Stocks surge, euro steady after US-EU trade agreement
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 Japan.The 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 Japan.Countries 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 economies.European 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 yen.MSCI's 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 week.While 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% rate.The 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 added.Gains for China's blue-chip stocks petered out towards the midday break.The Australian dollar, often seen as a proxy for risk appetite, was at $0.657, hovering around the near eight-month peak scaled last week.In 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.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Khaleej Times
42 minutes ago
- Khaleej Times
India to maintain Russian oil imports despite Trump threats, government sources say
India will keep purchasing oil from Russia despite U.S. President Donald Trump's threats of penalties, two Indian government sources told Reuters on Saturday, not wishing to be identified due to the sensitivity of the matter. On top of a new 25% tariff on India's exports to the U.S., Trump indicated in a Truth Social post last month that India would face additional penalties for purchases of Russian arms and oil. On Friday, Trump told reporters he had heard that India would no longer be buying oil from Russia. But the sources said there would be no immediate changes. "These are long-term oil contracts," one of the sources said. "It is not so simple to just stop buying overnight." Justifying India's oil purchases from Russia, a second source said India's imports of Russian grades had helped avoid a global surge in oil prices, which have remained subdued despite Western curbs on the Russian oil sector. Unlike Iranian and Venezuelan oil, Russian crude is not subject to direct sanctions, and India is buying it below the current price cap fixed by the European Union, the source said. The New York Times also quoted two unnamed senior Indian officials on Saturday as saying there had been no change in Indian government policy. Indian government authorities did not respond to Reuters' request for official comment on its oil purchasing intentions. However, during a regular press briefing on Friday, foreign ministry spokesperson Randhir Jaiswal said India has a "steady and time-tested partnership" with Russia. "On our energy sourcing requirements ... we look at what is there available in the markets, what is there on offer, and also what is the prevailing global situation or circumstances," he said. The White House did not immediately respond to requests for comment. India's top supplier Trump, who has made ending Russia's war in Ukraine a priority of his administration since returning to office this year, has expressed growing impatience with Russian President Vladimir Putin in recent weeks. He has threatened 100% tariffs on U.S. imports from countries that buy Russian oil unless Moscow reaches a major peace deal with Ukraine. Russia is the leading supplier to India, the world's third-largest oil importer and consumer, accounting for about 35% of its overall supplies. India imported about 1.75 million barrels per day of Russian oil from January to June this year, up 1% from a year ago, according to data provided to Reuters by sources. But while the Indian government may not be deterred by Trump's threats, sources told Reuters this week that Indian state refiners stopped buying Russian oil after July discounts narrowed to their lowest since 2022 - when sanctions were first imposed on Moscow - due to lower Russian exports and steady demand. Indian Oil Corp, Hindustan Petroleum Corp , Bharat Petroleum Corp and Mangalore Refinery Petrochemical Ltd have not sought Russian crude in the past week or so, four sources told Reuters. Nayara Energy - a refinery majority-owned by Russian entities, including oil major Rosneft, and major buyer of Russian oil - was recently sanctioned by the EU. Nayara's chief executive resigned following the sanctions, and three vessels laden with oil products from Nayara Energy have yet to discharge their cargoes, hindered by the new EU sanctions, Reuters reported last week.
Khaleej Times
an hour ago
- Khaleej Times
BOJ gears up to hike rates again but leaves free hand on timing
The Bank of Japan laid the groundwork last week for resuming interest rate hikes by spelling out explicitly for the first time the risks that persistent food price rises fan broad-based inflation. While markets took a dovish reading of BOJ Governor Kazuo Ueda's commentary after Thursday's policy meeting, much of his guidance suggests the bank is inching back towards action after a period of waiting and watching, analysts say. A shift in the board's inflation bias and its less gloomy view on the impact of U.S. tariffs also underscore the BOJ's resolve to pull the trigger once it is convinced the damage from higher levies will be within its expectations. Such hawkish signals in the BOJ's quarterly report, which represents the board's consensus view on the policy outlook, were qualified by Ueda's comments suggesting he was in no rush to raise interest rates. Still, Ueda said Japan was making some progress towards durably hitting the BOJ's 2% inflation target and stressed that its policy rate - at 0.5% - remains very low. "It's not as if we will wait until underlying inflation is firmly at 2%. Our decision is dependent on how likely underlying inflation will reach that level," Ueda told a news conference on Thursday when asked about the next rate-hike timing. All in all, the signals show the BOJ is preparing for another rate hike, while leaving all options open on the exact timing, analysts say. "The outlook report clearly shows the BOJ is starting to lay the groundwork for a rate hike," said Naomi Muguruma, chief bond strategist at Mitsubishi UFJ Morgan Stanley Securities. "The BOJ seems confident about prospects for durably hitting its inflation target," she said. "It may not be in a rush, but signaling that every policy meeting from now will be live." The BOJ holds its next policy meeting in September and another in October, when the board conducts a quarterly review of growth and price forecasts. It holds its final meeting for this year in December. A Reuters poll last month showed a majority of economists expect another rate hike by year-end. Swap rates indicate a 54% chance the BOJ will raise rates to 0.75% in October and a 71% chance in December. Second round effects When the BOJ compiled its previous outlook report on May 1, Ueda signalled a pause in its rate-hike cycle as President Donald Trump's April announcement of sweeping "reciprocal" tariffs jolted markets and stoked fears of global recession. Thursday's report showed signs the BOJ has ended that pause, as markets restored some calm and Japan's trade agreement with the U.S. in July reduced some uncertainty. For one, the BOJ removed the word "extremely" in describing uncertainty over U.S. trade policy. While Ueda stressed the need to await more data on the impact from U.S. tariffs, he said the risk of the economy "falling off the cliff" has diminished. The board also revised up its inflation forecast and said risks to the price outlook were balanced - a more neutral stance from that of May 1 describing risks as skewed to the downside. Furthermore, the BOJ report for the first time included a detailed assessment of how rising food costs - once seen as transitory - may lead to broad-based price rises. "It is possible that price rises will persist for longer than expected" as companies are passing on not just raw material but labour and distribution costs, the report said. A steady rise in the price of items like food, which consumers buy frequently, may induce "second-round effects" on underlying inflation, the BOJ said in the strongest warning to date on mounting price pressure. To be sure, food prices are among several factors the BOJ looks at in judging whether underlying inflation - or price rises driven by domestic demand - will durably hit its 2% target and justify raising rates. Other measures show underlying inflation remains short of 2%, Ueda said, brushing aside the view the BOJ may be behind the curve in addressing the risk of too-high inflation. But he said the BOJ must keep an eye out on how food prices and headline consumer inflation, which has remained above its target for well over three years, could affect inflation expectations. In exiting a decade-long stimulus last year and raising rates to 0.5% in January, the BOJ pointed to growing signs companies were shedding their long-held aversion to price hikes. Such change in corporate behaviour may be accelerating. A total of 1,010 food and beverage items saw prices rise in August with more than 3,000 items likely to see higher prices in October, think tank Teikoku Databank said on Thursday. "Food inflation will undoubtedly persist, which is probably why the BOJ highlighted the risk so clearly in the report," said veteran BOJ watcher Mari Iwashita. "Once there's more clarity that wage hikes will continue, the BOJ might go ahead and raise rates."
Khaleej Times
3 hours ago
- Khaleej Times
Miffed with WCL after India's withdrawal, Pakistan pull out of future editions of tournament
The Pakistan Cricket Board (PCB) has officially announced that it will no longer participate in any future editions of the World Championship of Legends (WCL), raising concerns about the tournament's fairness, integrity, and political neutrality, The Nation reported, citing the PCB. "The championship's handling of events appeared to be under invisible pressures," the PCB noted. "The apology issued later seemed motivated by a specific form of nationalism, making it difficult for us to continue our participation," it added. The decision was taken during a Board of Governors meeting, chaired by PCB Chairman Mohsin Naqvi. According to The Nation, the board pointed to "double standards and politically motivated actions." One of the most contentious issues raised by the board was the decision to award points to a team that had voluntarily forfeited a match, a move the PCB claimed as "highly questionable" and against the spirit of fair competition. The board further criticised the press release put out by WCL organisers after the India-Pakistan match was called off. It termed the communication "politically charged and prejudiced." The PCB said it would not take part in any event where the values of neutrality and fair play are undermined. The board made it clear that it will not be associated with tournaments that allow external agendas to dictate the course of the game. Earlier, the EaseMyTrip Co-founder Nishant Pitti has clarified that it will not be associated with any India-Pakistan match in the World Championship of Legends (WCL). The company clarified its stance, stating that despite entering into a 5-year sponsorship agreement with WCL two years ago, it will not associate with or participate in any match involving Pakistan. Pitti took to his X account to express support for the Indian team, while explaining the company's position. "India vs Pakistan - WCL Semi-Final. We applaud Team India @India_Champions for their outstanding performance in the World Championship of Legends. You've made the nation proud. However, the upcoming semi-final against Pakistan is not just another game. Terror and cricket cannot go hand in hand," Pitti said in his post. He further added, "@EaseMyTrip, we stand with India. We cannot support any event that attempts to normalise relations with a country that promotes terrorism. The people of India have spoken and we hear them. EaseMyTrip will not be associated with the India vs Pakistan match in WCL. Some things are bigger than sport. Nation first, business later. Always. Jai Hind." Relations between India and Pakistan have deteriorated sharply following the deadly April 22 terror attack at Pahalgam in the Indian-administered Kashmir. India blamed Pakistan for the attack — an allegation strongly rejected by the Pakistan government — which killed 26 civilians. What followed was a four-day military conflict between the two nuclear-armed South Asian neighbours in May before a ceasefire was announced. Meanwhile, South Africa Champions (197/1 in 16.5 overs) won the final on Saturday with a comprehensive nine-wicket victory over Pakistan Champions (195/5 in 20 overs). Ab de Villiers (120 not out off 60 balls, 12 fours and 6 sixes) was the hero for South Africa Champions who chased down the target of 195 with 19 balls and eight wickets in hand. For Pakistan, Sharjeel Khan had top-scored with 76 off 44 balls. Earlier, the South Africans beat Australia Champions in the semifinal, while Pakistan advanced to the final after India forfeited their semifinal. This was the second edition of the tournament, with India Champions winning the inaugural event last year.
