SYDNEY (July 11): US and European stock futures slid in Asia on Friday after US President Donald Trump stepped up tariff threats against Europe and Canada, snuffing out an early rally in regional share markets.
The dollar gained on the euro and the Canadian currency, as Trump announced late on Thursday a 35% tariff rate on all imports from Canada from Aug 1, adding that he planned to impose blanket tariffs of 15% or 20% on other nations.
The US president, whose global wave of tariffs has upended businesses and policymaking, said the European Union will receive a letter “today or tomorrow”.
Both Nasdaq futures and S&P 500 futures fell about 0.4%. EUROSTOXX 50 futures dropped 0.6%.
The euro slipped 0.3% to US$1.1668 (RM4.97), while the dollar gained 0.4% to C$1.3704.
Earlier in the week, Trump pushed back his tariff deadline of July 9 to Aug 1 for many trading partners to allow more time for negotiations, but broadened his trade war, setting new tariffs on a number of countries, including allies Japan and South Korea, along with a 50% tariff on copper.
“We consider it very unlikely that the US government can agree on even ten more trade frameworks by Aug 1,” said Joseph Capurso, head of international economics at the Commonwealth Bank of Australia.
“The upshot is tariff rates will soon be increased sharply again for many economies, or another extension for negotiations will be granted.”
Overnight, Wall Street rose modestly but posted record closing highs, as chip giant Nvidia made history with a closing market valuation above US$4 trillion.
The MSCI’s broadest index of Asia-Pacific shares outside Japan was flat on Friday, but is set for a small gain of 0.2% this week.
Tokyo’s Nikkei reversed earlier gains to be flat, which brought the weekly losses to 0.5%.
Investors are gearing up for second-quarter earnings to gauge the impact of Trump’s trade war launched on April 2. JPMorgan Chase is due to release results (next) Tuesday, essentially kicking off the reporting period.
In the Treasury markets, moves were muted in Asia. The benchmark 10-year US Treasury yields held at 4.3458%, having edged up a tiny bit overnight after data showed jobless claims unexpectedly fell last week.
Oil prices rose slightly after losing 2% overnight. Brent crude futures inched up 0.2% to US$68.77 a barrel, having lost 2.2% a day earlier.
US West Texas Intermediate crude was at US$66.76 a barrel, up 0.3%.
Spot gold rose 0.3% to US$3,333 an ounce.
– The Edge
