European, Japan stocks surge after US-Japan trade deal
ADVERTISEMENT President Donald Trump on Tuesday said a trade deal with Tokyo will include Japan paying a lower-than-threatened 15% tariff on shipments to the U.S. It followed an agreement with the Philippines that will see the U.S. collect a 19% tariff rate on imports from there.
Trump also said EU representatives were coming for trade negotiations on Wednesday. That stirred hopes for a deal with Europe, even as the EU was reportedly refining countermeasures in case of a deadlock before the August 1 deadline.
Euro STOXX 600 jumped 1%, with auto shares surging 3.6%. UK shares hit a record high, climbing 0.5%. The trade deal news has "raised hopes that the U.S. might be about to reach deals with other countries that avoid the higher tariffs on August 1," Deutsche Bank analysts wrote in a note. On Wall Street, S&P 500 futures were up 0.2%, while Nasdaq futures added 0.1%.
ADVERTISEMENT Japan's Nikkei climbed 3.7% as automaker shares surged on news the deal would cut the U.S. auto tariff to 15%, from a proposed 25%. Mazda Motor rose 18%, while Toyota Motor jumped 14%. South Korean automakers also rose as the Japan deal fuelled optimism over potential progress in tariff negotiations between South Korea and the United States.
ADVERTISEMENT The dollar remained weak, having lost ground overnight. It traded flat at 146.71 yen after sliding 0.5% on Tuesday. The dollar index, which tracks the currency against major peers, was little changed at 97.48.
ADVERTISEMENT Analysts noted the trade deal reduced a major risk to the fragile Japanese economy, providing more scope for the Bank of Japan to raise interest rates to fight inflation. That hit the bond market, with yields for 10-year JGBs rising 8.5 basis points to 1.585%.
ADVERTISEMENT Japan's Prime Minister Shigeru Ishiba denied reports he planned to step down following a bruising upper house election defeat. Ishiba said media reports that he had already decided to resign were "completely unfounded." In another positive development, U.S. and Chinese officials will meet in Stockholm next week to discuss an extension to the August 12 deadline for negotiating a trade deal, Treasury Secretary Scott Bessent said. Chinese blue-chips rose 0.7% before losing steam, and MSCI's broadest index of Asia-Pacific shares outside Japan added 1.2%. U.S. corporate earnings reports were showing signs that Trump's trade war was hitting profit margins. General Motors tumbled 8.1% after the automaker reported a $1 billion hit from tariffs to its quarterly results. Investors are awaiting results from Tesla and Google's parent Alphabet - two of the Magnificent 7 stocks that have driven much of the market rally fuelled by AI optimism. Elsewhere, the euro dipped 0.1% to $1.1737, after rising 0.5% the previous day. The European Central Bank is expected to hold rates steady on Thursday after eight consecutive rate cuts. Oil prices nudged higher, helped by rising prices for diesel in the U.S., where stockpiles are at their lowest levels for this time of the year since 1996.
U.S. crude rose 0.3% to $65.48 per barrel, while Brent was at $68.77 per barrel, up 0.2%.
(You can now subscribe to our ETMarkets WhatsApp channel)
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


India Today
an hour ago
- India Today
Trump arrives in Scotland for golf and bilateral talks ahead of EU trade deal
US President Donald Trump, dogged by questions about his ties to disgraced financier and sex offender Jeffrey Epstein, arrived in Scotland on Friday for some golf and bilateral talks that could yield a trade deal with the European told reporters upon his arrival that he will visit his two golf properties in Scotland and meet with British Prime Minister Keir Starmer and European Commission President Ursula von der Leyen, whom he called a "highly respected woman."advertisementAs hundreds of onlookers cheered his arrival, Trump repeated his earlier comment about a 50-50 chance of securing a deal with the EU, adding it would be his administration's biggest trade agreement thus far, if it came together. However, he said there were still "sticking points" with Brussels on "maybe 20 different things."Trump said his meeting with Starmer would be more of a celebration of the trade deal already reached than continued work on it, adding, "It's a great deal for both."Before he left Washington, Trump said his administration was working hard on a possible trade deal with the EU, and Brussels was keen to make a deal. Von der Leyen said later she would meet Trump in Scotland on diplomats say a deal could result in a 15% tariff on EU goods, mirroring a framework accord with Japan reached this week and half of the 30% Trump is threatening to impose by August has sought to reorder the global economy after imposing a 10% tariff on nearly all trading partners in April and threatening sharply higher rates for many countries to kick in a week from now. Trump says the moves will reduce the US trade deficit and bring in extra revenue, but economists warn the new trade policies could drive up inflation.'DON'T TALK ABOUT TRUMP'Trump, facing the biggest domestic political crisis of his second term, expressed frustration about ongoing questions about his administration's handling of investigative files related to Epstein's criminal charges and his 2019 death in prison."You make it a very big thing over something that's not a big thing," Trump told reporters in Scotland, urging them to focus on other prominent Americans with ties to Epstein, including former President Bill Clinton."Talk about Clinton. Talk about the former president of Harvard. Talk about all of his friends. Talk about the hedge fund guys that were with him all the time. Don't talk about Trump," he said. "What you should be talking about is the fact that we have the greatest six months in the history of a presidency."The Epstein issue has caused a rare breach with some of Trump's most loyal Make America Great Again supporters, and majorities of Americans and Trump's Republicans say they believe the government is hiding details on the case, according to Reuters/Ipsos House officials are hoping the controversy dies down while Trump is abroad, two people familiar with the matter TIESTrump will stay at his Turnberry property on Scotland's west coast this weekend, before traveling on Monday to a golf property in Aberdeen, where he will open a second 18-hole course named in honor of his mother, Mary Anne MacLeod. MacLeod was born and raised on a Scottish island before emigrating to the USAs he left the White House, Trump said he looked forward to meeting both Starmer and Scottish leader John Swinney, who had publicly backed Democratic candidate Kamala Harris in the 2024 US presidential trip gives Trump and Starmer a chance to deepen their already warm ties, with key issues on the agenda to include ending Russia's war in Ukraine, British and U.S. sources deteriorating situation in Gaza is also likely to arise. Starmer on Thursday said he would hold an emergency call with France and Germany over what he called the "unspeakable and indefensible" suffering and starvation being reported there, and called on Israel to allow aid to enter the Palestinian health authorities say more than 100 people have died from starvation, most in recent weeks. Human rights groups have said mass starvation is spreading even as tons of food and other supplies sit untouched just outside the being elected last year, Starmer has prioritized good relations with Trump, stressing the importance of Britain's defense and security alliance with the US, while working to clinch the first tariff-reduction deal with the US in framework agreement reaffirmed quotas and tariff rates on British automobiles and eliminated tariffs on the UK's aerospace sector, but left steel tariffs in is expected to press for lower steel tariffs, but sources close to the matter said it was unclear if any breakthrough was possible during Trump's has described Scotland as a "very special place" and made a similar trip there in 2016 during his earlier run for the presidency, but he will not necessarily get a warm 70% of Scots have an unfavorable opinion of Trump, while 18% have a favorable opinion, an Ipsos poll in March police are girding for protests on Saturday in both Aberdeen and in Edinburgh, the country's will return to Britain from September 17-19 for a state visit hosted by King Charles. It will make Trump the first world leader in modern times to undertake two state visits to Britain. The late Queen Elizabeth hosted him at Buckingham Palace for a three-day state visit in June 2019.- EndsTune InMust Watch


Mint
an hour ago
- Mint
Zelenskiy Plans to Ask Europe to Help Pay Ukraine's Soldiers
Ukrainian President Volodymyr Zelenskiy plans to ask European allies to help finance improved salaries for troops resisting Russia's invasion, in a bid to ease growing shortages of recruits. 'Previously, Europeans refused to provide funding for the salaries of our military personnel, only for weapons,' Zelenskiy told reporters in Kyiv on Thursday. 'Our service members themselves can be the weapon that protects everyone.' With a mobilization campaign in Ukraine increasingly unpopular among a population fatigued by the war that's in its fourth year, Zelenskiy's government wants to motivate more volunteers by offering substantial payments for those who sign military contracts. Russia has long offered large signing bonuses and high salaries to lure tens of thousands to its army each month, seeking to avoid any repeat of a spike in public anxiety when President Vladimir Putin ordered a partial draft a few months into the 2022 invasion. Increasing payments to soldiers would add to strains on Ukraine's state budget, which had a deficit exceeding 20% of gross domestic product last year amid massive military spending. The war-torn nation relies on tens of billions of dollars in aid from its foreign allies, who have so far rejected the idea of directly covering military expenses. While the International Monetary Fund, which is providing a loan program worth about $16 billion, is urging Kyiv to shrink the budget gap, the government has no plans to raise taxes, Ukrainian Prime Minister Yuliia Svyrydenko told Bloomberg News in an interview. Global donors have earmarked only half of the estimated $75 billion needed for the budget over the next two years, she said. Ukraine needs $25 billion annually to produce drones, jamming equipment and missiles to defend against Russia, which will bring the budget deficit to $65 billion next year, according to Zelenskiy. It has begun discussions on the issue with European Commission President Ursula von der Leyen, NATO Secretary-General Mark Rutte, French President Emmanuel Macron and UK Prime Minister Keir Starmer as well as US officials, he said. 'This is a very difficult topic,' Zelenskiy added. Ukrainian companies have started manufacturing interceptor drones, and about $6 billion is required urgently to ramp up production, the president said. 'A clear task has been set for the manufacturers: Ukraine must be capable of deploying at least 1,000 interceptors per day within a defined timeframe,' Zelenskiy said in a post on social media platform X on Friday after visiting a drone production facility. 'Government officials are ensuring contracting is in place, and we are also working constantly with our partners to prevent any funding shortages,' he said. While he told reporters the US has agreed to buy drones designed and produced in Ukraine, Zelenskiy said he's seeking a contract worth between $10 billion and $30 billion. Defense Minister Denys Shmyhal, National Security and Defense Council Secretary Rustem Umerov and Presidential Adviser Oleksandr Kamyshin have been tasked with handling the negotiations, he said. The president said that Ukrainian forces had made 'solid progress' in stalling Russian advances on the battefield. The situation in the northeastern Sumy region was now significantly better for Kyiv, though Russia remains focused on gains in the area as well as toward Pokrovsk, while the Dnipropetrovsk region 'is very much desired by them,' he said. Zelenskiy said the third round of peace talks between Ukraine and Russia in Istanbul on Wednesday yielded some progress toward preparing a meeting with Putin. Russian officials have said there's little point to a summit before the sides have negotiated an agreement to end the war. This article was generated from an automated news agency feed without modifications to text.


Mint
an hour ago
- Mint
Investors eye possible US-Europe trade deal as deadline looms
NEW YORK, July 26 (Reuters) - Investors are hopeful a potential trade deal between the U.S. and European Union could bring more certainty to markets ahead of next Friday's tariffs deadline. European Commission President Ursula von der Leyen was set to meet U.S. President Donald Trump on Sunday in Scotland after EU officials and diplomats said they expected to reach a framework deal this weekend. Trump on Friday said there was a 50-50 chance or perhaps less that the U.S. would reach a trade agreement with the EU. Trade tensions between the U.S. and Europe may have provided some investors with a rationale to be cautious, said Sameer Samana, head of global equities and real assets at the Wells Fargo Investment Institute. "It's one of our largest trading relationships... So if that last piece falls into place, then you've probably got at the margin more people that have to get back in the markets," Samana said. "It's been a source of uncertainty that will go away." A deal would likely include a 15% baseline tariff on all EU goods entering the U.S. and probably a 50% tariff on European steel and aluminum, the officials and diplomats said. Optimism over easing trade tensions broadly has helped push U.S. stocks to record highs. Trump's April 2 "Liberation Day" announcement of sweeping global tariffs sent stocks plunging in the immediate aftermath, due to spiking fears about a recession that have since faded. Still, investors have been bracing for increased volatility heading into August 1, which the U.S. has set as a deadline for raising levies on a broad swath of trading partners. The EU is facing U.S. tariffs on more than 70% of its exports - 50% on steel and aluminum, 25% on cars and car parts and a 10% levy on most other EU goods, which Trump has said he would hike to 30% on August 1. Hopes for a deal with Europe rose after Trump struck a trade agreement with Japan earlier in the week. "The deal with Japan and the likely one soon with the EU are especially important given both are major U.S. trading partners, together accounting for about a quarter of all goods imports," analysts at Capital Economics said in a note on Friday. In the agreement with Japan, the country's auto sector, which accounts for more than a quarter of its U.S. exports, will see existing tariffs cut to 15% from levies totaling 27.5% previously. An agreement that also lowers EU auto tariffs to 15% "would be no small deal" for the region as well, as about 10% of its shipments to the U.S. are in the same category, Capital Economics said. Investors over the weekend were also watching for developments on trade between the U.S. and China. Officials from the two countries plan to meet in Stockholm next week to discuss extending an August 12 deadline for negotiating a deal. (Reporting by Lewis Krauskopf; Editing by Alden Bentley and Edward Tobin)