Latest news with #ChrisScicluna
CNBC
an hour ago
- Business
- CNBC
Dollar hits 2025 low, Middle East tensions fuel risk-off mood
The dollar hit a new 2025 low on Thursday, while stocks eased from record highs, as a cocktail of rising Middle East tensions and concern over the fragility of a trade truce between Washington and Beijing drew investors into safe-haven assets. Separately, a report on U.S. consumer inflation on Wednesday showed overall price pressures remained contained in May, largely due to declines in the cost of gasoline, cars and housing. But most economists expect inflation to pick up as the impact of U.S. tariffs begins to bite. The dollar, which has lost around 10% in value against a basket of currencies this year, fell to its lowest since April 2022 in European trading. Global stocks took a breather from the almost-unbroken rally that has run since early April, leaving the MSCI All-Country World index flat, just below Wednesday's all-time high. In Europe, the STOXX 600 fell 0.8%, led mostly by airlines, given brewing tensions in the Middle East and a deadly crash of an Air India flight bound for London that killed at least 30 people near the Indian city of Ahmedabad. The U.S. administration on Wednesday said U.S. personnel were being moved out of the Middle East due to heightened security risks in the region, which briefly drove oil prices up by 4% before they receded. "(A flare-up in tensions) is a significant tail risk, but I don't think it is anybody's baseline forecasts. So it's something to watch if there is a real escalation there, then markets will take fright and that would have ramifications for the oil price," Daiwa Capital economist Chris Scicluna said. Iran, for its part, said it will not abandon its right to uranium enrichment, a senior Iranian official told Reuters on Thursday, adding that a "friendly" regional country had alerted Tehran over a potential military strike by Israel. Classic safe-haven assets got a lift. The Swiss franc and the Japanese yen strengthened, pushing the dollar down by 1% against the franc and down 0.7% against the yen, while gold rose nearly 1% to $3,385 an ounce. The sense of relief stemming from a positive conclusion to U.S.-China trade talks earlier this week, which President Donald Trump said was a "great deal with China", evaporated by Thursday. Adding yet another dose of uncertainty in the markets, Trump said the U.S. would send out letters in one to two weeks outlining the terms of trade deals to dozens of other countries, which they could embrace or reject. "Markets may have no choice but to respond to Trump's tariff threat — even if it's just posturing to bring others to the table. The gap between 'risk-on' positioning and real-world risks has stretched too far," said Charu Chanana, chief investment strategist at Saxobank. Trump's erratic tariff policies have roiled global markets this year, prompting hordes of investors to exit U.S. assets, especially the dollar, as they worried about rising prices and slowing economic growth. The euro rose by as much as 1.07% to $1.16, its highest since October 2021. U.S. Treasuries also rallied in price, pushing yields down 3.5 basis points to below 4.38%, while two-year yields , which are more sensitive to inflation and interest-rate expectations, eased 2.7 bps to 3.92%. Later in the day, the focus will be on a producer inflation report as some of the components feed into the Fed's preferred inflation gauge - the Personal Consumption Expenditure Index. Wednesday's consumer inflation index kept alive the prospect of the Federal Reserve cutting rates by a quarter point, but only in September, as policymakers assess how tariffs work their way through the real economy. "I suspect it's probably going to be a combination of the two. Therefore it makes sense for the Fed to wait and see what happens rather than rushing into a rate cut," AMP Capital's head of investment strategy and chief economist Shane Oliver said. Oil, which has fallen by 20% in the last year, eased by 1.6% to $68.63 a barrel, but was still pinned near two-month highs, adding another moving part to the outlook for interest rates.
New Straits Times
2 hours ago
- Business
- New Straits Times
Dollar hits 2025 low, Middle East tensions fuel risk-off mood
LONDON: The US dollar hit a new 2025 low on Thursday, while stocks eased from record highs, as a cocktail of rising Middle East tensions and concern over the fragility of a trade truce between Washington and Beijing drew investors into safe-haven assets. Separately, a report on US consumer inflation on Wednesday showed overall price pressures remained contained in May, largely due to declines in the cost of gasoline, cars and housing. But most economists expect inflation to pick up as the impact of US tariffs begins to bite. The dollar, which has lost around 10 per cent in value against a basket of currencies this year, fell to its lowest since April 2022 in European trading. Global stocks took a breather from the almost-unbroken rally that has run since early April, leaving the MSCI All-Country World Index flat, just below Wednesday's all-time high. In Europe, the STOXX 600 fell 0.8 per cent, led mostly by airlines, given brewing tensions in the Middle East and a deadly crash of an Air India flight bound for London that killed at least 30 people near the Indian city of Ahmedabad. Futures on the S&P 500 and Nasdaq fell 0.5–0.6 per cent. The US administration on Wednesday said US personnel were being moved out of the Middle East due to heightened security risks in the region, which briefly drove oil prices up by four per cent before they receded. "(A flare-up in tensions) is a significant tail risk, but I don't think it is anybody's baseline forecasts. So it's something to watch — if there is a real escalation there, then markets will take fright and that would have ramifications for the oil price," Daiwa Capital economist Chris Scicluna said. Iran, for its part, said it will not abandon its right to uranium enrichment, a senior Iranian official told Reuters on Thursday, adding that a "friendly" regional country had alerted Tehran over a potential military strike by Israel. Classic safe-haven assets got a lift. The Swiss franc and the Japanese yen strengthened, pushing the dollar down by one per cent against the franc and down 0.7 per cent against the yen, while gold rose nearly one per cent to US$3,385 an ounce. The sense of relief stemming from a positive conclusion to US-China trade talks earlier this week, which President Donald Trump said was a "great deal with China", evaporated by Thursday. RED, WHITE AND BLUE LETTERS Adding yet another dose of uncertainty in the markets, Trump said the US would send out letters in one to two weeks outlining the terms of trade deals to dozens of other countries, which they could embrace or reject. "Markets may have no choice but to respond to Trump's tariff threat — even if it's just posturing to bring others to the table. The gap between 'risk-on' positioning and real-world risks has stretched too far," said Charu Chanana, chief investment strategist at Saxobank. Trump's erratic tariff policies have roiled global markets this year, prompting hordes of investors to exit US assets, especially the dollar, as they worried about rising prices and slowing economic growth. The euro rose by as much as 1.07 per cent to US$1.16, its highest since October 2021. US Treasuries also rallied in price, pushing yields down 3.5 basis points to below 4.38 per cent, while two-year yields, which are more sensitive to inflation and interest-rate expectations, eased 2.7 bps to 3.92 per cent. Later in the day, the focus will be on a producer inflation report as some of the components feed into the Fed's preferred inflation gauge — the Personal Consumption Expenditure Index. Wednesday's consumer inflation index kept alive the prospect of the Federal Reserve cutting rates by a quarter point, but only in September, as policymakers assess how tariffs work their way through the real economy. "I suspect it's probably going to be a combination of the two. Therefore it makes sense for the Fed to wait and see what happens rather than rushing into a rate cut," AMP Capital's head of investment strategy and chief economist Shane Oliver said. Oil, which has fallen by 20 per cent in the last year, eased by 1.6 per cent to US$68.63 a barrel, but was still pinned near two-month highs, adding another moving part to the outlook for interest rates.
The Advertiser
5 hours ago
- Business
- The Advertiser
Dollar skims low, MidEast tensions fuel risk-off mood
The dollar has neared a 2025 low while stocks eased from record highs, as a cocktail of rising Middle East tensions and concern over the fragility of a trade truce between Washington and Beijing drew investors into safe-haven assets. Separately, a report on US consumer inflation on Wednesday showed overall price pressures remained contained in May, largely due to declines in the cost of gasoline, cars and housing. But most economists expect inflation to pick up as the impact of US tariffs begins to bite. The dollar, which has lost around 10 per cent in value against a basket of currencies this year, skimmed its lowest levels since late April, which in turn, marked its lowest level in three years. Global stocks took a breather on Thursday from the almost-unbroken rally that has run since early April, leaving the MSCI All-Country World index down 0.1 per cent, just below Wednesday's all-time high. In Europe, the STOXX 600 fell 0.8 per cent, led mostly by airlines and autos, given the strength in the oil price, while futures on the S&P 500 and Nasdaq fell 0.5 per cent. The US administration on Wednesday said US personnel were being moved out of the Middle East due to heightened security risks in the region, which briefly drove oil prices up by four per cent before they receded. "(A flare-up in tensions) is a significant tail risk, but I don't think it is anybody's baseline forecasts. So it's something to watch if there is a real escalation there, then markets will take fright and that would have ramifications for the oil price," Daiwa Capital economist Chris Scicluna said. Iran, for its part, said it will not abandon its right to uranium enrichment, a senior Iranian official told Reuters on Thursday, adding that a "friendly" regional country had alerted Tehran over a potential military strike by Israel. Classic safe-haven assets got a lift. The Swiss franc and the Japanese yen strengthened, pushing the dollar down by around 0.6 per cent against both currencies, while gold held firm at $US3,350 an ounce. The sense of relief stemming from a positive conclusion to US-China trade talks earlier this week, which President Donald Trump said was a "great deal with China", evaporated by Thursday. Adding yet another dose of uncertainty in the markets, Trump said the US would send out letters in one to two weeks outlining the terms of trade deals to dozens of other countries, which they could embrace or reject. "Markets may have no choice but to respond to Trump's tariff threat - even if it's just posturing to bring others to the table. The gap between 'risk-on' positioning and real-world risks has stretched too far," said Charu Chanana, chief investment strategist at Saxobank. Trump's erratic tariff policies have roiled global markets this year, prompting hordes of investors to exit US assets, especially the dollar, as they worried about rising prices and slowing economic growth. The euro, one of the beneficiaries of the dollar's decline, touched a seven-week high and was last at $US1.1535. US Treasuries also rallied in price, pushing yields down 1.5 basis points to below 4.4 per cent, while two-year yields, which are more sensitive to inflation and interest-rate expectations, eased 1.6 basis points to 3.93 per cent. Later in the day, the focus will be on a producer inflation report as some of the components feed into the Fed's preferred inflation gauge - the Personal Consumption Expenditure Index. Wednesday's consumer index kept alive the prospect of the Federal Reserve cutting rates by a quarter point, but only in September, as policymakers assess how tariffs work their way through the real economy. "I suspect it's probably going to be a combination of the two. Therefore it makes sense for the Fed to wait and see what happens rather than rushing into a rate cut," AMP Capital's head of investment strategy and chief economist Shane Oliver said. Oil, which has fallen by 20 per cent in the last year, eased by one per cent to $US69.07 a barrel, but remained near two-month highs, adding another moving part to the outlook for interest rates. The dollar has neared a 2025 low while stocks eased from record highs, as a cocktail of rising Middle East tensions and concern over the fragility of a trade truce between Washington and Beijing drew investors into safe-haven assets. Separately, a report on US consumer inflation on Wednesday showed overall price pressures remained contained in May, largely due to declines in the cost of gasoline, cars and housing. But most economists expect inflation to pick up as the impact of US tariffs begins to bite. The dollar, which has lost around 10 per cent in value against a basket of currencies this year, skimmed its lowest levels since late April, which in turn, marked its lowest level in three years. Global stocks took a breather on Thursday from the almost-unbroken rally that has run since early April, leaving the MSCI All-Country World index down 0.1 per cent, just below Wednesday's all-time high. In Europe, the STOXX 600 fell 0.8 per cent, led mostly by airlines and autos, given the strength in the oil price, while futures on the S&P 500 and Nasdaq fell 0.5 per cent. The US administration on Wednesday said US personnel were being moved out of the Middle East due to heightened security risks in the region, which briefly drove oil prices up by four per cent before they receded. "(A flare-up in tensions) is a significant tail risk, but I don't think it is anybody's baseline forecasts. So it's something to watch if there is a real escalation there, then markets will take fright and that would have ramifications for the oil price," Daiwa Capital economist Chris Scicluna said. Iran, for its part, said it will not abandon its right to uranium enrichment, a senior Iranian official told Reuters on Thursday, adding that a "friendly" regional country had alerted Tehran over a potential military strike by Israel. Classic safe-haven assets got a lift. The Swiss franc and the Japanese yen strengthened, pushing the dollar down by around 0.6 per cent against both currencies, while gold held firm at $US3,350 an ounce. The sense of relief stemming from a positive conclusion to US-China trade talks earlier this week, which President Donald Trump said was a "great deal with China", evaporated by Thursday. Adding yet another dose of uncertainty in the markets, Trump said the US would send out letters in one to two weeks outlining the terms of trade deals to dozens of other countries, which they could embrace or reject. "Markets may have no choice but to respond to Trump's tariff threat - even if it's just posturing to bring others to the table. The gap between 'risk-on' positioning and real-world risks has stretched too far," said Charu Chanana, chief investment strategist at Saxobank. Trump's erratic tariff policies have roiled global markets this year, prompting hordes of investors to exit US assets, especially the dollar, as they worried about rising prices and slowing economic growth. The euro, one of the beneficiaries of the dollar's decline, touched a seven-week high and was last at $US1.1535. US Treasuries also rallied in price, pushing yields down 1.5 basis points to below 4.4 per cent, while two-year yields, which are more sensitive to inflation and interest-rate expectations, eased 1.6 basis points to 3.93 per cent. Later in the day, the focus will be on a producer inflation report as some of the components feed into the Fed's preferred inflation gauge - the Personal Consumption Expenditure Index. Wednesday's consumer index kept alive the prospect of the Federal Reserve cutting rates by a quarter point, but only in September, as policymakers assess how tariffs work their way through the real economy. "I suspect it's probably going to be a combination of the two. Therefore it makes sense for the Fed to wait and see what happens rather than rushing into a rate cut," AMP Capital's head of investment strategy and chief economist Shane Oliver said. Oil, which has fallen by 20 per cent in the last year, eased by one per cent to $US69.07 a barrel, but remained near two-month highs, adding another moving part to the outlook for interest rates. The dollar has neared a 2025 low while stocks eased from record highs, as a cocktail of rising Middle East tensions and concern over the fragility of a trade truce between Washington and Beijing drew investors into safe-haven assets. Separately, a report on US consumer inflation on Wednesday showed overall price pressures remained contained in May, largely due to declines in the cost of gasoline, cars and housing. But most economists expect inflation to pick up as the impact of US tariffs begins to bite. The dollar, which has lost around 10 per cent in value against a basket of currencies this year, skimmed its lowest levels since late April, which in turn, marked its lowest level in three years. Global stocks took a breather on Thursday from the almost-unbroken rally that has run since early April, leaving the MSCI All-Country World index down 0.1 per cent, just below Wednesday's all-time high. In Europe, the STOXX 600 fell 0.8 per cent, led mostly by airlines and autos, given the strength in the oil price, while futures on the S&P 500 and Nasdaq fell 0.5 per cent. The US administration on Wednesday said US personnel were being moved out of the Middle East due to heightened security risks in the region, which briefly drove oil prices up by four per cent before they receded. "(A flare-up in tensions) is a significant tail risk, but I don't think it is anybody's baseline forecasts. So it's something to watch if there is a real escalation there, then markets will take fright and that would have ramifications for the oil price," Daiwa Capital economist Chris Scicluna said. Iran, for its part, said it will not abandon its right to uranium enrichment, a senior Iranian official told Reuters on Thursday, adding that a "friendly" regional country had alerted Tehran over a potential military strike by Israel. Classic safe-haven assets got a lift. The Swiss franc and the Japanese yen strengthened, pushing the dollar down by around 0.6 per cent against both currencies, while gold held firm at $US3,350 an ounce. The sense of relief stemming from a positive conclusion to US-China trade talks earlier this week, which President Donald Trump said was a "great deal with China", evaporated by Thursday. Adding yet another dose of uncertainty in the markets, Trump said the US would send out letters in one to two weeks outlining the terms of trade deals to dozens of other countries, which they could embrace or reject. "Markets may have no choice but to respond to Trump's tariff threat - even if it's just posturing to bring others to the table. The gap between 'risk-on' positioning and real-world risks has stretched too far," said Charu Chanana, chief investment strategist at Saxobank. Trump's erratic tariff policies have roiled global markets this year, prompting hordes of investors to exit US assets, especially the dollar, as they worried about rising prices and slowing economic growth. The euro, one of the beneficiaries of the dollar's decline, touched a seven-week high and was last at $US1.1535. US Treasuries also rallied in price, pushing yields down 1.5 basis points to below 4.4 per cent, while two-year yields, which are more sensitive to inflation and interest-rate expectations, eased 1.6 basis points to 3.93 per cent. Later in the day, the focus will be on a producer inflation report as some of the components feed into the Fed's preferred inflation gauge - the Personal Consumption Expenditure Index. Wednesday's consumer index kept alive the prospect of the Federal Reserve cutting rates by a quarter point, but only in September, as policymakers assess how tariffs work their way through the real economy. "I suspect it's probably going to be a combination of the two. Therefore it makes sense for the Fed to wait and see what happens rather than rushing into a rate cut," AMP Capital's head of investment strategy and chief economist Shane Oliver said. Oil, which has fallen by 20 per cent in the last year, eased by one per cent to $US69.07 a barrel, but remained near two-month highs, adding another moving part to the outlook for interest rates. The dollar has neared a 2025 low while stocks eased from record highs, as a cocktail of rising Middle East tensions and concern over the fragility of a trade truce between Washington and Beijing drew investors into safe-haven assets. Separately, a report on US consumer inflation on Wednesday showed overall price pressures remained contained in May, largely due to declines in the cost of gasoline, cars and housing. But most economists expect inflation to pick up as the impact of US tariffs begins to bite. The dollar, which has lost around 10 per cent in value against a basket of currencies this year, skimmed its lowest levels since late April, which in turn, marked its lowest level in three years. Global stocks took a breather on Thursday from the almost-unbroken rally that has run since early April, leaving the MSCI All-Country World index down 0.1 per cent, just below Wednesday's all-time high. In Europe, the STOXX 600 fell 0.8 per cent, led mostly by airlines and autos, given the strength in the oil price, while futures on the S&P 500 and Nasdaq fell 0.5 per cent. The US administration on Wednesday said US personnel were being moved out of the Middle East due to heightened security risks in the region, which briefly drove oil prices up by four per cent before they receded. "(A flare-up in tensions) is a significant tail risk, but I don't think it is anybody's baseline forecasts. So it's something to watch if there is a real escalation there, then markets will take fright and that would have ramifications for the oil price," Daiwa Capital economist Chris Scicluna said. Iran, for its part, said it will not abandon its right to uranium enrichment, a senior Iranian official told Reuters on Thursday, adding that a "friendly" regional country had alerted Tehran over a potential military strike by Israel. Classic safe-haven assets got a lift. The Swiss franc and the Japanese yen strengthened, pushing the dollar down by around 0.6 per cent against both currencies, while gold held firm at $US3,350 an ounce. The sense of relief stemming from a positive conclusion to US-China trade talks earlier this week, which President Donald Trump said was a "great deal with China", evaporated by Thursday. Adding yet another dose of uncertainty in the markets, Trump said the US would send out letters in one to two weeks outlining the terms of trade deals to dozens of other countries, which they could embrace or reject. "Markets may have no choice but to respond to Trump's tariff threat - even if it's just posturing to bring others to the table. The gap between 'risk-on' positioning and real-world risks has stretched too far," said Charu Chanana, chief investment strategist at Saxobank. Trump's erratic tariff policies have roiled global markets this year, prompting hordes of investors to exit US assets, especially the dollar, as they worried about rising prices and slowing economic growth. The euro, one of the beneficiaries of the dollar's decline, touched a seven-week high and was last at $US1.1535. US Treasuries also rallied in price, pushing yields down 1.5 basis points to below 4.4 per cent, while two-year yields, which are more sensitive to inflation and interest-rate expectations, eased 1.6 basis points to 3.93 per cent. Later in the day, the focus will be on a producer inflation report as some of the components feed into the Fed's preferred inflation gauge - the Personal Consumption Expenditure Index. Wednesday's consumer index kept alive the prospect of the Federal Reserve cutting rates by a quarter point, but only in September, as policymakers assess how tariffs work their way through the real economy. "I suspect it's probably going to be a combination of the two. Therefore it makes sense for the Fed to wait and see what happens rather than rushing into a rate cut," AMP Capital's head of investment strategy and chief economist Shane Oliver said. Oil, which has fallen by 20 per cent in the last year, eased by one per cent to $US69.07 a barrel, but remained near two-month highs, adding another moving part to the outlook for interest rates.
Zawya
08-04-2025
- Business
- Zawya
World stocks recover from a beating but the mood is fragile
World markets won a reprieve on Tuesday after three days of heavy selling that wiped trillions of dollars off the value of shares, but caution prevailed with focus on whether Washington might be willing to negotiate on some of its aggressive tariffs. Asia stocks bounced off 1-1/2 year lows, European shares rallied over 1.5% and U.S. stock futures pointed to a positive open for Wall Street where shares had fallen to their lowest in over a year on Monday before steadying. U.S. 10-year Treasury yields also steadied after posting their biggest one-day jump in a year on Monday and the dollar, which has taken a beating from the tariff turmoil, remained weak against other major currencies. "The mood is a little brighter, at least if you are looking at certain markets such as Japan which might be a priority for trade deal, but there is lots of uncertainty," said Chris Scicluna, head of economic research at Daiwa Capital Markets in London. "Markets could continue to be extremely volatile." Japan's blue-chip Nikkei stock index closed 6% higher, with Treasury Secretary Scott Bessent tasked with leading trade negotiations with Tokyo, viewed as a positive sign. In Europe, shares rose from 14-month lows and markets in London, Paris and Frankfurt were up more than 1% each, while oil was a touch firmer but kept Monday's four-year lows in sight. "Importantly, a little ray of sunshine is starting to emerge that gives hope that the U.S. is genuinely open to trade negotiations, (with) the most significant being Japan with Treasury Secretary Bessent," said Tapas Strickland, head of market economics at National Australia Bank. FRAGILE But less than a week since U.S. President Donald Trump unleashed sweeping tariffs that sent world markets into a tailspin, the mood remained fragile. The VIX stocks volatility index, often referred to as Wall Street's fear gauge, remained elevated at around 42 points -- albeit below Monday's peak just above 60. China's markets rose only modestly after the country's sovereign wealth funds stepped in to buy shares. Chip-export-dependent Taiwan's benchmark tumbled 4%, a day after suffering its worst fall on record. Thai stocks dropped nearly 5% in catch-up selling from a holiday on Monday, while Indonesia returned from a week-long holiday to 8% losses. The Chinese yuan fell to 7.3595 per dollar in the offshore market, the weakest in two months, before rebounding to be slightly stronger than Monday's close at 7.3393. The heightened uncertainty in markets wasn't helped by shifting headlines on trade as investors looked for respite from the sharp market volatility. "The impulsive nature of the administration means that market participants may still lack much conviction," said Marc Chandler, chief market strategist at Bannockburn Capital Markets. Trump also dug in his heels over China, vowing additional 50% levies if Beijing does not withdraw retaliatory tariffs on the United States. Beijing said on Tuesday it will never accept the "blackmail nature" of U.S. tariff threats. The European Commission said on Monday it had offered a "zero-for-zero" tariff deal to avert a trade war with the United States as EU ministers agreed to prioritise negotiations, while also striking back with 25% tariffs on some U.S. imports. DOLLAR FRAIL And in one sign of lingering unease, the dollar - often a safe-haven at times of uncertainty - softened around 0.2% against a basket of other currencies. The dollar eased 0.6% to 146.91. The euro firmed 0.2% to $1.0923, sterling also climbed a fifth of a percent, trading at $1.2749. The 10-year Treasury yield was lower in London trade after jumping some 17 bps on Monday as it bounced from six-month lows. Analysts said a number of reasons may have explained that sharp rise in U.S. bond yields including investors selling their most liquid assets to make up for falls elsewhere. On Tuesday, Japanese government bond yields rose off their own multi-month lows, with the 10-year yield rising almost 16 bps to 1.27%. Gold added almost 1% to $3,010 per ounce, although it was still well back from last Thursday's record peak at $3,167.57, reached in the immediate aftermath of Trump's "Liberation Day" tariff announcement. Brent crude futures were just 0.2% firmer at $64.35 per barrel, and U.S. West Texas Intermediate crude futures rose 0.3% to $60.89.
Globe and Mail
08-04-2025
- Business
- Globe and Mail
Premarket: Battered world markets bounce back as sentiment remains cautious
World markets won a reprieve on Tuesday after three days of heavy selling that wiped trillions of dollars off the value of shares, but the mood was cautious with a focus on whether Washington might negotiate on some of its aggressive tariffs. Asia stocks bounced off 1-1/2 year lows, European shares opened broadly higher and U.S. stock futures pointed to a positive open for Wall Street where shares fell to their lowest in over a year on Monday, before steadying. U.S. 10-year Treasury yields were steady after posting their biggest one-day jump in a year on Monday and the dollar, which has taken a beating from the tariff turmoil, remained weak against other major currencies. 'The mood is a little brighter, at least if you are looking at certain markets such as Japan which might be a priority for trade deal but there is lots of uncertainty,' said Chris Scicluna, head of economic research at Daiwa Capital Markets in London. 'Markets could continue to be extremely volatile.' Japan's blue-chip Nikkei stock index closed 6% higher, with Treasury Secretary Scott Bessent tasked with leading trade negotiations with Tokyo. In Europe, shares rose from 14-month lows and markets in London, Paris and Frankfurt were up more than 1% each, while oil held above four-year lows hit on Monday. 'Importantly, a little ray of sunshine is starting to emerge that gives hope that the U.S. is genuinely open to trade negotiations, (with) the most significant being Japan with Treasury Secretary Bessent,' said Tapas Strickland, head of market economics at National Australia Bank. But less than a week since U.S. President Donald Trump unleashed sweeping reciprocal tariffs that sent world markets into a tailspin, the mood remained fragile. The VIX stocks volatility index, often referred to as Wall Street's fear gauge, remained elevated at around 44 points -- albeit off Monday's peak just above 60. China's markets rose only modestly after the country's sovereign wealth funds stepped in to buy shares. Chip-export-dependent Taiwan's benchmark tumbled 5%, a day after suffering its worst fall on record. Thai stocks dropped nearly 6% in catch-up selling from a holiday on Monday, while Indonesia returned from a week-long holiday to 9% losses. The Chinese yuan fell to 7.3677 per dollar in the offshore market, the weakest in two months, before rebounding to be slightly stronger than Monday's close at 7.3393. The heightened uncertainty in markets wasn't helped by shifting headlines on trade as investors looked for respite from the sharp market volatility. Trump also dug in his heels over China, vowing additional 50% levies if Beijing does not withdraw retaliatory tariffs on the United States. Beijing said on Tuesday it will never accept the 'blackmail nature' of U.S. tariff threats. The European Commission said on Monday it had offered a 'zero-for-zero' tariff deal to avert a trade war with the United States as EU ministers agreed to prioritize negotiations, while also striking back with 25% tariffs on some U.S. imports. Safe havens the yen and the Swiss franc held near six-month highs on Tuesday while the U.S. dollar nursed broad losses. The dollar eased 0.5% to 147.08 yen. The euro jumped 0.3% to $1.0943, and sterling climbed 0.3% to $1.2757. The 10-year Treasury yield was lower in London trade after jumping some 17 bps on Monday as it bounced from six-month lows. Analysts said a number of reasons may have explained the sharp rise in U.S. bond yields on Monday including investors selling their most liquid assets to make up for falls elsewhere. On Tuesday, Japanese government bond yields rose off their own multi-month lows, with the 10-year yield up as much as 13 bps to 1.24%. Gold added 0.8% to $3,006 per ounce, although it was still well back from last Thursday's record peak at $3,167.57, reached in the immediate aftermath of Trump's 'Liberation Day' tariff announcement. Brent crude futures slipped 0.7% at $63.71 per barrel, and U.S. West Texas Intermediate crude futures dipped 0.6% to $60.33. Cryptocurrency bitcoin rose 1.2% to trade just below $80,000, after bouncing off a five-month low of $74,445.79 reached on Monday. Reuters
