Asian Currencies Mostly Weaken as Traders Await Tariff Developments
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Yahoo
17 minutes ago
- Yahoo
Europe Inc swerves Trump trade war 'hurricane' but laments higher tariffs
LONDON (Reuters) -European companies were left wondering on Monday whether to cheer a hard-won U.S. trade deal or lament a still sharp jump in tariffs versus those in place before President Donald Trump's second term. A day earlier, European leaders heralded a framework trade deal with the United States that would impose a 15% import tariff on most EU goods, averting a spiralling battle between two allies which account for almost a third of global trade. Although the deal is better than the 30% rate threatened by Trump and will bring clarity for European makers of cars, planes and chemicals, the 15% baseline tariff is well above initial hopes of a zero-for-zero agreement. It is also higher than the U.S. import tariff rate last year of around 2.5%. "Those who expect a hurricane are grateful for a storm," said Wolfgang Große Entrup, head of the German Chemical Industry Association VCI, calling for more talks to reduce tariffs that he said were "too high" for Europe's chemical industry. "Further escalation has been avoided. Nevertheless, the price is high for both sides. European exports are losing competitiveness. U.S. customers are paying the tariffs." The deal, which also includes $600 billion of EU investments in the United States and $750 billion of EU purchases of U.S. energy over Trump's second term, includes some exemptions, even if details are still to be ironed out. Carmakers Volkswagen and Stellantis, among others, will face the 15% tariff, down from 25% under the global levy imposed by Trump in April. Stellantis shares rose 3.5% and car parts maker Valeo was up 4.7% in early trade. German pharma group Merck KGaA gained 2.9%. Aircraft and aircraft parts will be exempt - good news for French planemaker Airbus - as will certain chemicals, some generic drugs, semiconductor equipment, some farm products, natural resources and critical raw materials. Shares in the world's biggest chip maker ASML rose more than 4%, among the biggest gainers on the pan-European STOXX 600 index. STILL TO BE NEGOTIATED Dutch brewer Heineken cheered the deal, with CEO Dolf van den Brink welcoming the certainty it brought. The world's No.2 brewer sends beer, especially its namesake lager, to the U.S. from Europe and Mexico, and has also suffered from the indirect effect on consumer confidence in important markets like Brazil. The rate on spirits that could impact firms such as Diageo, Pernod Ricard and LVMH, is still being negotiated though. "It seems that in coming days there could be negotiations for certain agricultural products, zero for zero, which is what the European and U.S. sectors have been calling for," said Jose Luis Benitez, director of the Spanish Wine Federation. Benitez added that a 15% rate could put Europe at a disadvantage versus other wine exporting regions subject to 10% tariffs. "If there are any exceptions, we hope that the (European) Commission understands that wine should be one of them." Lamberto Frescobaldi, the president of Italian wine body UIV, said on Sunday that 15% tariffs on wine would result in a loss of 317 million euros ($372.63 million) over the next 12 months, though the group was waiting to see the final deal text. Others said that the agreement- which followed on the heels of a similar one with Japan - helped bring greater clarity for company leaders, but still threatened to make European firms less competitive. "While this agreement puts an end to uncertainty, it poses a significant threat to the competitiveness of the French cosmetics industry," said Emmanuel Guichard, secretary general of French cosmetics association FEBEA, which counts L'Oreal, LVMH and Clarins among its members. ($1 = 0.8507 euros)
Yahoo
17 minutes ago
- Yahoo
100ml liquid restriction set to be scrapped across European airports – but there's a catch
Airports across the European Union (EU) are finally set to scrap the 100ml liquid restrictions for passengers – but there's a catch. The constraint was due to be scrapped last summer, but a European Commission (EC) ruling kept it in place temporarily. Now, aviation hubs with advanced scanners will allow passengers to carry wine, olive oil, perfume and other liquids in containers of up to two litres. Participating airports include travel hotspots such as Berlin, Rome, Amsterdam and Milan, with more expected to follow. While many major airports already have the advanced scanners, not all do, including London's Heathrow. It would cost the airport £1.04bn to install the equipment. There will be no mandatory requirement for airports to implement the new technology and it will be the decision of individual facilities to purchase the scanners. Consequently, the new ruling could cause confusion for passengers departing from an airport with the scanners, but returning home via an airport without them. In this instance, only 100ml would be allowed in the hand luggage on the return flight. The scanners use computed tomography (CT) to scan luggage with increased accuracy. Their introduction also means passengers will no longer have to remove other items from cabin baggage, such as laptops and tablets, further streamlining the security process. The major change was first reported by Italian news outlet Corriere della Sera and confirmed by the European Commission, with the European Civil Aviation Conference (ECAC) set to green light the move imminently. European Commission spokesperson Anna-Kaisa Itkonen told The Independent that they were expecting the ruling to be confirmed 'in the next [few] days.' 'Once individual manufacturer's airport equipment passes tests and gets ECAC approval, it can receive the EU Stamp, permitting the screening of liquids of larger than 100ml. 'After receiving this approval, the equipment may be deployed for use at airports.' The Independent has approached the ECAC for comment. The news mirrors the recent decision by Birmingham and Edinburgh airports to remove the 100ml liquid restriction, while other UK airports still enforce the limit. Under existing rules, hand luggage liquids must be packed in containers carrying no more than 100ml, with some exceptions for baby products and medicines. Travellers are being advised to check the current rules from both their departing and return airports before travelling.
CNBC
17 minutes ago
- CNBC
Treasury yields tick lower as investors look ahead to Fed's interest rate decision
U.S. Treasury yields were lower on Monday as investors anticipated the Federal Reserve's interest rate decision later this week, as well as a key inflation reading, which will shed light on the impact of tariffs on the economy. At 4:39 a.m. ET, the 10-year Treasury yield was down just over one basis point to 4.371%. The 2-year yield was less than 1 basis point lower to 3.912%, while the 30-year yield fell one basis point to 4.911%. One basis point is equal to 0.01%. Yields and prices move in opposite directions. It's a busy week ahead for investors, with the Fed set to have its two-day policy meeting, concluding on Wednesday, when the interest rate decision will be announced. Traders are pricing in a 97% chance that interest rates will be held steady at their current target range of 4.25% to 4.5%, according to the CME FedWatch Tool. They will also look for clues on whether rate cuts will be coming later in the year. The personal consumption expenditures index — the Fed's preferred inflation gauge — is due on Thursday and will reveal the effects of tariffs on inflation. The report is forecast to show inflation increasing to 2.4% from 2.3% year over year, according to FactSet, and to 0.31% from 0.14%, on a monthly basis. Other economic data coming out this week includes the Job Openings and Labor Turnover Survey on Tuesday, ADP's private payrolls report on Wednesday, weekly initial jobless claims on Thursday, and July's jobs report on Friday. On the tariff front, the U.S. and European Union announced Sunday that they've reached a trade agreement which includes 15% tariffs on EU goods imported to the U.S. That's down from the 30% levy that the EU would have been hit with on the approaching Aug. 1 deadline.
