MORNING BID EUROPE-Tariff plot twists lose their bite
A look at the day ahead in European and global markets from Wayne Cole.
Is this the dog that didn't bark? That would be the question from Sherlock Holmes fans given the utter lack of market reaction to U.S. President Donald Trump's threatened doubling of steel and aluminium tariffs to 50%.
That policy shift by tweet came late Friday after markets shut, so there was some anticipation of an impact today, maybe a drop in the Canadian dollar given the scale of their steel exports to the U.S. Yet the loonie is actually firmer against a broadly softer greenback, while European share futures are off a shade and Wall St futures only modestly lower.
This could be the TACO meme in action as investors assume 'Trump always chickens out', though he's leaving it late with the new higher tariff supposed to go into effect on Wednesday. Then again, last minute cliffhangers work well on reality TV.
European Union negotiators weren't pleased with this latest plot twist and threatened retaliation in return, while also letting it be known that the court case decision against the April 2 tariffs gave them added "leverage".
Neither does Trump's latest rhetorical attack on China seem to be working, with Beijing sticking to its guns. If Trump is counting on a call from China's President Xi Jinping to sort things out, he might be waiting by the phone for a while.
It was also somewhat ironic hearing Treasury Secretary Scott Bessent complaining that China was holding back vital products from the United States, given it was the U.S. that started a trade war with the specific aim of rebuffing Chinese imports.
Federal Reserve Governor Christopher Waller speaking in South Korea said tariffs meant there were downside risks to activity and unemployment, and upside risks to inflation. Yet he was still optimistic about the chance of "good news" interest rate cuts later this year, cementing his place as one of the more dovish Fed officials.
Fed Chair Jerome Powell will speak later Monday, though limited to opening remarks to an international finance conference.
Key developments that could influence markets on Monday:
* UK house prices, European PMIs, U.S. ISM factory survey
* Fed Chair Powell gives opening remarks at the Federal Reserve Board's International Finance Division 75th Anniversary Conference, while Chicago Fed Goolsbee and Dallas Fed Logan appear in Q&A's
(By Wayne Cole; Editing by Christopher Cushing)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
15 minutes ago
- Time of India
What should you do with your annual bonus - save or spend?
Sharmin Adhikari is 35 years old and an interior designer by profession. She is thrilled about her annual bonus and the extra cash she has received, especially during the vacation season. She is tempted to splurge on a dream European cruise with her husband, but also feels the need to save. Torn between indulgence and prudence, she is weighing her options and wants to know what to do. Sharmin Adhikari should start by clearing her outstanding debts. She should begin with credit cards, followed by personal, car and home loans, in this order. Credit cards carry the highest urgency, with interest rates reaching up to 36% annually. While using the bonus to pay off debt is technically spending, it leads to significant monthly savings by cutting down future interest costs. Once the debt is under control, her next priority should be to build an emergency fund, if she doesn't already have one. If Adhikari has already tackled her high-cost debt and has built an emergency fund, she can consider splitting her bonus between saving and spending. After all, she has earned it, and a small, thoughtful indulgence can be a rewarding way to celebrate. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Pensioners Can Buy These Electric Cars in Kuala Lumpur - See Prices Here! Electric Cars | Search Ads Search Now Undo Choosing something that offers lasting value, like a short, affordable holiday, may be more meaningful than splurging on a bucket-list cruise. The rest of the bonus could be set aside for upcoming expenses , such as home repairs, new car, or a short course, or added to her long-term savings for goals like retirement . The things that Adhikari could do with her bonus could be endless. The decision on what to do with a bonus cheque doesn't always have to be a choice between saving and spending. The only caveat is her financial situation. In case there is a debt or a major expense looming, the money might be best saved. Live Events Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Meht a.
Time of India
18 minutes ago
- Time of India
Asian stocks advance on trade talks, US jobs data
Asian stocks opened higher Monday with the US and China set to resume trade negotiations, while positive jobs data in the world's largest economy eased recession fears . Equities in Japan and and South Korea opened higher while contracts for the S&P 500 index were flat after the gauge closed at its highest since February. Yields on 10-year Treasuries were steady at 4.51%, after surging Friday. The yen was slightly stronger against the dollar. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 목어깨 아플땐 "이모양 베개" 절대 쓰지마세요. 7년차 개발자 더 알아보기 Undo Trade tensions appeared to recede between President Donald Trump and China's Xi Jinping as an impasse on critical minerals was broken, paving the way for further trade talks . Adding to the optimism in the stock market was the surprise in labor data. While US job growth moderated in May and prior months were revised lower, Friday's report narrowly exceeded forecasts. 'Trade policy will remain the big macro uncertainty,' Kyle Rodda, a senior market analyst at wrote in a note Monday about the US-China negotiations. 'Signs of further momentum in talks could give the markets fresh boost to kick-off the week.' Stock markets have rebounded following a tumultuous two-month period, with the S&P 500 gaining for the fifth week in seven. Asian and European equity benchmarks have risen seven times in the past eight weeks. Live Events Meanwhile, the US and Chinese negotiators are set to open their second round of trade talks Monday in London, the first since Trump and Xi finally broke a logjam. That's offering a glimmer of hope that the world's two largest economies can defuse tensions over Chinese dominance in rare-earth minerals. Both sides had accused the other of reneging on a deal reached in May in Geneva, where they tried to start dialing back the trade war. Ahead of the talks, China granted approval to some applications for the export of rare earths. Boeing Co. has also begun shipping commercial jets to China for the first time since early April, indicating a reopening of trade flows. Later this week, attention will turn to the sale of government bonds in the US. The Treasury is set to sell $22 billion of 30-year bonds on Thursday, part of its regularly scheduled borrowings. This comes after global investor pushback against long-term government debt. Investors will also be watching US inflation print this week. On Friday, nonfarm payrolls increased 139,000 last month after a combined 95,000 in downward revisions to the prior two months. The unemployment rate held at 4.2%, while wage growth accelerated. The payrolls figure helped alleviate concerns of a rapid deterioration in labor demand as companies contend with higher costs related to tariffs and prospects of slower economic activity. In other trade news, a US trade team that's currently in India for negotiations has extended its stay, according to people familiar with the matter. That's a sign talks are progressing ahead of a July deadline.
Mint
an hour ago
- Mint
Cost pinch is coming for cement companies in Q1
The early onset of the monsoon plays spoilsport for cement demand and prices. Also, a temporary rise in power and fuel costs (P&F) is on the cards for cement makers in the June quarter (Q1FY26). The cost of imported petroleum coke (pet coke) saw a sudden spike in March. A surge in demand by Chinese companies in anticipation of higher tariffs led to pre-booking, which translated into higher procurement costs. P&F costs are estimated at 30-35% of the cement sector's total production cost. Petcoke, which is derived from oil refining, is a key input material for cement manufacturers. Typically, cement companies import petcoke and stock fuel inventories for two-three months. So, the impact on profitability due to movement in fuel costs comes with a lag. Although spot international petcoke cost has now cooled off to $104/tonne from around $122/tonne in March, cement companies with a relatively higher reliance on this fuel could feel the heat in Q1FY26. Also read: Meta in talks to invest nearly $10 billion in artificial intelligence startup Scale AI 'On average, this should translate into a P&F cost/tonne increase of ₹75 for Indian cement companies during Q1FY26 on a sequential basis. North-focused cement makers Shree Cement Ltd and JK Cement could be most hurt," said Kunal Shah, analyst at DAM Capital. The fuel mix of Shree Cement and JK Cement comprises 95% and 70% petcoke, respectively. On the other hand, UltraTech Cement Ltd should be least affected given material exposure to imported coal, where cost trends were favourable in Q4FY25, he added. (See chart 1) To counter fuel cost volatility and reduce carbon footprint, cement companies have been enhancing their cost efficiency by investing in green energy and waste heat recovery systems. For instance, Ambuja eyes cost savings of ₹500-550/tonne by FY28 and has achieved around ₹150-170/tonne in FY25. Further savings of ₹100/tonne is likely in FY26. Dalmia Bharat Ltd expects to meet half of its ₹150–200/tonne cost savings target in FY26. These are steps in the right direction, but they would yield outcomes gradually. Cement prices However, in the current backdrop, if cement prices sustain at higher levels, companies could get some cushion from this cost bump. In June so far, cement prices in the trade segment at pan-India level are up by ₹2/bag month-on-month to ₹358/bag, according to Nomura Global Markets Research. One cement bag weighs 50kg. This is largely led by a ₹19/bag hike in the south, although cement prices are marginally down by ₹2-5/bag in other regions. In Q1FY26 so far, the average pan-India trade segment cement price is up ₹12/bag sequentially to ₹356/bag, the Nomura report said on 4 June. The brokerage cautions that pricing indiscipline amid industry consolidation will likely keep trade prices range-bound. Also read: Policy U-turn? New govt notice hints at easier local sourcing rules for telecom equipment makers Dealer channel checks by brokerages show that cement demand has been in the low single digits in Q1FY26 so far. Q1 will be followed by a seasonally weak Q2 as construction activities tend to be dull during the monsoon season. So, depending upon the pace of demand recovery, any meaningful improvement in cement prices could happen in H2FY26. Large cement stocks have given mixed returns in 2025 so far. On a one-year forward EV/Ebitda, the sector is trading at a valuation multiple of 20.6x, which is around a 25% premium to the long-term average, according to Motilal Oswal Financial Services. The sector's valuation declined around 30% by March 2025 from its peak in June/July 2024 due to weaker-than-estimated demand growth, continuing pricing pressure, and an increase in fuel prices, it said in a report. For rich valuations to justify realisations, they have to meaningfully improve. Key takeaways Also read: Not Ozempic, in India THIS weigh-loss and diabetes drug from Eli Lilly sees sales jump 60% — what is it?
