2025-07-29 05:34
Asian stock markets : EU stock futures, euro steady for now after retreat Wall St futures edge up before Fed, mega cap earnings Analysts warn tariffs a drag for EU and US economies Oil holds gains after Trump shortens Russia deadline SYDNEY, July 29 (Reuters) - Asia shares slipped on Tuesday while the euro nursed its losses as investors pondered the downside of the U.S.-EU trade deal and the reality that punishing tariffs were here to stay, with unwelcome implications for growth and inflation. The initial relief over Europe's 15% levy quickly soured when set against the 1% to 2% that stood before President Donald Trump took office. Leaders in France and Germany lamented the outcome as a drag on growth, pulling down stocks and bond yields across the continent while slugging the single currency. Sign up here. Trump also flagged a "world tariff" rate of 15% to 20% on all trading partners that were not negotiating a deal, among the highest rates since the Great Depression of the 1930s. "While the worst case scenario was averted, the implied EU tariff increase from 1% in January is a significant tax increase on EU exports," wrote economists from JPMorgan in a note. "This is a very big shock that unwinds a century of U.S. leadership in global free trade," they warned. "While we no longer see a U.S. recession as our baseline from this shock, the risk is still elevated at 40%." A further risk to world growth came from a sudden spike in oil prices after Trump threatened a new deadline of 10 or 12 days for Russia to make progress toward ending the war in Ukraine or face tougher sanctions on oil exports. The air of caution saw MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) , opens new tab slip 0.8%. Japan's Nikkei lost 0.9% (.N225) , opens new tab, while Chinese blue chips (.CSI300) , opens new tab were flat. European shares steadied after Monday's sell-off. EUROSTOXX 50 futures , FTSE futures and DAX futures all edged up around 0.2%. The euro was flat at $1.1587 , after falling 1.3% overnight in the largest drop since mid-May. It now has chart support at $1.1556. The dollar index was up at 98.675 , after the rush out of short dollar positions lifted it 1% overnight, while it eased a one-week high on the yen to stand at 148.27 . Wall Street held firm on hopes for upbeat results from mega caps this week that include Apple (AAPL.O) , opens new tab, Meta Platforms (META.O) , opens new tab, Microsoft (MSFT.O) , opens new tab and Amazon (AMZN.O) , opens new tab. S&P 500 futures nudged up 0.1%, while Nasdaq futures added 0.2%. Yields on 10-year Treasuries held at 4.408% having crept higher on Monday as markets braced for another steady decision on interest rates from the Federal Reserve. Futures imply a 97% chance the Fed will keep rates at 4.25%-4.5% at its meeting on Wednesday and reiterate concerns that tariffs will push inflation higher in the short term. Analysts also assume one, or maybe two, Fed officials will dissent in favour of a cut and supporting wagers for a move in September. The odds could change depending on a slew of U.S. data this week including gross domestic product for the second quarter where growth is seen rebounding to an annualised 2.4%, after a 0.5% contraction in the first quarter. Figures on job openings are due later on Tuesday that will help refine forecasts for the crucial payrolls report on Friday. Canada's central bank also meets on Wednesday and again is widely expected to hold rates at 2.75% as it waits to see how trade talks with the U.S. wash out. In commodity markets, prices for copper and iron ore were under pressure while gold idled at $3,315 an ounce . Brent was off a fraction at $69.90 a barrel, having climbed 2.3% on Monday, while U.S. crude held at $66.60. https://www.reuters.com/world/china/global-markets-wrapup-2-2025-07-29/
2025-07-29 04:37
July 29 (Reuters) - A look at the day ahead in European and global markets from Wayne Cole. Asian markets have been quietly picking up the pieces after the U.S./EU tariff party turned into a bust. It was like being relieved because somebody only burned half your house down. Hey, at least they left the kitchen and the bathroom. Sign up here. European stock futures are fractionally firmer and the single currency has steadied just under $1.1600. The euro's rapid retreat was not entirely a surprise given how crowded the long euro/short dollar trade had got, and the suspicion is speculators will soon be selling the dollar again. After all, come Friday U.S. consumers will be paying a minimum of 15% on all imports into the country, and for the foreseeable future. This tax will squeeze demand and profit margins at home, while eating into export earnings across the globe. These are called beggar thy neighbour policies for a reason. There's also the rather naive notion that such "deals" guarantee a period of certainty ahead. Just look how Trump suddenly gave Russia 10 to 12 days to move on a ceasefire with Ukraine, having set a deadline of 50 days earlier this month. This did not seem in any way planned. Trump just said it off the cuff at a media conference at his golf club in Scotland. If such a deadline can be changed on a whim, who's to say anything agreed in these trade deals cannot be altered at his pleasure. Trump has seen how trade and tariffs can dominate the global news cycle; there's no way he's giving that up anytime soon. Talks with China, for instance, are set to continue in Stockholm today and everybody assumes the deadline for an agreement will be extended by another 90 days. This, entirely incidentally, will allow time for Trump to meet Chinese President Xi Jinping and personally claim yet another biggest deal of all time. For its part, Wall St remains in a world of its own, counting on upbeat results from megacaps this week to justify valuation measures that are the highest since the late 1990s. Meta (META.O) , opens new tab and Microsoft (MSFT.O) , opens new tab are due on Wednesday, Apple (AAPL.O) , opens new tab and Amazon (AMZN.O) , opens new tab the day after. A slew of European companies also report earnings today. Key developments that could influence markets on Tuesday: - U.S. data on job openings, June trade balance and Conference Board consumer confidence - Fed's two-day meeting starts https://www.reuters.com/world/china/global-markets-view-europe-2025-07-29/
2025-07-29 04:19
Seoul, July 29 (Reuters) - Shares in Samsung Electronics (005930.KS) , opens new tab came under pressure on Tuesday, following a powerful rally the previous day after the South Korean technology company clinched a $16.5 billion deal to supply artificial intelligence chips to Tesla (TSLA.O) , opens new tab. Analysts said the deal could bolster the technology company's unprofitable contract manufacturing business, but Samsung faces challenges in securing additional large customers both for logic chips and memory chips where it struggles against TSMC (2330.TW) , opens new tab and SK Hynix (000660.KS) , opens new tab. Sign up here. "This new deal breathes some much-needed life into the business and may signal the start of a turning point for Samsung, but its memory business will need to make considerable progress too," Ben Barringer, global technology analyst at Quilter Cheviot, said. Samsung Electronics, the world's top memory chip maker, has suffered delays in supplying the latest high-bandwidth memory (HBM) chips to key U.S. customer Nvidia (NVDA.O) , opens new tab, a setback that has dented its profits and weighed on its stock. In its "foundry" or contract manufacturing business, where it manufactures logic chips designed by customers, Samsung remains a distant second to market leader TSMC. "Whether this will open the door for additional large customers will depend heavily on its execution," Barringer said. Shares of Samsung recovered to around flat by midday on Tuesday, versus the broader market's (.KS11) , opens new tab 0.6% gain. The shares were down more than 2 percent earlier in the session. FAVORABLE TERMS Tesla CEO Elon Musk said late on Sunday that Samsung's new chip factory in Taylor, Texas, would make the auto company's next-generation AI6 chips, likely to be used in self-driving cars, humanoid robots and data centers, without elaborating on the timing of the production. The deal comes as Samsung has struggled to win major customers for its new Texas factory, partly due to low production yields of its cutting-edge chips. "There also has to be a chance that the company was able to strike the long-term deal on favourable terms, given that Samsung needed to prove its contract manufacturing capabilities," said Russ Mould, investment director at AJ Bell. The long-term supply deal for a key technology from a U.S. factory would "lessen the risk of supply-chain dislocations or tariff friction," he said. "Samsung now needs to prove it can deliver in the right volume to the right quality for what is likely to be a demanding customer." While the deal is "more about securing the longer-term future, we won't see these in cars for at least a year or two," said Matt Britzman, senior equity analyst at Hargreaves Lansdown. https://www.reuters.com/business/autos-transportation/samsung-electronics-shares-retreat-after-tesla-deal-challenges-remain-2025-07-29/
2025-07-29 04:15
July 29 (Reuters) - UBS (UBSG.S) , opens new tab has ordered bankers to scale back sales of complex currency derivatives after its clients suffered heavy losses due to U.S. President Donald Trump's "Liberation day" tariff announcements, the Financial Times reported on Tuesday. Reuters could not immediately verify the report. Sign up here. UBS did not immediately respond to a request for comment. https://www.reuters.com/business/ubs-orders-bankers-scale-back-sale-complex-currency-products-ft-reports-2025-07-29/
2025-07-29 03:08
MUMBAI, July 29 (Reuters) - The Indian rupee is likely to open weaker on Tuesday, weighed down by a jump in the dollar index following a steep decline in the euro, as investors digested the implications of the recent US-EU trade deal. An uptick in oil prices, coupled with persistent foreign portfolio outflows, also poses challenges for the rupee, which has already declined about 1% so far this month. Sign up here. The 1-month non-deliverable forward indicated the rupee will open in the 86.75-86.77 range versus the U.S. dollar, compared with 86.6650 in the previous session. The dollar index rose 1% on Monday, while the euro slumped, as investors sobered up to the terms of the trade deal between the European Union and the United States. "Once markets absorbed the details, sentiment flipped from the reality that tariffs would still increase to 15% with the Trump administration still maintaining tariffs as a leverage tool," analysts at DBS said in a note. Asian currencies were mostly nursing modest declines on the day and regional equities were largely weaker. India's benchmark equity index, the Nifty 50 (.NSEI) , opens new tab, was poised to open little changed but expected to face pressure on diminished hopes of an interim trade deal with the United States, sustained foreign outflows and tepid quarterly earnings. Foreign investors net sold nearly $700 million worth of Indian stocks on Monday, according to provisional exchange data. Traders reckon that the rupee is biased to trend lower in the near term, with support expected around the 86.80 and 87 levels. Whether the Reserve Bank of India steps in firmly to cap rupee deprecation around the 87 mark would also be key to watch, a trader at a foreign bank said. Meanwhile, crude oil prices rose to touch a 10-day high and were last hovering around $70 per barrel after U.S. President Donald Trump said he was reducing the 50-day deadline he gave Russia over its war in Ukraine to 10-12 days. KEY INDICATORS: ** One-month non-deliverable rupee forward at 86.90; onshore one-month forward premium at 13.75 paise ** Dollar index at 98.6 ** Brent crude futures at $70.1 per barrel ** Ten-year U.S. note yield at 4.4% ** As per NSDL data, foreign investors sold a net $164mln worth of Indian shares on Jul. 25 ** NSDL data shows foreign investors sold a net $19.2mln worth of Indian bonds on Jul. 25 https://www.reuters.com/world/india/euro-fuelled-dollar-surge-adds-headwinds-facing-rupee-2025-07-29/
2025-07-29 03:04
Global economy at 'inflection point' as fragmentation risk rises No change to dollar's supremacy but diversification to continue BOJ likely to resume interest rate hike once uncertainty clears BOJ must be vigilant to upside inflation risks, Nakaso says TOKYO, July 29 (Reuters) - The dollar will retain its supremacy as a key global currency but "cracks" appearing in its status will prod investors to continue diversifying into other currencies, said former Bank of Japan Deputy Governor Hiroshi Nakaso. On Japan's monetary policy, Nakaso said the BOJ is likely to resume interest rate hikes once uncertainty over the impact of U.S. tariffs on the economy diminishes. Sign up here. The global economy faces an increased risk of fragmentation due to President Donald Trump's policies, which seem driven by the recognition that globalisation did more harm than good to the U.S., said Nakaso, who retains close contact with domestic and overseas policymakers. "We are, in this regard, at an inflection point where the U.S. is trying to replace the global economic order" based on free trade and multilateralism, with a new one "that better serves its national interest," Nakaso told Reuters in an interview on Monday. Nakaso said the greenback's supremacy will not be overtaken anytime soon as "no other currency at this point can substitute the U.S. dollar," adding that the Federal Reserve will stand ready to provide dollar funding in times of market stress. "However, what we witnessed in April shortly after the 'Liberation Day' was that cracks have appeared in the almighty dollar," and a sign some investors have shifted part of their portfolios away into other currencies, he said. "This diversification trend may continue over the longer run." As chairman of a BIS committee on market operations, Nakaso took part in the creation of a dollar swap line to address a liquidity crunch after the 2008 collapse of Lehman Brothers. Global forums like the Bank for International Settlements (BIS) and the G7 group of advanced economies will continue to play a key role in times of financial crises, he said. Trump's announcement of sweeping tariffs on April 2, which he described as "Liberation Day", triggered a huge outflow of funds from U.S. assets in a move some analysts saw as eroding market trust over the dollar. Markets have restored some calm as Trump de-escalated his trade war including by signing a trade deal with Japan this month, which led to lower tariffs for its mainstay automobiles. With uncertainty still high, the BOJ will likely hold off raising rates for now to scrutinise the hit to Japan's economy from U.S. tariffs and slowing global growth, Nakaso said. "But once the uncertainties clear enough for the BOJ to restore confidence that the economic and inflation trajectory will move in line with their projections, I think they will be back on their way to the next rate hike," he said. Nakaso also said there were upside risks to inflation, as firms have become more keen to raise wages and pass on rising costs through price increases. "Food products that people buy more frequently are rising much quicker than the headline inflation rates. This runs the risk of inflation expectation overshoot," he said. Even with another rate hike, Japan's monetary conditions will remain loose as inflation-adjusted borrowing costs are still negative, Nakaso said. "Monetary policy in Japan needs to be vigilant to upside risks to prices too, so as not to be left behind the curve." A career central banker with expertise on financial markets, Nakaso served as deputy BOJ governor from 2013 to 2018. He is currently chairman of Japan's Daiwa Institute of Research. https://www.reuters.com/business/ex-boj-deputy-chief-nakaso-sees-cracks-dollars-supremacy-2025-07-29/
