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Business Recorder
13 hours ago
- Business
- Business Recorder
Pressure without clarity breeds market volatility
With the tariff reprieve deadline behind us and the long-promised Trump-Xi phone call still nowhere on the calendar, global markets are once again squinting at the smoke and worrying about another, bigger fire. President Trump, in a late-night Truth Social post, called Xi Jinping 'extremely hard to make a deal with' — not exactly the tone of a self-styled, delusionally confident dealmaker still expecting surrender. And it might not be just bluster this time. Behind the posturing, investor confidence is clearly slipping. Liberation Day tariffs are live again in the background, and no one really knows what comes next. The immediate question is what happens if that elusive Trump-Xi phone call never happens. Washington says it expects one this week. Beijing hasn't confirmed anything. And the market is left guessing. Meanwhile in Geneva, last month's tariff truce is already fraying. US officials claim China hasn't delivered on commitments related to rare earths. Beijing accuses the US of imposing new discriminatory restrictions, including fresh export controls on AI chip tools and revoking student visas. And round and round it goes all over again. In trade terms, the landscape is a minefield. The US is now actively blocking shipments of jet engine parts to China and tightening curbs on Huawei. And Trump's approval of Nippon Steel's $14 billion acquisition of US Steel has only inflamed domestic opposition, with American labour unions accusing the administration of selling out jobs and ignoring national security implications. Yet the bigger concern is what all this means for financial markets. With barely five weeks to go before the full slate of Trump's tariffs reactivates, safe-haven flows are already distorting capital allocations. Gold has surged again this week. Treasury yields are seesawing, and the dollar, while still dominant, is increasingly facing second-guessing in emerging market FX desks. If this impasse persists, wouldn't we be witnessing the first contours of a financial realignment? Emerging markets, in particular, are in the crosshairs. Trade-dependent economies that rely on stable commodity flows and predictable currency regimes are already jittery. Markets hate nothing more than uncertainty – not even bad news, which ultimately priced in – and with Trump's trade agenda now increasingly shaped more by timeline pressure than negotiation detail, who knows how all the chaos will be contained? Investors, meanwhile, are reacting with their feet. EM equities are posting net outflows week after week, and dollar debt spreads are widening despite relatively stable fundamentals in Asia and Latin America. Ultimately, it's Big Money's instinct for preservation, propagation and profit that dictates the direction of global markets – so, naturally, they start asking questions. For example, what if the Trump-Xi call doesn't happen? What if China, emboldened by its domestic stimulus and angry at Washington's hardening posture, chooses to escalate? Trump, for all his claims of being a master negotiator, has boxed himself into a timeline. Wednesday was the deadline for countries to submit alternate proposals to avoid tariffs, yet as of now, there is no grand deal, no summit, not even a scheduled call. And markets have noticed. The broader fear isn't just another round of US-China decoupling. It's that such fragmentation now coincides with other global flashpoints. Talks between the US and Iran have reportedly broken down. Israel is again talking of pre-emptive strikes on Iran. Ukraine is deepening shock strikes into Russia. Israel is again bombing Syria. The cruel death rattle in Gaza continues. The global risk map is lit up in more regions than at any point since the Cold War. Yet the cold calculus of financial markets means that its most frequently asked questions will not be about heartless murder of international law and innocent children in the Holy Land, but the fate of traditional safe havens that have protected the global financial elite's wealth for the last century. In this environment, can the dollar maintain its supremacy? On the one hand, geopolitical instability has always favoured the greenback. But on the other, the US now finds itself as a source of instability as much as a shelter from it. Japan has slowed its US debt purchases. Korea and Taiwan have been selling dollars to defend their currencies. Even the Hong Kong Monetary Authority is doing the unthinkable, diversifying away from Treasuries. The Trump administration might believe that pressure builds leverage. But from a macro-financial perspective, pressure without clarity breeds only volatility. Investors don't just fear tariffs. They fear that no one in the White House is sure what comes after them. The difference between a negotiating tactic and a policy vacuum matters deeply to markets, and guess which one we're dangerously close to right now? Meanwhile, domestic pressure is building. Labour unions are already speaking out against foreign takeovers. Congress is threatening oversight on national security grounds. The administration faces the risk of having overpromised on tariffs as a tool for reindustrialisation, and underdelivered on strategic clarity. In this moment, it is more about credibility than just trade. If Trump fails to get a substantive agreement with China, and the tariff regime reignites without a cohesive global response, then the damage won't be limited to commodities or manufacturing. It will be felt in bond markets, FX reserves, corporate risk models, and the very architecture of global trade planning. Can the world afford a tariff war in the middle of so many open geopolitical fronts? Can the US simultaneously confront Iran, contain China, support Ukraine, and reassure jittery investors? The question is no longer whether Trump will escalate. It is whether markets, allies, and adversaries are ready for the consequences. This week may provide an answer — or a prelude to a much more volatile second half of the year. Copyright Business Recorder, 2025
The Star
2 days ago
- Business
- The Star
Ringgit closes slightly higher against US$ on cautious sentiment
KUALA LUMPUR: The ringgit closed higher against the US dollar on Tuesday, as traders remain cautious ahead of United States (US) President Donald Trump and China's President Xi Jinping's expected meeting this week, said an analyst. At 6 pm, the local note inched higher to 4.2425/2485 versus the greenback from last Friday's close of 4.2530/2605. SPI Asset Management managing partner Stephen Innes said traders are slipping into a wait-and-see approach ahead of the Trump-Xi meeting, which could be a key factor in market risk for the rest of the week. "Given that the US is the world's leading importer and China its largest exporter, their relationship could shift market sentiment in favour of the dollar, easing concerns about supply chain disruptions and imported inflation. "This dynamic leaves emerging currencies like the ringgit in a reactive position -- caught between two economic superpowers whose trade decisions heavily influence global pricing trends,' he told Bernama. At the close, the ringgit traded lower against a basket of major currencies. It slipped against the Japanese yen to 2.9695/9739 from Friday's close of 2.9531/9585, eased vis-a-vis the euro to 4.8415/8484 from 4.8169/8254, and depreciated against the British pound to 5.7337/7418 from 5.7284/7385 previously. The local note traded mixed against its ASEAN peers. It was slightly higher versus the Indonesian rupiah at 260.1/260.6 compared to 260.4/261.1 on Friday, and gained against the Philippine peso to 7.61/7.63 from 7.62/7.64 previously. However, it fell against the Singapore dollar to 3.2967/3016 from 3.2938/3002 on Friday and weakened vis-a-vis the Thai baht to 13.0334/0603 from 12.9507/9790 previously. - Bernama
Straits Times
2 days ago
- Business
- Straits Times
Singapore stocks climb on the prospects of Trump-Xi talks this week
The benchmark Straits Times Index rose 0.1 per cent or 3.79 points to 3,894.38. ST PHOTO: BRIAN TEO Singapore stocks climb on the prospects of Trump-Xi talks this week SINGAPORE – Local stocks ended higher on June 3 as investors anticipated possible trade talks between China and the United States, with the confirmation that tariffs on some Chinese goods will be extended till Aug 31. The benchmark Straits Times Index (STI) rose 0.1 per cent or 3.79 points to 3,894.38. In the broader market, gainers beat losers 313 to 192 as 1.1 billion securities worth $1.33 billio n changed hands. Regional indexes were mixed on June 3. Hong Kong's Hang Seng Index jumped 1.5 per cent. Japan's Nikkei 225 fell 0.1 per cent, while the Bursa Malaysia Kuala Lumpur Composite Index dropped 0.3 per cent. Hopes that US President Donald Trump will speak with his Chinese counterpart Xi Jinping – possibly this week – gave investors anticipation for a positive outcome. In a note, Maybank analysts said: 'Political analysts have suggested that China could have the upper hand as its grip on chip supply chains and rare earths could boost its leverage.' However, lingering uncertainty over the US' deficit and trade continued to weigh on the greenback even as Treasuries yields rose. The top gainer on the STI was marine vessel manufacturer Yangzijiang Shipbuilding, which surged 4.3 per cent, or $0.09, to $2.21. The index was dragged by DFI Retail Group, which slipped 2.2 per cent, or US$0.06, to US$2.65. This comes after the group on May 30 announced its divestment of 22.2 per cent – or about 315.3 million – of Robinsons Retail's outstanding shares for an undisclosed sum. The group was a significant minority shareholder in Robinsons Retail. The trio of local banks were in the red on June 3. DBS Bank fell 0.1 per cent or $0.06 to $44.80. UOB retreated 0.6 per cent or $0.22 to $35.33, while OCBC Bank slipped 0.4 per cent or $0.07 to $16.16. THE BUSINESS TIMES Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
2 days ago
- Business
- Business Times
Market Focus Daily: Tuesday, June 3, 2025
Asian markets mixed as traders eye possible Trump-Xi talks; Gold hovers near four-week peak on weaker US dollar, trade concerns; Widjaja family's Sinarmas Land offer closes with 98.65% resultant shareholding. Synopsis: Market Focus Daily is a closing bell roundup by The Business Times that looks at the day's market movements and news from Singapore and the region. Written and hosted by: Emily Liu (emilyliu@ Produced and edited by: Chai Pei Chieh & Claressa Monteiro Produced by: BT Podcasts, The Business Times, SPH Media --- BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Follow BT Market Focus and rate us on: Channel: Amazon: Apple Podcasts: Spotify: YouTube Music: Website: Feedback to: btpodcasts@ Do note: This podcast is meant to provide general information only. SPH Media accepts no liability for loss arising from any reliance on the podcast or use of third party's products and services. Please consult professional advisors for independent advice. Discover more BT podcast series: BT Money Hacks at: BT Correspondents: BT Podcasts: BT Branded Podcasts: BT Lens On:
Malaysian Reserve
3 days ago
- Business
- Malaysian Reserve
China 'firmly rejects' US claim that it violated tariff deal
BEIJING — China said Monday it 'firmly rejects' US claims that it had violated a sweeping tariffs deal, as tensions between the two economic superpowers showed signs of ratcheting back up. Beijing and Washington last month agreed to slash staggeringly high tariffs on each other for 90 days after talks between top officials in Geneva. But top Washington officials last week accused China of violating the deal, with Commerce Secretary Howard Lutnick saying Beijing was 'slow-rolling' the agreement in comments to 'Fox News Sunday'. China hit back Monday, saying Washington 'has made bogus charges and unreasonably accused China of violating the consensus, which is seriously contrary to the facts'. 'China firmly rejects these unreasonable accusations,' its commerce ministry said in a statement. US President Donald Trump said last week that China had 'totally violated' the deal, without providing details. Beijing's commerce ministry said it 'has been firm in safeguarding its rights and interests, and sincere in implementing the consensus'. It fired back that Washington 'has successively introduced a number of discriminatory restrictive measures against China' since the Geneva talks. The ministry cited export controls on artificial intelligence chips, curbs on the sale of chip design software and the revocation of Chinese student visas in the United States. 'We urge the US to meet China halfway, immediately correct its wrongful actions, and jointly uphold the consensus from the Geneva trade talks,' the ministry said. If not, 'China will continue to resolutely take strong measures to uphold its legitimate rights and interests,' it added. Trump-Xi talks? US officials have said they are frustrated by what they see as Chinese foot-dragging on approving export licences for rare earths and other elements needed to make cars and chips. But Washington's Treasury Secretary Scott Bessent looked to ease the pressure on Sunday, saying the two sides could arrange a call between their respective heads of state to resolve their differences. 'I'm confident… this will be ironed out' in a call between Trump and Chinese President Xi Jinping, Bessent said on CBS's 'Face the Nation'. He added, however, that China was 'withholding some of the products that they agreed to release', including rare earths. On when a Trump-Xi call could take place, Bessent said: 'I believe we will see something very soon.' China has been less forthcoming, and the commerce ministry's statement on Monday did not mention any planned conversations between the two leaders. The Geneva deal was 'an important consensus reached by the two sides on the principle of mutual respect and equality, and its results were hard-won', the ministry said. It warned Washington against 'going its own way and continuing to harm China's interests'. Global stocks finished mixed on Friday after Trump made his social media post accusing Beijing. The Hong Kong stock exchange was down around 2 percent shortly after opening on Monday. — AFP
