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Euronews
12 hours ago
- Business
- Euronews
Trump's 30% tariffs threaten to burst Europe's bullish trade
Europe's economic optimism is facing a critical test as former US President Donald Trump's unexpected threat to impose a 30% blanket tariff on EU exports from 1 August reignites fears of a transatlantic trade war. With markets heavily positioned for a European growth renaissance fuelled by fiscal expansion, any escalation could reverse months of investor confidence and spark sharp corrections in European assets. While European officials hope to de-escalate tensions before the deadline, the threat has already introduced significant policy uncertainty at a time when sentiment on European equities and the euro is riding high. Goldman Sachs: Tariffs could hit Eurozone GDP by 1.2% According to Goldman Sachs, if the full 30% tariff package is implemented and sustained, it would raise the US effective tariff rate on EU goods to 26 percentage points, up from the current 8.5. The investment bank warns that this could result in a cumulative 1.2% decline in eurozone GDP by end-2026, with the most acute impact likely to materialise in the next few quarters. Even under Goldman's baseline scenario, which assumes a negotiated outcome retaining sector-specific tariffs and adding new levies on critical goods like pharmaceuticals and aviation components, the eurozone would still face a 0.6% GDP hit. 'Much of the current strength in manufacturing reflects front-loading ahead of tariffs,' said Sven Jari Stehn, chief European economist at Goldman Sachs. "Combined with the ongoing appreciation of the Euro, we see little growth in the second half," Stehn added. Stehn expects the EU to respond gradually to a 30% across-the-board tariff, likely beginning on the day the new US duties take effect — potentially increasing the risk of further trade escalation. EU holds fire, for now, but prepares countermeasures Despite the economic risks, Brussels is opting for restraint. An EU spokesperson confirmed on Tuesday that the bloc has no intention to implement countermeasures before 1 August. Nonetheless, preparations for retaliation are under way. The EU's trade representative Maroš Šefčovič warned that 30% tariffs would make transatlantic sales "almost impossible", and confirmed that Brussels has drafted a new package of rebalancing measures worth €72 billion in imports from the US, complementing the existing rebalancing measures for steel and aluminium. German Chancellor Friedrich Merz struck a cautious tone, saying: 'The EU is refraining from countermeasures for now, but the US should not underestimate our willingness to respond.' 'The goal is a quick solution,' Merz added. A bullish Europe trade under threat The latest Trump's tariff threat lands at a pivotal moment for market sentiment. Since the start of the year, the euro has surged over 11% against the US dollar, marking its strongest first-half performance since the currency's inception. European equities, measured by the EURO STOXX 600, have gained 10%, outperforming the S&P 500 by 4 percentage points. Bank of America's July European Fund Manager Survey showed investors overwhelmingly bullish on Europe. A net 44% expect stronger eurozone growth in the coming 12 months, up from 29% in June, driven largely by Germany's landmark €500bn infrastructure programme and broader fiscal easing. Investor exposure to eurozone equities is at a four-year high, with a net 41% of fund managers overweight, up from just 1% in January. The euro itself has become heavily overbought, with a net 20% overweight — the highest since January 2005 — after the fastest six-month positioning reversal on record. Sector preferences in the Bank of America's survey showed a strong tilt towards cyclicals, banks, and German equities, with autos and basic resources among the most underweighted. The sharp positioning shift reflects a belief that European macro fundamentals can decouple from US policy headwinds, with 63% of respondents viewing fiscal expansion as powerful enough to shield the bloc from Trump-induced turbulence. But the risk now is that these bullish expectations could unravel swiftly if the tariffs are implemented, triggering a sharp deterioration in sentiment, earnings outlooks, and growth momentum across the eurozone.
Express Tribune
13 hours ago
- Business
- Express Tribune
Gold dips slightly, rupee inches up
Listen to article Gold prices in Pakistan fell on Tuesday, mirroring a downturn in the international market as investors reacted cautiously to fresh US inflation data and awaited clarity on potential trade tariffs. According to the All Pakistan Sarafa Gems and Jewellers Association, the price of gold declined by Rs700 per tola, settling at Rs359,000. Similarly, the rate for 10 grams dropped by Rs600 to Rs307,784. The price per tola experienced a dip after an increase the previous day, when it surged by Rs1,600 to reach Rs359,700. Internationally, gold inched lower as the US Consumer Price Index (CPI) data showed a 0.1% uptick in inflation for June, in line with expectations but still keeping interest rate cut hopes subdued. Investors also remained wary of potential tariff announcements amid renewed trade rhetoric from US President Donald Trump. Spot gold fell 0.2% to $3,336.99 per ounce by 0940 am EDT (1340 GMT). US gold futures were down 0.4% to $3,345. The US dollar ticked up 0.2%, making gold more expensive for holders of other currencies. "I think the market continues to be focused on tariffs, keeping gold underpinned. I remain bullish on gold, even though we're well within the range that has been in place since the middle of May," said Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals. "The market isn't slow – it's just moderate," Adnan Agar, Director at Interactive Commodities, told The Express Tribune. "Activity has been consistent over the past three to four days," he noted. "Today's (Tuesday's) high was $3,366 and we're trading near the day's low at $3,334." Agar attributed the dip to inflation data, which reduced the likelihood of an early interest rate cut by the US Federal Reserve. "With inflation edging up, the probability of a rate cut has now shifted further out – possibly to September 2025," he said. He added that the ongoing uncertainty around US tariff policy could continue to influence the market over the coming months. "If gold dips further, possibly to the $2,800-3,000 range, it will present a buying opportunity. In the long term, gold remains on an upward trajectory – perhaps by the end of this year or into next." Meanwhile, the Pakistani rupee recorded a marginal appreciation against the US dollar on Tuesday, appreciating by 0.02% in the inter-bank market. By the end of the trading session, the rupee closed at 284.67, up by five paisa from the previous day's close at 284.72. The US dollar remained near a three-week high against major global currencies as investors looked ahead to key US inflation data expected later in the day, which could offer insights into the future course of monetary policy.
IOL News
a day ago
- Business
- IOL News
SASSA under fire over grant review process amid complaints from beneficiaries
Civil society group Black Sash has condemned SASSA for "failing" thousands of social grant recipients Image: File Civil society group Black Sash has condemned SASSA for failing thousands of social grant recipients, saying many have had their payments delayed without a clear explanation or proper notice. The watchdog has also called for a pause in the ongoing review process, citing widespread confusion and distress among beneficiaries. "Despite the CEO's claim that no grants have been suspended, we are witnessing a surge in complaints from beneficiaries who have been cut off without a clear explanation or notification. "Our Community Monitoring teams, based across the country and our national Helpline have been overwhelmed with distress calls from elderly persons, people with disabilities and caregivers, many of whom only discovered their grants had been 'flagged' when their money failed to appear" The advocacy group also argued that the situation was further exacerbated by the impact of bank verification checks on Older Persons' grants, which also impacted grant payment delays and added to the fear, confusion, and queues at SASSA local offices. Black Sash's message was in response to SASSA' CEO, Themba Matlou, who, during a press briefing on Monday, defended the agency's review process as necessary for verifying eligibility and combating fraud. "SASSA would like to categorically state that no social grant payments have been suspended or halted. All approved grants remain valid, andpayments continue to be processed. Any beneficiary with an active andvalid grant remains entitled to receive their payment," Matlou said. "This year, we have only introduced and implemented a 4th payment date to our payment schedule, where beneficiaries targeted for a review are paid on the 4th day". Matlou added that this "would ensure that they receive their payment after the necessary review, without prejudicing the general payment cycle for others,". In an interview on 702 on Monday, SASSA's Executive Manager for Grants Administration, Brenton van Vrede, provided further clarity on what constitutes 'additional income' and how beneficiaries are selected for review. He explained that only formal incomes, such as salaries, rental income, or court-ordered maintenance, count towards the means test. 'Maintenance is considered as income, but most people don't formalise that arrangement. So, it wouldn't be considered additional income unless there's a maintenance agreement.' Regarding income thresholds, Van Vrede specified: 'The means test threshold for the child support grant is R5,600, and the old age grant is almost R9,000, R8,990.' He added that rental income or any other income pushing beneficiaries over these limits could result in ineligibility for grants. 'If that rental income takes them over the threshold, then they won't qualify for the grant.' IOL News [email protected] Get your news on the go, click here to join the IOL News WhatsApp channel
Business Recorder
2 days ago
- Business
- Business Recorder
Gold prices pick up
KARACHI: Gold posted a modest increase in the local market on Monday, reflecting world bullion upward momentum - up by $16 to reach $3,372 per ounce, traders said. The rising trend moved the local gold prices up by Rs1,600 to Rs359,700 per tola and Rs1,371 to settle at Rs308,384 per 10 grams, All Pakistan Sarafa Gems and Jewellers Association said. Domestic and international silver prices also followed the uptrend, growing by Rs65 to Rs4,087 per tola and Rs40 to Rs3,503 per 10 grams. Global market was trading silver at $39 per ounce, the association added. Copyright Business Recorder, 2025
Express Tribune
2 days ago
- Business
- Express Tribune
Rupee slides further on imports, SBP dollar buying
The Pakistani rupee continued its downward trajectory against the US dollar, weakening by 0.09% in the inter-bank market on Monday. According to the State Bank of Pakistan (SBP), the local currency closed at 284.72, marking a depreciation of 26 paisa from the previous close. Last week, the rupee had also recorded losses, slipping by 49 paisa, or 0.17%, over the course of the week at 284.46 against the dollar. Arif Habib Ltd Deputy Head of Trading Ali Najib told The Express Tribune that the weakness stems from persistent demand for the dollar amid rising import payments, profit repatriation by multinationals and cautious sentiment ahead of upcoming external debt repayments. In addition, the SBP is also consistently buying the US dollar from the market, taking its intervention to over $6 billion in 8MFY25, a deliberate strategy to rebuild forex reserves, driven by strong remittances, IMF funding and debt rollover considerations. Despite improving forex reserves, speculative activity and global dollar strength continue to weigh on the rupee. "Without stronger inflows or policy tightening, the currency may face further mild depreciation in the short term," said Najib. Meanwhile, gold prices in Pakistan recorded a mild increase on Monday, tracking gains in the international market, where the yellow metal steadied after hitting a three-week high amid renewed focus on trade tensions and upcoming US economic data. Meanwhile, silver surged to its highest level since September 2011. According to the All Pakistan Sarafa Gems and Jewellers Association, the price of gold per tola rose by Rs1,600 to settle at Rs359,700. The price of 10-gram gold climbed by Rs1,371 to Rs308,384. Spot silver gained 1.1% to $38.78 per ounce, hitting its highest level since September 2011 earlier in the session. The local rate was recorded at Rs4,087 per tola for 24-karat silver. Analysts attributed the move to geopolitical and economic uncertainties. Interactive Commodities Director Adnan Agar said gold prices reacted to US President Donald Trump's comments about potential tariffs on Europe and Mexico. "Gold touched a high of $3,375 and came down slightly to $3,345," Agar noted. "There's a chance it might dip before heading upwards again. With tariff discussions re-emerging, gold is expected to remain volatile in the coming days." The international market's focus remains on trade developments and key macroeconomic indicators from the US, which could further shape the trajectory of precious metal prices globally and domestically. Globally, spot gold was little changed at $3,356.95 per ounce, as of 1337 GMT, after reaching its highest point since June 23 earlier, according to Reuters.
