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International Business Times
2 days ago
- Business
- International Business Times
Global Markets Surge as US-EU Trade Deal Eases Investor Anxiety
The global stock benchmarks opened the week with firm gains, driven by a return of investor risk appetite after progress on trade talks between the US and EU. Futures tracking the S&P 500 in the United States rose 0.45%, while those for the Nasdaq gained 0.5%, pointing to a robust start on Wall Street. European stock futures were also up by almost 1%, supported by the relief in trade tensions. The MSCI's broadest index of shares outside Japan rose 0.27% in Asia, remaining close to the four-year high it touched last week. Japan's Nikkei index declined 0.8%, pulling back after its recent rally to a one-year peak. The euro rose significantly against the U.S. dollar, British pound, and Japanese yen as the market welcomed the deal, reflecting market's positive response to the deal. US-EU Trade Agreement Brings Relief Markets rallied on news that the United States and the European Union had reached a framework trade deal. Under the deal, the administration agreed to apply a 15% tariff on most European goods entering the United States, well below the 30% rate it had previously threatened. The deal is regarded as a compromise with gains for both countries, and it diminishes the near-term risk of a full-blown trade war. freepik The U.S. had also recently reached a similar pact with Japan to reduce vehicle import tariffs. These back-to-back deals are part of a broader effort by the Trump administration to wrap up global trade before the August 1 deadline. Meantime, the U.S. and China have opened trade talks in Stockholm with hopes of extending their current ceasefire on tariffs. Clarity Brings Optimism to investors Market analysts say the recent agreement with Europe has added some clarity to businesses and investors struggling through months of uncertainty. "This deal defuses a significant risk and is part of a broader move back toward stability and predictability in trade policy," said Marc Velan, head of investments at Lucerne Asset Management. European leaders had previously hoped for a zero-tariff agreement, but the new 15% rate is considered a positive result compared to the 30% that was on the horizon. Investors are also viewing the trade news as a sign that the U.S. is choosing diplomacy over belligerent trade moves. China's CSI 300 index in Asian markets added 0.3%, led by gains in financials and in the consumer sector. Hong Kong's Hang Seng index rose 0.75%, and the Australian dollar, which is often used as a liquid proxy for global risk, was near an eight-month peak at $0.657. Focus Shifts to Fed and BOJ With the trade tensions easing, investors are turning their attention to two key central bank meetings scheduled this week, one from the U.S. Federal Reserve and another from the Bank of Japan. Both central banks are anticipated to keep interest rates on hold, but traders will be listening closely for any indications as to what comes next, particularly given shifting inflation data. The White House is keeping up the pressure on the Federal Reserve. President Trump has regularly lambasted Fed Chair Jerome Powell for keeping interest rates high and failing to do enough to pump up the economy. Two of Trump's Fed Board appointees have signaled that they would be open to lowering rates if inflation stays low. Economists say that the Fed's direction will probably be influenced by future economic data. "The PCE inflation index and July jobs report are going to be crucial to shape expectations post this meeting," said Kieran Williams, head of Asia FX at InTouch Capital Markets. If inflation keeps cooling, a policy change might be postponed until September. Oil Jumps, Gold Slides, as Risk Assets Rally The commodities market was also buoyed by the better trade outlook. Oil prices inched up, with Brent crude and U.S. West Texas Intermediate both up about 0.5%. The increases were largely on expectations for stronger demand and less global trade friction after the U.S.-EU deal.
Al Etihad
3 days ago
- Business
- Al Etihad
Stocks surge, euro steady after US-EU trade agreement
28 July 2025 10:12 SINGAPORE (REUTERS)Global stocks rose and the euro appreciated on Monday after a trade agreement between the United States and the European Union lifted sentiment and provided some clarity in a week of key policy meetings by the Federal Reserve and the Bank of US struck a framework trade agreement with the European Union, imposing a 15% import tariff on most EU goods - half the threatened rate, a week after agreeing to a similar trade deal with are scrambling to finalise trade deals ahead of an August 1 deadline set by US President Donald Trump, with talks between the US and China set for Monday in Stockholm amid expectations of another 90-day extension to the truce between the world's top two futures surged more than 1%, while S&P 500 futures rose 0.5% and Nasdaq futures advanced 0.6%.The euro strengthened across the board, rising against the dollar, sterling and broadest index of Asia-Pacific shares outside Japan was up 0.32%, just shy of the almost four-year high it touched last week. Japan's Nikkei fell 1% after hitting a one-year high last the baseline 15% tariff will still be seen by many in Europe as too high, compared with Europe's initial hopes to secure a zero-for-zero tariff deal, it is better than the threatened 30% US-EU deal provides clarity to companies and averts a bigger trade war between the two allies that account for almost a third of global trade."A major tail-risk has now been defused," said Marc Velan, head of investments at Lucerne Asset Management in Singapore."Markets are interpreting this as a sign of stability and predictability returning to trade policy," he for China's blue-chip stocks petered out towards the midday Australian dollar, often seen as a proxy for risk appetite, was at $0.657, hovering around the near eight-month peak scaled last commodities, oil prices rose after the US-EU trade agreement. Brent crude futures and U.S. West Texas Intermediate crude both rose 0.5%. Gold prices fell on Monday to their lowest in nearly two weeks on reduced appetite for safe havens.
