Europe: Shares advance as markets take US jobs data in stride
The pan-European Stoxx 600 index closed 0.47 per cent higher at 543.76, in tandem with a 0.9 per cent rise in the US S&P 500. Germany's DAX advanced 0.6 per cent, while France's CAC 40 added 0.2 per cent.
US job growth was unexpectedly solid in June, with the nonfarm payrolls reading shooting above market estimates for the month.
'Today's good news should be treated as such by the markets, with equities rising despite the accompanying pickup in interest rates,' said Jeff Schulze, head of economic and market strategy at ClearBridge Investments.
US interest rate futures show traders betting on a September start to Federal Reserve rate cuts and a total of just two quarter-point reductions by yearend, not the three rate cuts that they had favoured prior to the data.
Banks were the biggest boost to the Stoxx 600, with British lenders Natwest and Lloyds leading the charge at a more than 3 per cent rise each.
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British stocks, bonds and the pound stabilised after losses on Wednesday as Prime Minister Keir Starmer's office rushed to give finance minister Rachel Reeves his full backing after she appeared in tears in parliament.
UK midcaps climbed 1.2 per cent, while the internationally-focused blue-chip index added 0.6 per cent.
Also giving a leg up to global markets was the announcement of a deal between the United States and Vietnam ahead of next week's deadline set by President Donald Trump for new US trade tariffs worldwide.
European Commission President Ursula von der Leyen said the European Union was aiming first for a trade agreement in principle with the United States before the deadline.
The US also lifted export restrictions on Chinese-bound shipments from chip design software developers and ethane producers.
German engineering company Siemens AG closed 0.8 per cent higher after jumping as much as 3 per cent in response to easing US-China trade tensions.
Republicans in the US House of Representatives advanced Trump's massive tax-cut and spending bill toward a final yes-or-no vote on Thursday.
Shares of some European renewable energy companies extended gains from the previous session, with Vestas up close to 7 per cent. The final version of the US bill is seen as more positive for wind power than an earlier version.
Accounts of the European Central Bank's last policy meeting showed ECB policymakers had cut rates to prevent an unwarranted tightening of monetary conditions in the face of elevated uncertainty around global trade.
Shares of French voucher and benefits company Pluxee climbed 4.4 per cent after reporting an 11.1 per cent organic rise in its third-quarter operating revenue. REUTERS
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Straits Times
an hour ago
- Straits Times
Trump says countries to start paying tariffs on Aug 1, floats range of 10% to 70%
Sign up now: Get ST's newsletters delivered to your inbox Many major trading partners, such as Japan, South Korea and the European Union, are still working to finalise deals. WASHINGTON – US President Donald Trump said that his administration will start sending out letters to trading partners on July 4 setting unilateral tariff rates, which he said countries would have to begin paying on Aug 1. Mr Trump told reporters that about '10 or 12' letters would go out on July 4, with additional letters coming 'over the next few days'. 'I think by the ninth they'll be fully covered,' Mr Trump added, referring to a July 9 deadline he initially set for countries to reach deals with the US to avoid higher import duties he has threatened. 'They'll range in value from maybe 60 or 70 per cent tariffs to 10 and 20 per cent tariffs,' he added. The top tier of that range, if formalised, would be higher than any tariffs the president initially outlined during his 'Liberation Day' rollout in early April. Those ranged from a 10 per cent baseline tariff on most economies up to a maximum of 50 per cent. Mr Trump did not elaborate on which countries would get the tariffs or whether that meant certain goods would be taxed at a higher rate than others. He said that countries would 'start to pay on Aug 1. The money will start going to come into the United States on Aug 1'. Mr Trump has long threatened that if countries fail to reach deals with the US before next week's deadline, he would simply impose rates on them, raising the stakes for trading partners who have rushed to secure agreements with his administration. Top stories Swipe. Select. Stay informed. Singapore Seller's stamp duty rates for private homes raised; holding period increased from 3 years to 4 Singapore Sengkang murder: Man accused of killing elderly mother escorted back to crime scene Singapore Multiple charges for man accused of damaging PAP campaign materials on GE2025 Polling Day Singapore Jail for man who recruited 2 Japanese women for prostitution at MBS Asia Japan urges evacuation of small island as 1,000 quakes hit region Asia Indonesian rescuers widen search for missing after ferry sinks World Trump's sweeping tax-cut and spending Bill wins congressional approval The US President initially announced his higher so-called 'reciprocal' tariffs on April 2, but paused those for 90 days to allow countries time to negotiate, putting in place a 10 per cent rate during that interval. So far, the Trump administration has announced deals with the UK and Vietnam and agreed to a truce with China that saw the world's two largest economies ease tit-for-tat tariffs. Asked on July 3 if more deals were on the way, Mr Trump responded that 'we have a couple of other deals, but you know, my inclination is to send a letter out and say what tariffs they are going to be paying'. 'It's much easier,' he said. Mr Trump announced the Vietnam deal on July 2, saying that the US would place a 20 per cent tariff on Vietnamese exports to the US and a 40 per cent rate on goods deemed transshipped through the nation – a reference to the practice whereby components from China and possibly other nations are routed through third countries on their way to the US. While the rates are lower than the 46 per cent duty Mr Trump imposed on Vietnam initially, they are higher than the universal 10 per cent level. And many of the particulars of the deal are still unclear, with the White House yet to release a term sheet or publish any proclamation codifying the agreement. Still, investors who have eagerly anticipated any deals between the US and trading partners were buoyed on July 2 by the Vietnam announcement, which saw share prices of American manufacturers with facilities in the country rise. Many major trading partners, however, such as Japan, South Korea and the European Union, are still working to finalise deals. Mr Trump has expressed optimism about reaching an agreement with India but has spoken harshly about the prospects of an accord with Japan, casting Tokyo as a difficult negotiating partner. He intensified his criticism this week, saying that Japan should be forced to 'pay 30 per cent, 35 per cent or whatever the number is that we determine'. The President on July 2 also said he was not considering delaying next week's deadline. Asked about any potential extension of talks, US Treasury Secretary Scott Bessent said earlier that Mr Trump would make the final call. 'We're going to do what the president wants, and he'll be the one to determine whether they're negotiating in good faith,' Mr Bessent said on CNBC when asked whether the deadline might be lengthened. BLOOMBERG
Business Times
2 hours ago
- Business Times
Asia: Markets mixed as Trump warns tariff letters to be sent soon
[HONG KONG] Asian investors trod cautiously on Friday as Donald Trump's deadline to avert his steep tariffs approached, with the US president saying he planned to start sending letters informing trading partners of their rates. Uncertainty leading up to next week's cut-off tempered the positive lead from another record on Wall Street, where a forecast-busting US jobs report soothed worries about the world's top economy. Governments around the world have fought to hammer out deals with Washington ahead of the July 9 deadline, set after Trump unveiled a blitz of levies on his 'Liberation Day' in early April. He and his top officials have said several were in the pipeline, but only Britain and Vietnam have signed pacts while China has agreed to a framework for it and the United States to slash tit-for-tat tolls and ship certain products. While negotiators continue to seek ways to avert the worst of the White House's measures, Trump warned on Thursday he would soon be issuing his messages to capitals. 'My inclination is to send a letter out and say what tariff they're going to be paying,' he told reporters. 'It's just much easier.' BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up He added: 'We're going to be sending some letters out, starting probably tomorrow, maybe 10 a day to various countries saying what they're going to pay to do business with the US.' The prospect that trading partners from Japan and South Korea to India and Taiwan could be hit with stiff tariffs fuelled fresh worries about the global economy. Tokyo edged up with Shanghai, Sydney, Wellington and Jakarta but Hong Kong, Seoul, Singapore, Taipei and Manila fell. Traders were unable to pick up the baton from their New York colleagues, who sent the S&P 500 and Nasdaq to more record closes ahead of the Independence Day break. Those gains followed data showing the US economy topped expectations to add 147,000 jobs in June while unemployment dipped to 4.1 per cent from 4.2 per cent, which was also better than estimated. The reading was taken as a sign the labour market remained in rude health despite warnings about the impact of Trump's tariffs. It also dented hopes that the Federal Reserve will cut interest rates at its next meeting this month, with bets now on two reductions before the end of the year - the first likely in September. However, analysts suggested that all was not what it seemed, pointing to softness in the private sector. 'We think that private-sector hiring has stalled, and we may see sporadic layoffs in some industries in the coming months,' warned analysts at MUFG. 'Despite the unemployment rate having fallen... the flow of potential workers that remained out of the labour force rose sharply in June (and over 750k have dropped out of the labor force over the past two months), further highlighting the weak hiring environment. 'We continue to view labour demand as being fundamentally weak relative to the past several years.' The passage of Trump's 'Big, Beautiful Bill' also left investors in a quandary as they weighed the extension of huge tax and spending cuts with forecasts that it will add around US$3 trillion to the already ballooning national debt. Still, it included a US$5 trillion increase in the debt limit, removing the risk the country could default on its bond payments. AFP
Straits Times
3 hours ago
- Straits Times
Japan's households boost spending by most since summer 2022
Consumption makes up more than half of Japan's economic output and could determine if the economy will enter or avoid a technical recession. TOKYO – Japan's household spending rose the most since the summer of 2022 in a sign that consumer may be getting used to persistent inflation and could support for an economy that is taking a hit from US tariffs. Outlays by households adjusted for inflation gained 4.7 per cent from a year ago in May, largely due to more spending on cars, the Ministry of Internal Affairs and Communications reported on July 4. The result beat the median economist estimate of a 1.2 per cent gain. The jump in cars this year helped inflate the overall number but was largely due to comparison with low volumes last year resulting from a safety certification scandal, according to an Internal Affairs Ministry official. Still, spending also grew for tourism both within and outside Japan while people also increased outlays on eating out. Consumption makes up more than half of Japan's economic output and could determine whether the economy will enter or avoid a technical recession. US tariffs including a 25 per cent levy on cars and car parts are weighing on Japan's exports, raising the risk that the economy may shrink again in the second quarter after contracting in the first three months of the year. 'The results are relatively good. But we need to take into account that the data tend to be volatile,' said Ms Harumi Taguchi, principal economist at S&P Global Market Intelligence. 'Temporary factors such as cars and travel pushed up the numbers, but it's unclear whether this indicates sustained strong consumption.' Around 64 per cent of economists polled in early June see the tariffs potentially causing a recession in the world's fourth-largest economy. So far Japanese carmakers have refrained from hiking prices in the US too much despite facing harsh tariffs, largely absorbing the costs and taking a hit to profits. Top stories Swipe. Select. Stay informed. Singapore Seller's stamp duty rates for private homes raised; holding period increased from 3 years to 4 Singapore Multiple charges for man accused of damaging PAP campaign materials on GE2025 Polling Day Asia Japan urges evacuation of small island as 1,000 quakes hit region World Trump's sweeping tax-cut and spending Bill wins congressional approval World Trump eyes simple tariff rates over complex talks, says letters will start going out on July 4 Sport A true fans' player – Liverpool supporters in Singapore pay tribute to late Diogo Jota Singapore Jail for man who recruited 2 Japanese women for prostitution at MBS Business More Singapore residents met CPF Required Retirement Sum when they turned 55 in 2024 Inflation in Japan remains persistently above the central bank's 2 per cent target. Nominal wages have been on the rise, but real wages adjusted for inflation have fallen for four months nonstop through April, meaning that a rise in paychecks has yet to offset the pain of inflation. May wage data are due on Monday. Ahead of an upper house election on July 20, Prime Minister Shigeru Ishiba is proposing fresh cash handouts to help households deal with inflation. Some opposition parties are pitching a sales tax cut as an alternative to ease the pain. Unlike in the US, where President Donald Trump openly pressures the Federal Reserve on the course of monetary policy, the Bank of Japan appears to be facing little political pressure over bringing down inflation. 'Inflation continues to hold down consumption,' said Ms Taguchi. 'Wages are rising, but real wages keep falling, so I do not expect consumption to strengthen. In addition, the outcome of trade negotiations with Trump will affect economic sentiment.' BLOOMBERG
