Stock markets, dollar rise on EU-US trade deal
The deal, announced by President Donald Trump and European Commission head Ursula von der Leyen on Sunday, followed several US trade agreements last week, including one with Japan, and comes ahead of a new round of China-US talks.
The Paris stock market climbed 0.6 percent and Frankfurt gained 0.3 percent in early afternoon deals, while London flattened.
Britain, which had already struck a deal on tariffs with the United States, is outside the EU. That agreement has helped push London's benchmark FTSE 100 index to record highs in recent weeks.
Trump and von der Leyen announced at his golf resort in Scotland that a baseline tariff of 15 percent would be levied on EU exports to the United States.
"To many this seems a very one-sided deal, but the optimism shows throughout European equities" with investors welcoming at least the "clarity" it brought, said Joshua Mahony, chief market analyst at Rostro trading group.
The levies would apply across the board, including for Europe's crucial automobile sector, pharmaceuticals and semiconductors.
"It's a good deal," von der Leyen said, adding that it will bring "stability" and "predictability".
Germany's main auto industry group, the VDA, warned however that the 15-percent tariff on EU exports "burdens" carmakers.
Shares in Volkswagen, Porsche and Mercedes were each down around one percent in Frankfurt.
As part of the deal, Trump said the 27-nation EU bloc had agreed to purchase "$750 billion worth of energy" from the United States, as well as make $600 billion in additional investments.
French Prime Minister Francois Bayrou and Hungarian Prime Minister Viktor Orban slammed the deal. Spanish Prime Minister Pedro Sanchez said he backed it, but "without any enthusiasm".
"There remains a prevailing sense that the agreement does not constitute a significant win," said Jochen Stanzl, Chief Market Analyst at CMC Markets.
"While it is positive that an escalation of tariffs has been avoided, the deal feels more like a compromise than a triumph," he added.
- US-China talks -
In Asia, Hong Kong and Shanghai advanced, boosted by relief that countries were reaching deals with Washington.
While Tokyo fell for a second day, having soared around five percent on Wednesday and Thursday in reaction to Japan's US deal.
The broad gains came after another record day on Friday for the S&P 500 and Nasdaq on Wall Street.
Traders prepared for a busy week with US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng holding new trade talks in Stockholm.
A 90-day truce, set to expire August 12, has seen US tariffs lowered to 30 percent and China's to 10 percent after both sides imposed triple-digit duties in April.
Also on the agenda are earnings from tech titans Amazon, Apple, Meta and Microsoft, as well as data on US economic growth and jobs.
The Federal Reserve is expected to keep interest rates unchanged at its meeting this week, with investors focused on its outlook for the rest of the year given Trump's tariffs and recent trade deals.
The Bank of Japan is also forecast to hold off on any big moves on borrowing costs.
- Key figures at around 1040 GMT -
London - FTSE 100: FLAT at 9,116.29 points
Paris - CAC 40: UP 0.6 percent at 7,879.15
Frankfurt - DAX: UP 0.3 percent at 24,285.13
Tokyo - Nikkei 225: DOWN 1.1 percent at 40,998.27 (close)
Hong Kong - Hang Seng Index: UP 0.7 percent at 25,562.13 (close)
Shanghai - Composite: UP 0.1 percent at 3,597.94 (close)
New York - Dow: UP 0.5 percent at 44,901.92 (close)
Dollar/yen: UP at 148.34 yen from 147.68 yen on Friday
Euro/dollar: DOWN at $1.1668 from $1.1738
Pound/dollar: DOWN at $1.3420 from $1.3431
Euro/pound: DOWN at 86.93 pence from 87.40 pence
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
News.com.au
32 minutes ago
- News.com.au
Ukraine says Russian strike on training camp kills 3 soldiers
A Russian strike on a military training camp killed at least three Ukrainian soldiers on Tuesday, following an overnight offensive in the south that killed a pregnant woman and a dozen prisoners. The Kremlin has come under intense pressure to end its war on Ukraine, now in its fourth year, with US President Donald Trump issuing a 10-day ultimatum to act or face sanctions. On social media, the Ukrainian army said a Russian missile hit one of the ground force's training units, without specifying the location. At least "three servicemen are dead and 18 wounded," it said Tuesday. Over the previous night, a series of Russian attacks killed at least 25 civilians, including a 23-year-old pregnant woman and more than a dozen inmates at the Bilenkiska penal colony in southern Zaporizhzhia region. Ukrainian President Volodymyr Zelensky accused Russia of deliberately targeting the prison, which the justice ministry said killed 17 people and wounded another 42. The Kremlin denied the claim, with spokesman Dmitry Peskov telling reporters, "the Russian army does not strike civilian targets". The attacks came hours after Trump said he was shortening the deadline for Russian President Vladimir Putin to halt the war from 50 days to 10-12 days. Hours later, Trump solidified the 10-day timeline, threatening "tariffs and stuff", while also conceding to not knowing if the measures would work. Peskov said Moscow had "taken note", and that it remained "committed to the peace process to resolve the conflict around Ukraine and secure our interests". - 'Prolonging the war' - The Ukrainian air force said Russia launched 37 drones and two missiles overnight into Tuesday, with 32 of the drones successfully downed. Zelensky also accused Russia of targeting a hospital in the town of Kamyanske in Dnipropetrovsk region, killing three people and wounding 22. Other Russian attacks killed six in the Kharkiv region, where the city of Kharkiv faced another attack at dawn on Wednesday. "Putin is rejecting a ceasefire, avoiding a leaders' meeting and prolonging the war," Ukrainian Foreign Minister Andriy Sybiga wrote on social media. "He will only end his terror if we break the spine of his economy," he added, calling on Western allies to impose sanctions. Kyiv has been trying to repel Russia's summer offensive, which has made fresh advances into areas largely spared since the start of the invasion in February 2022. The Russian defence ministry claimed advances across the front line on Tuesday, saying its forces had taken two more villages -- one in the Donetsk region, and another in Zaporizhzhia. Tuesday's prison strike fell on the third anniversary of an attack on the Olenivka detention centre in Russian-occupied Donetsk. Ukraine and Russia traded blame for that nighttime strike, which Kyiv said killed dozens of soldiers who had laid down arms after a long Russian siege of the port city of Mariupol.
Perth Now
37 minutes ago
- Perth Now
Asian stocks steady as investors brace for tariffs
Asian stocks have risen modestly with investors cautious after trade talks between the US and China ended without any substantive agreement and ahead of the Federal Reserve's policy announcement. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3 per cent, led by gains for Taiwanese stocks, after US stocks ended the previous session with mild losses as traders braced for a slew of corporate earnings. Australian shares were up 0.7 per cent, while Japan's Nikkei index slid 0.03 per cent and Hong Kong's Hang Seng skidded 0.4 per cent. The euro edged up from a one-month low, rising 0.2 per cent to $US1.1564, as markets weighed the EU's trade deal with the Trump administration. Traders are preparing for several central bank decisions, key economic reports and corporate earnings during the next few days, culminating in US President Donald Trump's August 1 tariff deadline. The Federal Reserve is expected to leave interest rates unchanged at its policy meeting later on Wednesday, though it could see a rare dissent by some central bank officials in favour of lower borrowing costs. "With labour market conditions near full employment, most Fed officials want to wait and see how tariffs impact inflation," said Tom Kenny, senior international economist at ANZ in Sydney. Some officials are concerned that tariffs could drive higher inflation expectations, leading to more persistent price pressures rather than a one-off hit, he said on a podcast. "Our expectation is that the Fed should be in a position to cut rates at the September meeting." US Treasury bonds advanced ahead of the Fed's meeting, pushing yields to the lowest in almost four weeks following a strong auction of seven-year notes that quelled concerns about diminishing demand for government debt. The yield on benchmark 10-year Treasury notes was last 4.328 per cent, the lowest level since July 3. The two-year yield, which rises with traders' expectations of higher Fed fund rates, was little changed at 3.873 per cent. The Bank of Japan is expected to hold steady on Thursday and the focus will be on its comments to gauge when the next rate increase will come after a trade deal between Japan and the US cleared the way for the BOJ to resume its rate-hike path. Ahead of Trump's deadline to reach a deal to avert imposition of the "Liberation Day" tariffs, some countries' talks with the US looked set to go down to the wire. US and Chinese officials agreed to seek an extension of their 90-day tariff truce on Tuesday, though no major breakthroughs were announced. US officials said it was up to President Trump to decide whether to extend a trade truce that expires on August 12 or potentially let tariffs shoot back up to triple-digit figures. India is also bracing for higher US tariffs - likely between 20 per cent and 25 per cent - on some exports as it holds off on fresh trade concessions ahead of the August 1 deadline, two Indian government sources said. Meanwhile, three South Korean cabinet-level officials met with US Commerce Secretary Howard Lutnick in a last-ditch push for a deal. Oil prices rose as potential supply shortages came into focus after Trump gave Moscow an abbreviated deadline toward ending the war in Ukraine. Brent crude futures rose 14 cents, or 0.19 per cent, to $US72.65 a barrel. US tech megacaps Microsoft and Meta are due to report earnings on Wednesday that will set the tone for the rest of the week and the earnings season. "It's been a solid US reporting season so far, but these megacap names need to run it hot and blow the lights out, given the bar to please has been sufficiently raised," said Chris Weston, head of research at Pepperstone. The Singapore dollar strengthened 0.2 per cent after Singapore's central bank kept its monetary policy settings unchanged on Wednesday following stronger-than-expected economic growth in the second quarter.
News.com.au
an hour ago
- News.com.au
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 centers 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 JD 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 civilized people see starvation as a legitimate weapon of war," the University of Michigan-Dearborn professor told AFP. 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. - 'Almost no support' - 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 October 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 Program'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 $500 million in funding for Israel's rocket defense 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 percent in 2023 to 52 percent. 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 unfavorability among younger adults has climbed from 35 percent to 50 percent. "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 told AFP.
