Asian Markets Rise on Trade Optimism and Strong US Earnings
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Recent trade agreements with Japan, Indonesia, and the Philippines have lifted investor confidence. Now it is talking with the EU, raising the possibility of a bigger deal. European stock futures were swept along with the optimism: Euro Stoxx 50 futures rose 1.17%, DAX futures 1.15%, and FTSE futures 0.39%.
"Markets seem to be ready to throw caution aside on the back of significant trade deals," said NAB strategist Gavin Friend.
Trump's Fed Visit Sparks New Speculation
In a surprise, President Trump is scheduled to visit the Federal Reserve on Thursday, two days before the next policy meeting. Analysts speculated that the visit might be intended to pressure Federal Reserve Chair Jerome Powell to lower interest rates. The Fed is overwhelmingly anticipated to keep rates unchanged next week.
The 10-year U.S. Treasury yield was unchanged at 4.3937%, while the 2-year yield traded at 3.8908%. The dollar fell 0.31% against the yen to 146.03 and dipped briefly on the dollar index, down to 97.156.
Earnings and Wall Street Drive Momentum
U.S. stocks rose strongly on Wednesday. The Dow rose 1.1%, the S&P 500 climbed 0.76%, and the Nasdaq gained 0.6%. To date, 23% of S&P 500 companies have reported results for the second quarter, with 85% of them beating expectations, according to LSEG data.
In Asia, shares of the South Korean microchip maker SK Hynix and the Indian technology services company Infosys both provided optimistic earnings forecasts, setting aside concerns about tariffs. The focus of investors now turns to reports from big U.S. companies and the ECB's rate decision later on Thursday.
The ECB is expected to pause after seven straight cuts. Traders anticipate one more cut by December. Trump's earlier threat of a 30% tariff on EU goods could potentially be softened down, as officials indicate that a compromise of a 15% flat rate is in the works.
Commodities Steady Ahead of Central Bank Moves
Oil prices rose on Thursday following a sharp drop in the United States' crude stocks and amid expectations of potential trade deals lifting demand for crude. American crude gained 0.52% to $65.59 a barrel. Spot gold eased marginally to $3,382.79 an ounce as safe-haven demand waned.
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Straits Times
an hour ago
- Straits Times
'I won't humiliate myself': Brazil's president sees no point in tariff talks with Trump
Brazil's President Luiz Inacio Lula da Silva poses for a picture after an interview with Reuters at the Alvorada Palace, in Brasilia, Brazil, August 6, 2025. REUTERS/Adriano Machado BRASILIA - As U.S. tariffs on Brazilian goods jumped to 50% on Wednesday, Brazil's President Luiz Inacio Lula da Silva told Reuters in an interview that he saw no room for direct talks now with U.S. President Donald Trump that would likely be a "humiliation." Brazil is not about to announce reciprocal tariffs, he said. Nor will his government give up on cabinet-level talks. But Lula himself is in no rush to ring the White House. "The day my intuition says Trump is ready to talk, I won't hesitate to call him," Lula said in an interview from his presidential residence in Brasilia. "But today my intuition says he doesn't want to talk. And I won't humiliate myself." Despite Brazil's exports facing one of the highest tariffs imposed by Trump, the new U.S. trade barriers look unlikely to derail Latin America's largest economy, giving Lula more room to stand his ground against Trump than most Western leaders. Lula described U.S.-Brazil relations at a 200-year nadir after Trump tied the new tariff to his demands for an end to the prosecution of right-wing former President Jair Bolsonaro, who is standing trial for plotting to overturn the 2022 election. The president said Brazil's Supreme Court, which is hearing the case against Bolsonaro, "does not care what Trump says and it should not," adding that Bolsonaro should face another trial for provoking Trump's intervention, calling the right-wing former president a "traitor to the homeland." "We had already pardoned the U.S. intervention in the 1964 coup," said Lula, who got his political start as a union leader protesting against the military government that followed a U.S.-backed ouster of a democratically elected president. Top stories Swipe. Select. Stay informed. Singapore MRT track issue causes 5-hour delay; Jeffrey Siow says 'we can and will do better' Singapore ST Explains: What is a track point fault and why does it cause lengthy train disruptions? Singapore Three people taken to hospital after fire in Punggol executive condominium Singapore Elderly man found dead in SingPost Centre stairwell could have been in confused state: Coroner Singapore 81 primary schools to hold ballot for Phase 2C of Primary 1 registration Singapore S'pore and Indonesia have discussed jointly developing military training facilities: Chan Chun Sing Singapore Two workers died after being hit by flying gas cylinders in separate incidents in 2025 Sport Young Lions and distance runner Soh Rui Yong left out of SEA Games contingent "But this now is not a small intervention. It's the president of the United States thinking he can dictate rules for a sovereign country like Brazil. It's unacceptable." The Brazilian president said he had no personal issues with Trump, adding that they could meet at the United Nations next month or U.N. climate talks in November. But he noted Trump's track record of dressing down White House guests such as South African President Cyril Ramaphosa and Ukrainian President Volodymyr Zelenskiy. "What Trump did with Zelenskiy was humiliation. That's not normal. What Trump did with Ramaphosa was humiliation," Lula said. "One president can't be humiliating another. I respect everyone and I demand respect." Lula said his ministers were struggling to open talks with U.S. peers, so his government was focused on domestic measures to cushion the economic blow of U.S. tariffs, while maintaining "fiscal responsibility." He also said he was planning to call leaders from the BRICS group of developing nations, starting with India and China, to discuss the possibility of a joint response to U.S. tariffs. Lula also described plans to create a new national policy for Brazil's strategic mineral resources, treating them as a matter of "national sovereignty" to break with a history of mining exports that added little value in Brazil. REUTERS
Straits Times
2 hours ago
- Straits Times
Lula rejects 'humiliation' of calling Trump over US-Brazil tariff
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CNA
3 hours ago
- CNA
Trump orders extra 25% tariff on Indian goods, straining trade ties further
WASHINGTON: US President Donald Trump on Wednesday (Aug 6) ordered an additional 25 per cent tariff on goods from India for its purchases of Russian oil, in a move that threatens to severely disrupt bilateral trade and marks the sharpest downturn in ties since his return to office. The tariff, set to take effect in three weeks, comes on top of a separate 25 per cent duty entering into force on Thursday, according to the text of the executive order released by the White House. The order also threatens potential penalties on other countries deemed to be "directly or indirectly importing Russian Federation oil". Exemptions remain for items targeted by separate sector-specific duties such as steel and aluminium, and categories that could be hit, like pharmaceuticals. The White House said the move was "necessary and appropriate". INDIA HITS BACK India's foreign ministry said the decision was "extremely unfortunate" and that New Delhi will take all actions necessary to protect its national interests. "Our imports are based on market factors and done with the overall objective of ensuring the energy security of 1.4 billion people of India," it said in a statement. "It is therefore extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest." Trump has been ramping up pressure on India after signalling fresh sanctions on Moscow if it did not make progress by Friday towards a peace deal with Kyiv, as Russia's invasion of its neighbour drags on. India's national security adviser was in Moscow on Wednesday, media in New Delhi reported, coinciding with a visit by US envoy Steve Witkoff. India's foreign ministry earlier said US pressure to stop it from buying Russian oil was "unjustified and unreasonable" and that it would protect its interests. ECONOMIC FALLOUT FOR INDIA Analysts say the new tariffs, which could push Indian export duties to as high as 50 per cent, will impact sectors such as textiles, footwear, gems and jewellery. India exported nearly US$87 billion worth of goods to the US in 2024. 'This is a severe setback. Nearly 55 per cent of our shipments to the US will be affected,' said S.C. Ralhan, president of the Federation of Indian Export Organisations. Indian exporters now face a 30 to 35 per cent disadvantage compared with competitors in Vietnam, Bangladesh and Japan, economists warn. The move follows five rounds of stalled trade talks, derailed by disagreements over US access to Indian agriculture and dairy markets, and New Delhi's refusal to cut Russian oil imports, which hit a record US$52 billion last year. The timing of the tariffs, effective 21 days after Aug 7, suggests Washington may still be open to negotiation, according to Indian officials. 'We still have a window,' a senior official said, adding that phased cuts in Russian oil imports could be part of a compromise. NO RETALIATION PLANNED India has not announced any retaliatory tariffs or plans for a high-level visit to Washington. Instead, the government is considering domestic relief for exporters, including loan guarantees and interest subsidies. A sharp drop in shipments to the US could drag India's GDP growth below 6 per cent this year, down from the central bank's 6.5 per cent forecast, said Sakshi Gupta of HDFC Bank. Markets responded with caution, the Indian rupee weakened in offshore forwards trade, and equity futures fell modestly. 'Unless there's swift clarity or a breakthrough, a near-term knee-jerk market reaction is inevitable,' said Mayuresh Joshi, head of equity research at Willian O' Neil. CHINA EXEMPT, FOR NOW Trump's move could reshape India's economic ambitions. Many American companies have seen India as an alternative to Chinese manufacturing, which Trump had hoped to diminish through the use of tariffs. Even though China also buys oil from Russia, Beijing was not subject to the additional tariffs in the order signed by the Republican president. The US and China are currently in negotiations on trade, with Washington imposing a 30 per cent tariff on Chinese goods and facing a 10 per cent retaliatory tax from Beijing on American products. Meanwhile, Indian Prime Minister Narendra Modi is preparing for his first visit to China in over seven years, raising speculation about a potential shift in New Delhi's strategic alignments.
