Asian stocks waver, dollar frail on rates and tariffs
Trump said he was not considering extending the July 9 deadline for countries to negotiate trade deals with the United States, and cast doubts again that an agreement could be reached with Japan, although he expects a deal with India.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.23 per cent in early trading on Wednesday, inching away from the November 2021 top it touched last week. Japan's Nikkei fell 0.78 per cent, dragged by tech stocks.
Tech-heavy Taiwan stocks and South Korea's Kospi Index also fell after US tech firms were hit hard following a strong rally in June.
Data on Tuesday showed the US labour market remained resilient with a rise in job openings for May, sharpening the focus on the payrolls report due on Thursday as investors try to gauge when the Federal Reserve is likely to cut rates next.
Fed Chair Jerome Powell, under fire from Trump to cut rates immediately, reiterated that the US central bank plans to "wait and learn more" about the impact of tariffs on inflation before lowering interest rates.
Traders are pricing in 64 basis points of cuts this year from the Fed with the odds of a move in July at 21 per cent.
That maintained a bearish bias on the dollar. The euro last bought $US1.1793, just below the three-and-half-year high it touched on Tuesday. The yen was steady at 143.52 per dollar.
"Any disappointing economic data can prompt further dovish repricing of FOMC rate cuts and another round of USD selling," said Carol Kong, a currency strategist at Commonwealth Bank of Australia.
"The 'One Big Beautiful Bill' Act (OBBBA) and trade developments also have the potential to further weaken the USD if they undermine investor confidence about the U.S. economy."
Investor focus over the last few days has pivoted to the progress of Trump's massive tax-and-spending bill, which is expected to add $US3.3 trillion to the national debt. The legislation heads to the House of Representatives for possible final approval after US Senate Republicans passed it by the narrowest of margins.
The bill has stoked fiscal worries but the reaction was relatively muted after it passed the Senate. The benchmark US 10-year yields were steady at 4.245 per cent having touched a two-month low in the previous session.
Aninda Mitra, head of Asia macro strategy at BNY Investment Institute, said the legislation "hard wires" a steady deterioration of the fiscal position and the debt trajectory of the US government.
"The near-term impact is mostly in the price, but the uncertainty factor could keep term premia elevated. We don't think long-term yields will fall back materially in the 6-12 month horizon."
The fiscal worries, trade uncertainties and the US rate path trajectory have all led investors to flee US assets and look for alternatives. Investors worry that Trump's chaotic trade policies could hit US economic growth.
That has left the dollar unloved, with the greenback down over 10 per cent for the year in its worst first half performance since the 1970s. The dollar index, which measures the US currency against six rivals, was at 96.649, near its lowest since March 2022.
In commodities, spot gold eased to $US3,332.19 per ounce, after surging one per cent in the previous session. The yellow metal is up 27 per cent this year on safe-haven flows.
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The Advertiser
an hour ago
- The Advertiser
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The bill would raise the nation's debt ceiling by $US5 trillion, a necessary step to avoid a devastating default in coming months. The legislation contains most of Trump's top domestic priorities. It would extend Trump's 2017 tax cuts, cut health and food safety net programs, fund Trump's immigration crackdown, and zero out many green-energy incentives. It also includes a $US5 trillion increase in the nation's debt ceiling, which lawmakers must address in the coming months or risk a devastating default. Republicans in the US House of Representatives have advanced President Donald Trump's massive tax-cut and spending bill toward a final yes-or-no vote, appearing to overcome internal party divisions over its cost. During a marathon overnight session, lawmakers cleared a final procedural hurdle needed to begin debate on the bill in a 219-213 vote about 3.30am. It was not clear when they would hold a final vote. 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The past two weeks have shown deep Republican divides on the bill, which would add $US3.4 trillion ($A5.2 trillion) to the nation's $US36.2 trillion in debt and make major cuts to social programs including Medicaid. Republican lawmakers have long railed against the growth of the debt, which has continued during the past two decades regardless of which party was in control in Washington. A handful of Republican holdouts have objected to the bill. One, senator Thom Tillis, opted not to seek re-election after voting against it. Nonetheless, Trump has succeeded in getting the votes to advance the legislation at each step of the way. Votes in the House were held open for hours on Wednesday during the day and overnight as House Speaker Mike Johnson and the White House talked with reluctant members. Johnson expressed optimism on Wednesday night, saying lawmakers had a "long, productive day" discussing the issues. He praised Trump for making phone calls to the holdouts through the early hours of Thursday morning. "There couldn't be a more engaged and involved president," Johnson told reporters. The Senate passed the legislation by the narrowest possible margin on Tuesday after intense debate on the bill's hefty price tag and $US900 million in cuts to the Medicaid healthcare program for low-income Americans. Any changes made by the House would require another Senate vote, which would make it all but impossible to meet Trump's self-imposed deadline of getting the legislation approved by the July 4 holiday. The bill would raise the nation's debt ceiling by $US5 trillion, a necessary step to avoid a devastating default in coming months. The legislation contains most of Trump's top domestic priorities. It would extend Trump's 2017 tax cuts, cut health and food safety net programs, fund Trump's immigration crackdown, and zero out many green-energy incentives. It also includes a $US5 trillion increase in the nation's debt ceiling, which lawmakers must address in the coming months or risk a devastating default. Republicans in the US House of Representatives have advanced President Donald Trump's massive tax-cut and spending bill toward a final yes-or-no vote, appearing to overcome internal party divisions over its cost. During a marathon overnight session, lawmakers cleared a final procedural hurdle needed to begin debate on the bill in a 219-213 vote about 3.30am. It was not clear when they would hold a final vote. As dawn broke in Washington on Thursday, the top House Democrat, Hakeem Jeffries, was well into what was turning into an hours-long speech, calling out Republican lawmakers by name as he blasted the package as a giveaway to the wealthiest Americans. "This one big, ugly bill - this reckless Republican budget - this disgusting abomination is not about improving the quality of life of the American people," he said, a scathing reference to Trump's name for his signature legislation: One Big Beautiful Bill. "The focus of this bill, the justification for all of the cuts that will hurt everyday Americans is to provide massive tax breaks for billionaires." Democrats are united in opposition to the bill, but on their own lack the votes to stop the bill in the chamber, which is controlled 220-212 by Trump's Republicans. Republicans can afford no more than three defections to get a final bill passed. The past two weeks have shown deep Republican divides on the bill, which would add $US3.4 trillion ($A5.2 trillion) to the nation's $US36.2 trillion in debt and make major cuts to social programs including Medicaid. Republican lawmakers have long railed against the growth of the debt, which has continued during the past two decades regardless of which party was in control in Washington. A handful of Republican holdouts have objected to the bill. One, senator Thom Tillis, opted not to seek re-election after voting against it. Nonetheless, Trump has succeeded in getting the votes to advance the legislation at each step of the way. Votes in the House were held open for hours on Wednesday during the day and overnight as House Speaker Mike Johnson and the White House talked with reluctant members. Johnson expressed optimism on Wednesday night, saying lawmakers had a "long, productive day" discussing the issues. He praised Trump for making phone calls to the holdouts through the early hours of Thursday morning. "There couldn't be a more engaged and involved president," Johnson told reporters. The Senate passed the legislation by the narrowest possible margin on Tuesday after intense debate on the bill's hefty price tag and $US900 million in cuts to the Medicaid healthcare program for low-income Americans. Any changes made by the House would require another Senate vote, which would make it all but impossible to meet Trump's self-imposed deadline of getting the legislation approved by the July 4 holiday. The bill would raise the nation's debt ceiling by $US5 trillion, a necessary step to avoid a devastating default in coming months. The legislation contains most of Trump's top domestic priorities. It would extend Trump's 2017 tax cuts, cut health and food safety net programs, fund Trump's immigration crackdown, and zero out many green-energy incentives. It also includes a $US5 trillion increase in the nation's debt ceiling, which lawmakers must address in the coming months or risk a devastating default. Republicans in the US House of Representatives have advanced President Donald Trump's massive tax-cut and spending bill toward a final yes-or-no vote, appearing to overcome internal party divisions over its cost. During a marathon overnight session, lawmakers cleared a final procedural hurdle needed to begin debate on the bill in a 219-213 vote about 3.30am. It was not clear when they would hold a final vote. As dawn broke in Washington on Thursday, the top House Democrat, Hakeem Jeffries, was well into what was turning into an hours-long speech, calling out Republican lawmakers by name as he blasted the package as a giveaway to the wealthiest Americans. "This one big, ugly bill - this reckless Republican budget - this disgusting abomination is not about improving the quality of life of the American people," he said, a scathing reference to Trump's name for his signature legislation: One Big Beautiful Bill. "The focus of this bill, the justification for all of the cuts that will hurt everyday Americans is to provide massive tax breaks for billionaires." Democrats are united in opposition to the bill, but on their own lack the votes to stop the bill in the chamber, which is controlled 220-212 by Trump's Republicans. Republicans can afford no more than three defections to get a final bill passed. The past two weeks have shown deep Republican divides on the bill, which would add $US3.4 trillion ($A5.2 trillion) to the nation's $US36.2 trillion in debt and make major cuts to social programs including Medicaid. Republican lawmakers have long railed against the growth of the debt, which has continued during the past two decades regardless of which party was in control in Washington. A handful of Republican holdouts have objected to the bill. One, senator Thom Tillis, opted not to seek re-election after voting against it. 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The bill would raise the nation's debt ceiling by $US5 trillion, a necessary step to avoid a devastating default in coming months. The legislation contains most of Trump's top domestic priorities. It would extend Trump's 2017 tax cuts, cut health and food safety net programs, fund Trump's immigration crackdown, and zero out many green-energy incentives. It also includes a $US5 trillion increase in the nation's debt ceiling, which lawmakers must address in the coming months or risk a devastating default.
News.com.au
6 hours ago
- News.com.au
US House sets make-or-break final vote on Trump tax bill
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