Stocks slip, yen gains on Trump trade war, China deflationary pressure
Europe's broader STOXX 600 regional benchmark fell by as much as around 1%, just as a gauge of equity volatility nudged up to a fresh 7-month high above 23 points.
"This week is a big week, we have some massive policy decisions coming up that potentially define not only the next quarters but possibly the years to come," said James Rossiter, head of global macro strategy at TD Securities.
Stock investors were holding back because of a lack of conviction amid the uncertainty, Rossiter added.
European Union finance ministers this week are set to discuss how to pay for defence through new joint borrowing, existing EU funds and a greater role for the European Investment Bank.
German leaders agreed last week to overhaul state borrowing rules to boost defence spending and also set aside 500 billion euros ($541 billion) for infrastructure investments over 10 years.
Investors looked ahead to Germany's inflation figures later this week, a reading that comes as European Union trade tensions with the United States simmer.
In the U.S., Federal Reserve speakers scheduled to speak include Chair Jerome Powell on the U.S. economic outlook.
China's consumer price index fell at the sharpest pace in 13 months in February, data showed, while producer price deflation persisted in the latest hit to consumer confidence in the world's second-biggest economy.
China's blue-chip CSI300 Index closed 0.4% lower, while the Shanghai Composite Index eased 0.2%. Hong Kong's benchmark Hang Seng fell 1.9%.
The yen strengthened 0.7% to 146.975 per dollar.
Beijing pledged more stimulus to boost consumption and foster innovation in artificial intelligence at the start of the week-long National People's Congress meeting that runs until Tuesday.
'CAVALIER'
U.S. President Donald Trump in a Fox News interview on Sunday declined to predict whether his tariffs on China, Canada and Mexico would result in a U.S. recession.
A run of soft U.S. economic data continued on Friday after monthly figures showed the labour market created fewer jobs than expected in February, in the first payrolls report capturing Trump's policies.
"I think it's Trump's cavalier approach to economic policy that's rattling sentiment," said Kyle Rodda, senior financial markets analyst at Capital.com.
"Unlike during his first administration, where signs of an economic slowdown or market correction would see a pivot on policy, he is genuinely focused on significant, structural change to the economy - even if it comes at the expense of short-term growth."
The 10-year U.S. Treasury yield dropped 7 basis points to 4.2474% and the two-year yield fell 6 bps to 3.945%.
The U.S. dollar index, which measures the currency against six others, was steady at 103.61.
The euro edged up 0.3% to $1.0865 and sterling was little changed at $1.2926.
In his latest warning to Canada, Trump said on Friday that reciprocal tariffs on dairy and lumber could be imminent.
"For those struggling to keep up, that means that Canadian tariffs were imposed on Tuesday, tweaked on Wednesday, delayed on Thursday, then expanded again on Friday," said Michael Brown, senior research strategist at Pepperstone.
"In that sort of an environment, it is frankly impossible for any market participant to price risk."
The U.S. president also said he is strongly considering sanctions on Russian banks and tariffs on Russian products to try and bring a speedy end to the war in Ukraine.
Crude oil rose with both Brent and U.S. West Texas Intermediate crude last up by around 20 cents at $70.53 and $67.20, respectively, a barrel.
Cryptocurrency bitcoin lost as much as 7.2% from Friday to reach its lowest this month at $80,085.42, and was last at $82,040.
The long-awaited executive order on creating the reserve came on Friday, but disappointed many investors by saying there would be no additional buying of bitcoin.
(Reporting by Nell Mackenzie and Kevin Buckland; Editing by Lincoln Feast, Kirsten Donovan)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Zawya
an hour ago
- Zawya
Citi Renews Coverage of Fosun International with a "Buy" Rating
HONG KONG SAR - Media OutReach Newswire - 25 July 2025 - Citi issued its latest report on 23 July, announcing the renewing coverage on Fosun International ( with a "Buy" rating and a target price of HKD5.86. Citi has made material changes to its financial estimates on Fosun International, expecting core profit for financial year 2025 to grow by 197% year on year to RMB2.2 billion (excluding the one-off non-cash loss of RMB5.1 billion from Cainiao in financial year 2024). It also expects an 81% year-on-year profit growth in financial year 2026, primarily driven by the earnings recovery at the "Happiness" segment and lowered finance costs from the Group's proactive deleveraging efforts. Citi also highlights that Fosun is accelerating its "strategic advancements and exits" strategy, targeting to divest over RMB80 billion in heavy assets and non-core assets. By end of June 2025, Fosun completed the sale of all its 99.743% stake in the German private bank HAL, while retaining the asset servicing business HAFS. Citi believes that the capital recycling from asset divestments will enhance shareholders' returns and narrow the net asset value discount. The report points out that Fosun's current share price trades at a 71% discount to its net asset value. Despite its stock performance outperforming the Hang Seng Index over the past 30 days (+14% vs. +7%), its valuation still has significant room for recovery. Citi is optimistic about Fosun International's future earnings improvement and the re-rating potential brought by its deleveraging strategy, thus assigning a "Buy" rating to Fosun International. Hashtag: #Fosun #復星國際 The issuer is solely responsible for the content of this announcement. Fosun International
Middle East Eye
7 hours ago
- Middle East Eye
Why Trump is trying to put his seal on an Armenia-Azerbaijan peace deal
The US is using "magic" to bring Armenia and Azerbaijan together for a peace deal, US President Donald Trump says. As the two historic foes appear to inch closer to an agreement, the Trump administration is conjuring diplomacy in the South Caucasus - fairly uncharted waters for the US. In May, Trump's billionaire Middle East envoy, Steve Witkoff, said that Armenia and Azerbaijan could both join the Abraham Accords - the normalisation agreement that Israel signed with Bahrain, the UAE and Morocco in 2020 - after a deal between the two. Trump considers the accords a signature part of his foreign policy. Then, in July, Trump's other good friend and billionaire envoy, Tom Barrack, said the US was ready to sign a 100-year lease on a strategic transit corridor on Armenia's border with Iran. Baku wants to use the sliver of land, referred to as the Zangezur Corridor by Turkey and Azerbaijan, to connect with its exclave, called Nakhchivan, and eventually Turkey, where Barrack is also the US ambassador. New MEE newsletter: Jerusalem Dispatch Sign up to get the latest insights and analysis on Israel-Palestine, alongside Turkey Unpacked and other MEE newsletters Trump's bid to put his stamp on a peace agreement through economic deals and the Abraham Accords comes as the South Caucasus is in flux. Trump, Turkey and a diplomatic win Russia, the region's historic great power, is tied down on the battlefields of Ukraine. Its prestige as a security guarantor was undermined in 2023 when Azerbaijan wrested back control of Nagorno-Karabakh from Armenia in a lightning offensive. Christian Armenia had long relied on Russia for support against Turkic Azerbaijan. To the south, Iran - which has deepened its ties with Armenia and is wary of Israel's security links to Baku - is trying to regroup after a blistering 12-day conflict with Israel. Tehran's ability to project power abroad was clipped by Israel's takedown of its ally Hezbollah in Lebanon and the collapse of Bashar al-Assad's government in Syria late last year. 'The status quo benefits Iran a lot. Right now it is the only connector between Azerbaijan and Nakhchivan' - Alen Shadunts, American University of Armenia With Russia distracted in Ukraine and Iran on the back foot, Turkey's power in the region is growing. The US itself is signalling that it can work with Turkey as the predominant external power in Syria. Barrack's role in the Armenia-Azerbaijan peace talks, experts say, is further evidence that Washington sees Ankara as a new regional power in the South Caucasus. "Trump doesn't have a stake in either Armenia or Azerbaijan. But he sees that a deal is possible. A win," George Meneshian, an Athens-based expert on the Middle East and Caucasus, told Middle East Eye. The US's foray into the region is led by Barack, who has been well received in Ankara. That has fueled concerns that Trump sees the region as an extension of Turkey's neighbourhood, Meneshian added. "The US is already giving Turkey its own zone of influence in Syria. That is clear. The same is happening in the South Caucasus," he said. The goodwill was visible on Tuesday when Trump shared a social media post of Azerbaijan's President Ilham Aliyev thanking him for his "aspiration" to end the dispute with Armenia. Aliyev praised Trump's "fundamental values, including family values" that he said mirror Azerbaijan's. From Syria and Gaza to Ukraine and the Caucasus The idea of the US leasing the corridor is in keeping with the Trump administration giving primacy to economic dealmaking, including with US control over physical assets, in conflict zones. It has had mixed results. Earlier this year, Trump said the US would take over the Gaza Strip, evict Palestinians and turn it into the Middle East's "Riviera". That proposal was widely slammed as calling for the ethnic cleansing of Palestinians. Israel continues to invoke the "Trump plan" to insist on the forced displacement of Palestinians. The US backed off after resistance from its Arab allies. 'Trump doesn't care about the European Union. In the Caucasus, that is especially obvious' - George Meneshian, Caucasus expert Trump's penchant for business deals in countries where sectarian and regional tensions are rife has been better received by Turkey and Gulf states in Syria, where he has pushed through the speedy lifting of sanctions. The Zangezur Corridor idea seems to fall closer to the minerals deal Trump signed with Ukraine in April. That agreement set up a joint fund to monetise Ukraine's mineral wealth. Earlier this year, Trump also said EU states would purchase air-defence systems from the US on Ukraine's behalf. Azerbaijan, a major gas exporter, flaunts the sort of energy riches that Trump prizes, but Armenia is poor. The South Caucasus's value to the US is that the region is crisscrossed by trade routes, including the Middle Corridor that aims to link Asia and Europe, bypassing both Russia and Iran. Peter Frankopan, an expert on trade routes at the University of Oxford, told MEE that having a third party operate the corridor "is not a bad idea in principle", but faces obstacles. "First, the US proposal is that it is a commercial endeavour – which means it needs to be run for profit. So an operator needs to be clear and certain that it can make a return on investments," he said. In January, Armenia replaced Russian troops at its southern border crossing to Iran with its own forces. Moscow continued to oversee the crossing after the collapse of the Soviet Union. "Russia is likely to react badly to any US presence [in the corridor], whether commercial or notionally benign," Frankopan, the author of Silk Roads, added. A US presence would also unnerve Iran. 'If the border opens, Iran loses' The Islamic Republic of Iran and Armenia enjoy good ties. Iran's parliament allocates three seats for members of its Armenian minority. Earlier this year, the two conducted joint military drills. Both countries are wary of Turkey and Azerbaijan's growing power in the region. "The status quo benefits Iran a lot," Alen Shadunts, an Iran specialist at the American University of Armenia, told MEE. "Iran right now is the only connector between Azerbaijan and Nakhchivan." With no direct land link now, Azerbaijani trucks have to pass through Iran to reach the exclave. Azerbaijan also relies on Iran to help supply electricity to Nakchivan. That has been a source of leverage for Iran to use against Azerbaijan since the end of the Cold War. "If the border opens, Iran is going to lose," Shadunts said. "There are suspicions of an Israeli presence in Azerbaijan already. If an American company comes in and leases the corridor, Iran may see that as encirclement." Iran's President Masoud Pezeshkian (R) shaking hands with Armenia's Prime Minister Nikol Pashinyan (L) during a meeting in Tehran on 30 July 2024 (ARMENIAN PRESIDENTIAL PRESS SERVICE / AFP) Iran has also received a $1.4bn loan from Russia to complete a rail link for the International North-South Transport Corridor that will run from Russia through Azerbaijan to Iran's coast. The route is intended to cut travel time between India and Russia. Trade between the two hit $68bn in 2024 - more than four times the amount it stood at before western sanctions were slapped on Russia in response to the Ukraine war. Azerbaijan already has deep security ties with Israel. Baku has been hosting talks between Syria and Israel. The city is so swarming with Israeli spies that Iranian officials have accidentally bumped into them at the same restaurant, MEE has reported. Armenia also has diplomatic relations with Israel. But Steve Witkoff said in May that the US was looking to bring both countries into the Abraham Accords. Regional analysts say that could mean more economic ties. "Armenia is interested in connectivity with Israel. Any regional project could be a lifeline for resource-poor Armenia," Shadunts said. Will the US manage the Zangezur Corridor? Barrack's offer to lease the Zangezur Corridor faced backlash in Armenia. Experts say the idea for a 100-year lease that Barrack floated in public would go against Armenia's constitution. Armenian President Nikol Pashinyan is already under pressure from an escalating feud with Armenia's Catholic Apostolic Church and faces resentment from pro-Russian voters who are wary of the country's tilt to the US. 'The US proposal is a commercial endeavour – which means it needs to be run for profit' Peter Frankopan, author Silk Roads Pashinyan's bid to reach a peace deal with Azerbaijan, with an eye towards normalising with Armenia's bigger neighbour, Turkey, has been met with wariness. Resentment and anger over Ottoman atrocities against Armenian Christians in the final years of WWI, which many historians label a genocide, still feel warm to the touch. Armenia is still reeling from its 2023 military loss to Azerbaijan, and is worried its neighbour harbours territorial designs on its southern Syunik province, where the corridor sits. For its part, Azerbaijan does not want the corridor to be controlled strictly by Armenia. "They're arguing over 32 kilometres of road, but this is no joke. It's been going on for a decade – 32 kilometres of road," Barrack said earlier this month in a press briefing. "So what happens is America comes in and says, 'Okay, we'll take it over. Give us the 32 kilometres of road on a hundred-year lease, and you can all share it'." Azerbaijani President Ilham Aliyev at a military parade, 8 November 2023 (AFP) Pashinyan confirmed in July that the US gave "proposals" to manage the corridor. The idea has been around for years, Olesya Vartanyan, a conflict analyst in the South Caucasus, told MEE: "Before the Americans, the Europeans were floating this." She said it drew inspiration from projects in Georgia, Armenia and Azerbaijan's northern neighbour. More than a decade ago, Switzerland mediated a US-backed deal that saw corridors established through two breakaway Georgian regions controlled by Russia to enable trade. European powers floated a corridor deal based on that model to Armenia and Azerbaijan. "People in the region were waiting for Trump to come in. There is an interest to engage with the administration. It's not like they have a well-crafted plan, but the Americans are willing to adjust." Barrack's comments caught many US diplomats off guard, one former US official briefed by colleagues told MEE. "This is very top-down. Barrack is a one-man show. He has a relationship with Erdogan and Trump. He feels that is all he needs," the official said. The Trump administration's language, as well as those involved in the diplomacy efforts, seem to suggest that this US government sees the South Caucasus as closer to the Arab Middle East than Europe. "Trump doesn't care about the European Union. In the Caucasus, that is especially obvious," Meneshian told MEE. 'Turkey is in the middle of all of it, just like Azerbaijan and Armenia' Tom Barrack, US envoy and Ambassador to Turkey Meneshian said the focus on the Abraham Accords "says something" about the true balance of power on the ground. In 2023, the UAE emerged as the largest source of Foreign Direct Investment in Armenia. The Emirates state-owned renewable energy company Masdar is working on construction of Armenia's largest solar energy plant. It already has a plant in Azerbaijan. Latching onto that trade would help Witkoff package a deal to Trump with his seal on it. But the US does face real economic competition. Last week, Armenia applied to join the Shanghai Cooperation Organization (SCO), a Chinese-led regional security and trade club. "It's dealing and trading with everybody," Barrack said. "Where East meets West with the Bosphorus and Dardanelles; with the Black Sea, the Aegean Sea, the Mediterranean Sea, the Spice Road – everything comes through there. "Turkey is in the middle of all of it, just like Azerbaijan and Armenia."
The National
8 hours ago
- The National
UAE and US working to 'get chips moving' after AI deal
After this week's debut of the White House's Artificial Intelligence Action Plan, the UAE is ready to expedite its AI partnership with the US. This follows President Donald Trump's visit to Abu Dhabi in May, when he announced the US-UAE AI Acceleration Partnership, which included plans for a 5GW UAE-US AI Campus. Those plans allow for the UAE to obtain powerful CPUs and GPUs from the US which are necessary to build up AI infrastructure. Once completed, part of the campus, dubbed Stargate UAE, will be among the largest AI data centres in the world. Security guarantees to protect the UAE AI technology from falling into the wrong hands were are major aspect of the deal. Also bolstering the deal, Mr Trump's much-anticipated AI plan, unveiled on Wednesday, seeks to reduce regulatory barriers in place to build up AI infrastructure in the US, while pushing for increasing the prevalence of US AI technology around the world. That bodes well for the UAE, and other countries with similar AI aspirations. It's also a sharp contrast to the former president Joe Biden's policies. His administration sought tighter export controls on US chips to prevent them from being used in China. 'The UAE welcomes President Trump's AI Action Plan and is ready to fast track our strategic AI partnership with the US,' Yousef Al Otaiba, UAE Minister of State and ambassador to the US, said on Wednesday. 'As a trusted partner, we are working closely with leading US companies to adopt and scale American technology in the UAE and beyond.' Some pundits aren't sold however, and they're trying to exert influence to slow the US-UAE AI Acceleration Partnership. In an opinion article in The Washington Post, Christopher Chivvis and Sam Winter-Levy from the Carnegie Endowment, a US-based think tank, expressed concern about China somehow getting access to the US AI technology, among other things. 'To now approve the offshoring of the data centres that will house so many of the resulting chips to another conflict-prone region would be a major unforced error – one that will prove difficult to reverse,' they wrote. The UAE has addressed this by committing to a $1.4 trillion investment framework for AI infrastructure in the US. Regardless, the Wall Street Journal also reported that some in the White House have sought to take a closer look at the recently announced UAE deal, amid concerns about US technology diffusion. But last week, the White House cryptocurrency and artificial intelligence adviser beat back those concerns, and reaffirmed the US partnership with the UAE. 'These are countries that are long-standing partners and allies of the US going back many years,' White House AI chief David Sacks said during a round-table discussion at the Pennsylvania Energy and AI Summit, referring to the UAE. Mr Sacks added that the Trump administration thought that if US technology wasn't used in AI projects around the world, China-owned Huawei would step in to fill the vacuum. 'We don't want to create demand for Huawei,' he explained, also describing some of the chip smuggling scenarios that have become prevalent in media reports as quixotic. He said the newest standard data centres technology hardware is approximately 2.4m tall, with servers weighing 1,600kg, and that it's 'very easy to see' if they're being transported. 'I know that our Gulf State partners would honour our security agreement,' he said just hours before President Trump appeared at the event in Pennsylvania. 'This is ultimately a trust-but-verify situation, and all we have to do is send an inspector to a data centre and they can count the racks,' Mr Sacks explained, reiterating that he felt the scenarios of AI hardware smuggling were 'blown wildly out of proportion.' Meanwhile, there's no indication from the White House or Department of Commerce, which is ultimately responsible for allowing the export of US technology, that criticism of the UAE deal is gaining traction. In a statement to The National, the UAE ambassador expressed continued optimism about the AI plans with the US announced back in May. 'Signed just 60 days ago in Abu Dhabi, the UAE-US investment and Ai partnership will deliver enormous benefits to both countries,' Mr Al Otaiba said. 'High level teams have been actively engaging to advance the agreement, to get chips moving and to accelerate technology co-operation.'
