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Business Recorder
2 days ago
- Business
- Business Recorder
Australia, NZ dollars climb as US-EU trade deal bolsters risk sentiment
SYDNEY: The Australian and New Zealand dollars climbed on Monday, as relief over a U.S. trade deal with the European Union underpinned risk sentiment at the start of a pivotal week. The two currencies - often traded as proxies for global risk - have been grinding higher in recent weeks, tracking the buoyancy in equities. Investors now turn their attention to the Stockholm meeting between senior U.S. and Chinese negotiators on Monday, aimed at extending the tariff truce between the world's two biggest economies. Australia's all-important quarterly inflation reading, due on Wednesday, will make or break the case for a rate cut next month. The Federal Reserve's policy decision on Wednesday, Washington's August 1 deadline for trade negotiations and a U.S. jobs report on Friday will also influence market sentiment. The Aussie rose 0.2% to $0.6575, having finished last week with a gain of 0.9%. It is perched not far from a nearly nine-month top of $0.6625, with its upward trend still intact. The kiwi dollar edged up 0.1% to $0.6018, after rallying 0.9% last week to as high as $0.6059. It is, however, still some distance away from its nine-month peak of $0.6120, with support at 60 cents. Currency market reactions to the U.S.-EU deal, which includes a 15% tariff on EU goods, were muted, with the euro inching up 0.1%. European stock futures suggested a near 1% rise in shares when markets open. Kristina Clifton, a senior currency strategist at the Commonwealth Bank of Australia, expects the Aussie to extend its gains towards resistance at 67 cents if U.S. trade developments are perceived to be positive for risk sentiment. 'The critical Australian Q2 25 CPI can also inject some intraday volatility into AUD/USD.' The Reserve Bank of Australia has been waiting for the second quarter CPI report to confirm that the inflation beast has been tamed. Forecasts are centred on a 0.7% quarterly rise in the policy relevant trimmed mean measure, a tad higher than what the central bank was expecting. A major upside surprise could deal a blow to hopes for an August rate cut. Markets are again pricing in a near certain chance that the RBA will lower rates by a quarter point to 3.6% on August 19, having been caught totally wrongfooted just this month. 'A 0.8% q/q would present a challenge for the Board, given its desire to wait for the Q2 CPI, along with other data and updated staff forecasts,' ANZ analysts said. 'That's not our expectation, however,' ANZ said, with a forecast of a 0.6% rise in the trimmed mean measure.
Reuters
22-07-2025
- Business
- Reuters
Asian stocks waver as investors look to tariff negotiations, earnings
SINGAPORE, July 22 (Reuters) - Asian share markets drifted lower after scaling a near four-year peak on Tuesday ahead of a slate of corporate earnings, while investors took stock of tariff negotiations between the U.S. and its trading partners. The dithering mood is set to continue in Europe where the focus will be on earnings from firms including SAP ( opens new tab and UniCredit ( opens new tab. EUROSTOXX 50 futures and DAX futures both dipped 0.5%, while FTSE futures eased 0.3%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab hit its highest level since October 2021 in early Asian hours but was last down 0.4%. The index is up nearly 16% this year. The S&P 500 (.SPX), opens new tab and the Nasdaq (.IXIC), opens new tab notched record-high closes on Monday. The Japanese markets returned to action after a holiday on Monday following the weekend's election where the ruling coalition suffered a defeat in upper house elections, although Prime Minister Shigeru Ishiba vowed to remain in his post. Japanese shares (.N225), opens new tab, (.TOPX), opens new tab briefly jumped at the open but reversed course to trade lower by Tuesday afternoon, as the election results were largely priced in and were not as bad as investors had feared. The yen rallied 1% on Monday, recouping some of the losses from past weeks and was last slightly weaker at 147.73 per dollar. Kristina Clifton, an economist at the Commonwealth Bank of Australia, said the weakening of Ishiba's leadership will open the door to more fiscal expansion that is negative for Japanese assets, including the yen. "The bottom line is longer term Japanese government bond yields and JPY can fall if concerns about Japan's fiscal spending deepen." Investor focus has been on tariff negotiations ahead of the August 1 deadline with the European Union exploring a broader set of possible countermeasures against the United States as prospects for an acceptable agreement with Washington fade. The most important deals for the global outlook are with the EU and Japan, CBA's Clifton said. "The USD reaction to the announcement of trade deals with these countries would depend on the details of the deals in our view," Clifton added, noting the dollar could turn down again against the euro and the British pound. The euro was steady at $1.1689, after rising 0.5% in the previous session but still away from the near four-year high it touched at the start of the month. The single currency is up 13% this year as investors look for alternatives to U.S. assets bruised by tariff uncertainties. The dollar index , a measure against six other key currencies, was at 97.905. Investors are awaiting results this week from Wall Street giants Alphabet and Tesla (TSLA.O), opens new tab, as well as from European heavyweights LVMH ( opens new tab, and Roche (ROG.S), opens new tab, as uncertainty over tariffs clouds the outlook. The rumblings around the Federal Reserve's independence and whether U.S. President Donald Trump will fire Fed Chair Jerome Powell have kept investors on tenterhooks in recent weeks. Trump appeared near the point of trying to fire Powell last week, but backed off with a nod to the market disruption that would likely follow. U.S. Treasury Secretary Scott Bessent said on Monday the entire Federal Reserve needed to be examined as an institution and whether it had been successful, further exacerbating concerns about the independence of the U.S. central bank. The Fed is widely expected to hold rates steady in its July meeting but might lower rates later in the year. Market focus will be squarely on Powell's speech later on Tuesday for clues about when the Fed might ease policy. Goldman Sachs strategists expect the Fed to deliver three consecutive 25-basis-point cuts starting in September, "provided inflation expectations remain in check amidst worries about Fed independence." In commodities, Brent crude futures fell nearly 1% to $68.56 a barrel, while U.S. West Texas Intermediate crude slipped 1% to $66.51 per barrel.
Yahoo
22-07-2025
- Business
- Yahoo
Asian stocks firm as investors look to tariff negotiations, earnings
By Ankur Banerjee SINGAPORE (Reuters) -Asian share markets held their ground near a four-year peak on Tuesday, buoyed by Wall Street's closing record high ahead of a slate of corporate earnings while investors took stock of tariff negotiations between the U.S. and its trading partners. The Japanese markets returned to action after a holiday in the previous session following the weekend's election where the ruling coalition suffered a defeat in upper house elections, although Prime Minister Shigeru Ishiba vowed to remain in his post. Japanese shares briefly jumped at the open before trading modestly higher, while bonds had a muted reaction as the election results were largely priced in and were not as bad as investors had feared. The yen rallied 1% on Monday, recouping some of the losses from past weeks and was last little changed at 147.46 per dollar on Tuesday. Kristina Clifton, an economist at the Commonwealth Bank of Australia, said the weakening of Ishiba's leadership will open the door to more fiscal expansion which is negative for Japanese assets, including the yen. "The bottom line is longer term Japanese government bond yields and JPY can fall if concerns about Japan's fiscal spending deepen." MSCI's broadest index of Asia-Pacific shares outside Japan hit its highest level since October 2021 in early Asian hours but was last little changed. The index is up nearly 16% this year. Overnight, the S&P 500 and the Nasdaq notched record-high closes on Monday, lifted by Alphabet and other megacaps ahead of a burst of earnings reports this week. Investor focus has been on tariff negotiations ahead of the August 1 deadline with the European Union exploring a broader set of possible countermeasures against the United States as prospects for an acceptable agreement with Washington fade. The most important deals for the global outlook are with the EU and Japan, CBA's Clifton said. "The USD reaction to the announcement of trade deals with these countries would depend on the details of the deals in our view," Clifton said, noting the dollar could turn down again against the euro and the British pound. The euro was steady at $1.1689, after rising 0.5% in the previous session but still away from the near four-year high it touched at the start of the month. The single currency is up 13% this year as investors look for alternatives to U.S. assets bruised by tariff uncertainties. The dollar index measure against six other key currencies was at 97.905. [FRX/] The rumblings around the Federal Reserve's independence and whether U.S. President Donald Trump will fire Fed Chair Jerome Powell have kept investors on tenterhooks in recent weeks. Trump appeared near the point of trying to fire Powell last week, but backed off with a nod to the market disruption that would likely follow. U.S. Treasury Secretary Scott Bessent on Monday said the entire Federal Reserve needed to be examined as an institution and whether it had been successful, further exacerbating worries about the independence of the U.S. central bank. The Fed is widely expected to hold rates steady in its July meeting but might lower rates later in the year. Market focus will be squarely on Powell's speech later on Tuesday for clues about when the Fed might ease policy. Goldman Sachs strategists expect the Fed to deliver three consecutive 25-basis-point cuts starting in September, "provided inflation expectations remain in check amidst worries about Fed independence." In commodities, oil prices edged lower on concerns that the brewing trade war between major crude consumers the U.S. and the European Union will curb fuel demand. Brent crude futures fell 0.35%, to $68.97 a barrel, while U.S. West Texas Intermediate crude eased 0.31% to $66.99 per barrel. [O/R]
Wall Street Journal
22-07-2025
- Business
- Wall Street Journal
Asian Currencies Mostly Weaken as Traders Await Tariff Developments
0034 GMT — Asian currencies mostly weaken against the dollar in the morning session as traders await tariff developments. The WSJ reported that the EU still wants a deal, but with U.S. demands growing, the bloc is readying a counterattack. 'Apart from China, who have a longer deadline, the most important deals for the global outlook are with the EU and Japan,' CBA's Kristina Clifton says in a research report. The USD's reaction to any announcements of trade deals with them would depend on the details of the deals, the senior economist and senior currency strategist says. USD/JPY is 0.1% higher at 147.52, USD/KRW is up 0.1% at 1,384.22, and AUD/USD is down 0.1% at 0.6522, FactSet data show. (
The Star
27-05-2025
- Business
- The Star
Asian shares start cautiously, dollar edges down
NEW YORK: Asian shares had a cautious open Tuesday (May 27) as investors awaited fresh trade news that may define the appetite for US assets. The MSCI Asia Pacific Index opened flat with marginal declines in Japan and South Korea. The dollar edged down in early Asian trade with a gauge of the greenback's strength hovering near its lowest level in almost two years on weak demand for US assets. The yield on the ten-year US Treasury fell two basis points while yields on Japan's 40-year sovereign slumped ahead of a bond auction. Contracts for the S&P 500 and Nasdaq 100 jumped over one per cent, holding their gains from a Monday holiday, after the European Union agreed to accelerate trade negotiations with the US. Tariff headlines are once again dominating the market and investors are closely watching how President Donald Trump's administration is dealing with Japan and India after talks with China earlier this month boosted optimism. Trade tensions and concerns of US fiscal position has weakened demand for US assets and are showing up the most in the dollar. "Any further tariff news could inject more volatility into currency markets and pull the dollar down,' Kristina Clifton, a senior economist and currency strategist at Commonwealth Bank of Australia wrote in note. Bloomberg's dollar spot index was track for its lowest close since July 2023, while the greenback is at or approaching key levels against a host of currencies including the euro, British pound, yen and Swiss franc. In Japan, yields on Japanese super-long bonds fell ahead of an auction Wednesday that is expected to test demand following a recent sale that sent jitters through global markets. Yields on 40-year and 30-year maturities slid ten basis points in Tokyo on Tuesday, adding to drops in recent days. These moves followed sharp gains in yields to record highs last week. Elsewhere, China's central bank asked its major lenders to raise the share of yuan when facilitating cross-border trade, in its latest push for the use of the currency as the world grapples with the onslaught of tariffs by the US. Trump's plan to bring more factories back to the US has President Xi Jinping's government also considering options to boost production of high-end technological goods. There will be close attention on the nation's electric vehicle sector, after BYD Co. introduced sweeping price cuts. Shares of China's No. 1 selling car brand tumbled 8.6 per cent in Hong Kong on Monday, sending shares of peers Li Auto Inc., Great Wall Motor Co. and Geely Automobile Holdings Ltd. also down amid investor concern about intensifying competition in the sector. A key event this week will be Nvidia Corp.'s results on Wednesday. The chip-making giant is seen as a bellwether for so called growth stocks and the sustainability of the artificial intelligence boom. Its outlook will be crucial given macro risks and tariff uncertainty. Investors are also gearing up for the Federal Reserve's preferred inflation measure, the US personal consumption expenditures price index excluding food and energy, which will be released Friday. The April reading is forecast to rise 0.1 per cent based on consensus expectations. In commodities, oil slipped on Tuesday after fluctuating in the previous session as the market weighed easing trade tensions against the outlook for rising OPEC+ supply. Gold traded steady. - Bloomberg
