two quarter-point cuts by the end of this year.
The disappointing nonfarm payrolls data on Friday added to the case for a cut by the Fed, and took on another layer of drama with Trump's decision to fire the head of labour statistics responsible for the figures.
News that Trump would get to fill a governorship position at the Fed early also added to worries about politicisation of interest rate policy.
Trump again threatened to raise tariffs on goods from India from the 25 per cent level announced last month, over its Russian oil purchases, while New Delhi called his attack "unjustified" and vowed to protect its economic interests.
Second-quarter US earnings season is winding down, but investors are still looking forward to reports this week from companies including Walt Disney and Caterpillar.
Tech heavyweights Nvidia, Alphabet and Meta surged overnight, and Palantir Technologies raised its revenue forecast for the second time this year on expectations of sustained demand for its artificial intelligence services.
"Company earnings announcements continue to spur market moves," Moomoo Australia market strategist Michael McCarthy said in a note.
In Japan, the S&P Global final services purchasing managers' index climbed to 53.6 in July from 51.7 in June, marking the strongest expansion since February.
Oil prices were little changed after three days of declines on mounting oversupply concerns, with the potential for more Russian supply disruptions providing support.
Brent crude futures were flat at $US68.76 ($A106.38) per barrel, while US crude futures dipped 0.02 per cent to $US66.28 ($A102.55) a barrel. Spot gold was slightly higher at $US3,381.4 ($A5,231.6) per ounce.
The pan-region Euro Stoxx 50 futures were up 0.2 per cent, while German DAX futures were up 0.3 per cent and FTSE futures rose 0.4 per cent. US stock futures, the S&P 500 e-minis , were up 0.2 per cent.
Bitcoin was little changed at $US114,866.06 ($A177,716.35) after a two-day rally.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Perth Now
an hour ago
- Perth Now
US trade deficit narrows amid drop in consumer imports
The US trade deficit narrowed in June on a sharp drop in consumer goods imports, the latest evidence of the imprint on global commerce that President Donald Trump is making with sweeping tariffs on imported goods. The overall trade gap narrowed 16.0 per cent in June to $US60.2 billion ($A93.1 billion), the Commerce Department's Bureau of Economic Analysis said on Tuesday. Days after reporting that the goods trade deficit tumbled 10.8 per cent to its lowest since September 2023, the government said the full deficit including services also was its narrowest since September 2023. Exports of goods and services totalled $US277.3 billion ($A429.0 billion), down from more than $US278 billion ($A430 billion) in May, while total imports were $US337.5 billion ($A522.1 billion), down from $US350.3 billion ($A541.9 billion). The diminished trade deficit contributed heavily to the rebound in US gross domestic product during the second quarter, reported last week, reversing a drag in the first quarter when imports had surged as consumers and businesses front-loaded purchases to beat the imposition of Trump's tariffs. The economy in the second quarter expanded at a 3.0 per cent annualised rate after contracting at a 0.5 per cent rate in the first three months of the year, but the headline figure masked underlying indications that activity was weakening. Last week, Trump, ahead of a self-imposed deadline of August 1, issued a barrage of notices informing scores of trading partners of higher import taxes set to be imposed on their goods exports to the US. With tariff rates ranging from 10 per cent to 41 per cent on imports to the US set to kick in on August 7, the Budget Lab at Yale now estimates the average overall US tariff rate has shot up to 18.3 per cent, the highest since 1934, from between two per cent and three per cent before Trump returned to the White House in January.
Perth Now
2 hours ago
- Perth Now
Zelenskiy chats with Trump ahead of Putin deadline
Ukrainian President Volodymyr Zelenskiy has had a "productive" conversation with his US counterpart Donald Trump about ending the war, sanctions on Russia and the finalisation of a US-Ukraine drone deal. Trump, who has signalled frustration with Vladimir Putin in recent weeks, has given the Russian president until Friday to make peace in Ukraine or face tougher sanctions. "President Trump is fully informed about Russian strikes on Kyiv and other cities and communities," Zelenskiy wrote on X, referring to intensifying drone and missile attacks. Trump has threatened to hit Russia with new sanctions and impose 100 per cent tariffs on countries that buy its oil, but sources close to the Kremlin told Reuters that Putin was unlikely to bow to the ultimatum. Putin retains the goal of capturing four regions of Ukraine in their entirety, sources close to the Kremlin told Reuters. His determination to keep going is prompted by his belief that Russia is winning and by scepticism that yet more US sanctions will have much of an impact after successive waves of economic penalties during 3.5 years of war, according to three sources familiar with discussions in the Kremlin. The Russian leader does not want to anger Trump, and he realises that he may be spurning a chance to improve relations with Washington and the West, but his war goals take precedence, two of the sources said. Putin's goal is to fully capture the Ukrainian regions of Donetsk, Luhansk, Zaporizhzhia and Kherson, which Russia has claimed as its own, and then to talk about a peace agreement, one of the sources said. "If Putin were able to fully occupy those four regions, which he has claimed for Russia, he could claim that his war in Ukraine had reached his objectives," said James Rodgers, author of the forthcoming book The Return of Russia. Zelenskiy said Ukraine was also ready to conclude a deal with the US on the purchase of Ukrainian drones that would amount to "one of the strongest agreements". He had earlier said the deal was worth around $US30 billion ($A46 billion). Ukraine is increasingly seeking financing and investment from its foreign partners to bolster its burgeoning domestic arms industry. Zelenskiy said Kyiv's European partners had so far pledged to buy more than $US1 billion ($A1.5 billion) in US weapons for Ukraine as part of a new scheme. Sweden, Norway and Denmark will contribute around $US500 million ($A774 million) the three countries said on Tuesday. Danish Defence Minister Troels Lund Poulsen said the money would be available immediately and that Denmark would be willing to consider additional funding later. "Speed is absolutely critical," he said in a statement.
News.com.au
3 hours ago
- News.com.au
European countries announce $1 bn purchase of US weapons for Ukraine
The Netherlands, Sweden, Norway and Denmark will buy $1 billion of US weapons under a new NATO scheme to support Ukraine in its war against Russia, the countries announced Tuesday. The purchases from US stockpiles are the first under the so-called Prioritised Ukraine Requirements List (PURL), a mechanism launched by US President Donald Trump and NATO Secretary General Mark Rutte last month. More are expected. The Dutch government said it would buy 500 million euros ($577 million) of weapons, and the three Scandinavian countries will jointly donate $500 million. All the governments highlighted the need to help Ukraine, which has faced mounting military pressure from Russia in recent months. "By supporting Ukraine with determination, we are increasing the pressure on Russia to negotiate," Dutch Defence Minister Ruben Brekelmans posted on X. Brekelmans called near-daily Russian air strikes "pure terror" and warned that Moscow's advance into Ukrainian territory could pose a broader threat to Europe. "The more Russia dominates Ukraine, the greater the danger to the Netherlands and our NATO allies," he said. "Ukraine is not only fighting for its own security, but also for our security," Swedish Defence Minister Pal Jonson told a press conference to announce the Scandinavian initiative. Sweden will give $275 million towards the total. The Dutch package includes US Patriot missile parts and other systems for Ukraine's badly stretched front-line requirements, according to the defence ministry. The Swedish government said in a statement that the "support will include air defence systems, including munitions to Patriot, anti-tank systems, ammunition and spare parts". Washington is releasing weapons and military hardware for Ukraine from its stockpiles in $500 million tranches under the PURL mechanism. Ukrainian President Volodymyr Zelensky hailed the donations as "a very strong initiative that significantly boosts our ability to protect lives". "These steps are a new, real foundation for long-term security across all of Europe. Russia will never turn Europe into a continent of war," Zelensky said on X. Zelensky spoke with Trump on Tuesday, three days ahead of a deadline the US leader has set for Russia to make an initiative to halt the war. He said in a social media post that the two had discussed sanctions against Russia and "bilateral defence cooperation" but did not give details. The NATO secretary general praised the Netherlands for being the first country to announce funding to the new scheme and also welcomed the Scandinavian move. "Since the earliest days of Russia's full-scale invasion, Denmark, Norway and Sweden have been steadfast in their support for Ukraine. I commend these allies for their quick efforts to get this initiative off the ground," Rutte said in a statement. jll/mmp/jc/tw/js
