Stocks drop worldwide as investors brace for crucial week
MSCI's global equity index retreated from an all-time high and was 0.2% lower in early European trading while Japan's Topix index ended the day 0.9% lower after rising to a record on Thursday.
Europe's STOXX 600 share index also fell 0.5% in early trade. Ahead of the August 1 deadline for U.S. trade deals with Europe and China, stock markets have been buoyed up by firm U.S. economic data and framed the risk of tariffs hitting growth as a reason to expect Federal Reserve rate cuts.
"Higher (U.S.) inflation will, in time, result in weaker demand and weaker investment," UBS Wealth Management economist Dean Turner said.
Van Luu, head of solutions strategy, fixed income and foreign exchange at Russell Investments, said he was waiting for a buying opportunity in U.S. Treasuries for this reason.
"U.S. data looks astonishingly resilient," he said, but this likely reflected a spending rush before tariffs pushed business input costs and retail sticker prices higher.
RISK EVENTS
The past week saw U.S. trade agreements with Japan, Indonesia and the Philippines, while deal talks continued with South Korea.
Next week brings the next Fed interest rate meeting, the closely watched monthly payrolls report, and earnings from Amazon, Apple, Meta and Microsoft. Trump has kept up pressure on Fed Chair Jerome Powell to cut rates after a rare presidential visit to the central bank on Thursday, although he said he did not intend to fire Powell, as he has frequently suggested he would.
U.S. 10-year Treasury yields were steady at 4.41% while two-year yields, which track monetary policy bets, were also flat at 3.923%.
Robust earnings from Google parent Alphabet took Wall Street's Nasdaq to a record high on Thursday but futures trading signalled the tech-heavy index would flatline at the start of cash trading in New York.
Contracts tracking the blue-chip S&P 500 index were also flat in early European dealings.
The Bank of Japan has its own policy announcement on Thursday, and Prime Minister Ishiba's Liberal Democratic Party holds a meeting on the same day. That's after the European Central Bank held rates steady on Thursday, pausing its easing campaign as it waited to assess the impact from U.S. tariffs.
The euro was steady against the dollar on Friday at $1.1745 , although German government debt sold off, with the yield on benchmark 10-year Bunds up 5 basis points (bps) in early dealings to 2.74%, the highest since March 28 .
Japanese government bond yields were steady on Friday at about 1.6%, a level last seen in October 2008, having ratcheted higher on concerns the political scale is tilting more towards fiscal stimulus. This came after big gains for opposition parties backing consumption tax cuts in Sunday's upper house election. Pressure is building on the more fiscally hawkish Ishiba to quit after his coalition lost its majority in the vote, having done the same in lower house elections last October.
Gold eased 0.3% to around $3,356 an ounce.
Brent crude futures gained 0.7% to $69.65 a barrel.
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Khaleej Times
3 hours ago
- Khaleej Times
Trump, EU chief seek deal in transatlantic tariffs standoff
US President Donald Trump and EU chief Ursula von der Leyen prepared to meet Sunday in Scotland in a push to resolve a months-long transatlantic trade standoff that is going down to the wire. Trump has said he sees a 50-50 chance of reaching a deal with the European Union, having vowed to hit dozens of countries with punitive tariffs unless they hammer out a pact with Washington by August 1. The EU is currently facing the threat of an across-the-board levy of 30 percent from that date. Von der Leyen's European Commission, negotiating on behalf of the EU's member countries, has been pushing hard for a deal to salvage a trading relationship worth an annual $1.9 trillion in goods and services. Any deal with the United States will need approval by all 27 member states. EU ambassadors, on a visit to Greenland, were to meet Sunday morning to discuss the latest negotiations -- and again after any accord. Sunday's sit-down between Trump and the EU chief was to take place at 4:30 pm (1530 GMT) in Turnberry, on Scotland's southwestern coast, where Trump owns a luxury golf resort. The 79-year-old American leader said Friday he hoped to strike "the biggest deal of them all" with the EU. "I think we have a good 50-50 chance" of a deal, the president said, citing sticking points on "maybe 20 different things". He praised von der Leyen as "a highly respected woman" -- a far cry from his erstwhile hostility in accusing the EU of existing to "screw" the United States. But late-night EU talks with US Commerce Secretary Howard Lutnick on Saturday to hammer out the final details were "combative at times," The Financial Times reported. As of Saturday evening, there were "still quite a few open questions" -- notably on pharmaceutical sector tariffs, said one EU diplomat. Tariff levels on the auto sector were also crucial for the Europeans -- notably France and Germany -- and the EU has been pushing for a compromise on steel that could allow a certain quota into the United States before tariffs would apply. Baseline 15% According to European diplomats, the deal on the table involves a baseline levy of around 15 percent on EU exports to the United States -- the level secured by Japan -- with carve-outs for critical sectors including aircraft, lumber and spirits excluding wine. The EU would commit to ramp up purchases of US liquefied natural gas, along with a series of investment pledges. Hit by multiple waves of tariffs since Trump reclaimed the White House, the EU is currently subject to a 25-percent levy on cars, 50 percent on steel and aluminium, and an across-the-board tariff of 10 percent, which Washington threatens to hike to 30 percent in a no-deal scenario. The EU has focused on getting a deal with Washington to avoid sweeping tariffs that would further harm its sluggish economy, with retaliation as a last resort. While 15 percent would be much higher than pre-existing US tariffs on European goods -- at 4.8 percent -- it would mirror the status quo, with companies already facing an additional flat rate of 10 percent. Should talks fail, EU states have greenlit counter tariffs on $109 billion (93 billion euros) of US goods including aircraft and cars to take effect in stages from August 7. Brussels is also drawing up a list of US services to potentially target. Beyond that, countries like France say Brussels should not be afraid to deploy a so-called trade "bazooka" -- EU legislation designed to counter coercion through trade measures which involves restricting access to its market and public contracts. But such a step would mark a major escalation with Washington. Ratings dropping Trump has embarked since returning to power on a campaign to reshape US trade with the world. But polls suggest the American public is unconvinced, with a recent Gallup survey showing his approval rating at 37 percent -- down 10 points from January. Having promised "90 deals in 90 days," Trump's administration has so far unveiled five, including with Britain, Japan and the Philippines. Early Sunday, ahead of his meeting with Von der Leyen, Trump was out again on the golf course, having spent most of Saturday playing at Turnberry amid tight security. The trip to Scotland has put physical distance between Trump and the scandal around Jeffrey Epstein, the wealthy financier accused of sex trafficking who died in prison in 2019 before facing trial. In his heyday, Epstein was friends with Trump and others in the New York jet-set, but the president is facing backlash from his own MAGA supporters demanding access to the Epstein case files. With the uproar refusing to die down, a headline agreement with the EU -- in addition to bolstering Trump's dealmaker credentials -- could bring a welcome distraction.
Gulf Today
7 hours ago
- Gulf Today
US reaches deal with Japan, tariff cut
The United States, riding a tariff wave launched by President Donald Trump, has concluded a trade agreement with Japan, the fourth largest economy in the world, in Washington on Tuesday. According to the agreement, the US will impose 15 per cent tariff on all goods imported from Japan. This is a much lower rate than the 25 per cent that Trump had threatened Japan with from August 1. Even as the deadline hovered over the talks, the two sides managed to arrive at an agreement much before the dreaded date. Trump had declared on his Truth Social, his personal portal, 'This Deal will create Hundreds and Thousands of Jobs – There has never been anything like it. This is a very exciting time for the United States of America, and especially for the fact that we will continue to always have a great relationship with the Country of Japan.' Japanese Prime Minister Shigeru Ishiba said, 'Since February, we have been negotiating with our national interests at stake. Both sides have engaged in all-out, close-to-the-edge negotiations over automobiles and other products. I believe this outcome reflects those efforts.' The trade agreement reflects interesting details. Though it appears that the United States has gained hugely going by the headline figures – Japan will have to invest $550 billion in the United States, open its agricultural sector to American rice – the impact on the Japanese GDP would be a mere 0.55 per cent. Even if the tariff rate had remained at the apparently punitive 25 per cent, the impact on Japanese GDP would have been 0.85 per cent. The US was running a trade deficit of $69.4 billion. And Japan will channel the investments in the US from state-backed institutions like Japan Bank for International Cooperation (JBIC) or through guaranteed loans. The Japanese investments are to be made in semi-conductors, pharmaceuticals, steel, shipbuilding, critical minerals, aviation, energy, automobiles, AI and quantum technology. The sensitive area for Japan is the import of rice. Japan consumes seven million tonnes of rice every year. It maintains a tariff-free quota of 770,000 tonnes. And it will increase the ratio of US rice imports within this range. It is said that there is room for rice imports outside the free tariff quota, with the proviso of 341 yen ($.2.33) per kilogramme of rice. Prime Minister Ishiba referring to the opening of rice imports from the US, said, 'You can think of it as increasing the proportion of rice procured from the United States, under the minimum access arrangement, but this agreement does not include any provisions that would sacrifice agriculture.' Both sides have bargained hard, and each side has claimed victory. The Japanese believe that that they have succeeded in bringing down the reciprocal tariff rate from 25 per cent to 15 per cent, a clear 10 per cent reduction. The US believes that it has managed to force Japan to necessarily invest in the US – according to the deal $550 billion – and that 90 per cent of the profits made from the investments will remain in the United States, and that it has succeeded in prising open the protected agricultural market, especially with regard to rice. It is expected that the US-Japan trade deal will serve as a template for the trade agreements with the European Union (EU) and China. The expectation is that the US will settle for a 15 per cent tariff with these two as well. The US is willing to be reasonably generous with big trade partners like Japan, EU, and China. But with smaller countries and economies like the Philippines and Indonesia it is playing tough. In the deal with the Philippines and Indonesia, the US has brought down the tariff regime from 20 per cent to 19 per cent. The trade balance of the US with these two countries is much lower, $17.9 billion with Indonesia and $4.9 billion with the Philippines.
Al Etihad
7 hours ago
- Al Etihad
UAE surpasses UK to become world's second-largest fintech market in H1 2025
27 July 2025 12:50 REDDY (ABU DHABI)The UAE has emerged as the second largest fintech investment market globally in the first half of 2025, overtaking the United Kingdom and trailing only the United States, according to data compiled by Innovate notable shift was largely driven by a landmark $2 billion capital raised by Binance, which positioned the country ahead of more established fintech hubs such as London and fintech investment stood at $24 billion across 2,597 deals in the first half of 2025, marking a 6% increase from the previous six-month period. Of this, the UAE accounted for $2.2 billion from just 58 deals, highlighting its strategic appeal for high-value compares to the UK's $1.5 billion over 240 deals and India's $1.4 billion from 109 transactions. Singapore, another leading Asian fintech hub, drew $797 million across 100 US, as top country for fintech investment, attracted $11.5 billion in 1,082 and Germany, traditionally strong European players, attracted $693 million and $668 million respectively. Canada followed with $543 million, while Ireland secured $354 million in funding. Brazil rounded out the top 10 with $350 million across 53 $2 billion capital raise in the UAE was the largest fintech transaction globally during the first half of the Abu Dhabi government-backed investor focused on AI and advanced technologies, made the landmark investment in the world's largest cryptocurrency exchange to accelerate digital asset adoption. The deal, which was settled in stablecoins, eclipsed all other major fundraises and underscored the region's growing influence in the digital assets space. Other top global fintech deals included Plaid's $575 million raise in the US (open banking), Rapyd's $300 million in the UK (payments infrastructure), Airwallex's $300 million in Singapore (cross-border payments), and Mercury's $300 million in the US (neobanking).Commenting on the broader trends, Kaan Akin, Chief Investment Officer at Tenity, noted: 'We're not in a hype cycle – we're in a recalibration. Investors are moving away from broad bets and looking for sharper execution, deeper tech, and clear paths to revenue.'While global fintech investments are stabilising, the competition for capital is intensifying. The UK retained its crown as Europe's fintech leader, but the gap with the rest of the continent has narrowed. Europe (excluding the UK) raised $2.9 billion in H1 2025 – a 28% increase from H2 2024. France and Germany were key contributors, underlining strong regional Finance CEO Janine Hirt said the figures demonstrate resilience in the face of global headwinds. 'Despite the broader market adjustment, it is encouraging to see signs of stabilisation and resilience, in the UK and across Europe. The UK FinTech sector has proven its value. It is profitable, job-creating and globally recognised."To retain our global lead however we need to continue working with industry, government and regulators to improve access to growth capital and innovation.'Analysts pointed to a shift in investor behaviour, with capital becoming increasingly concentrated among top-tier Szabo, Head of London at Illuminate Financial, said: 'In H1, we continued to see a bifurcated venture and early growth market... Yet another bifurcation is emerging: capital allocation is increasingly concentrated among top-tier funds and those emerging managers who have delivered meaningful exits.' With the IPO market showing signs of revival and the venture ecosystem recalibrating, secondary market deals are also gaining traction. Kristaps Ronis of Ion Pacific expects global VC secondary transaction volume to reach a record $122 billion in 2025, as funds seek liquidity and exit opportunities. Source: Aletihad - Abu Dhabi
