Asian stocks steady as investors brace for tariff deadline and Fed
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3 per cent, led by gains for Taiwanese stocks , after US stocks ended the previous session with mild losses as traders braced for a slew of corporate earnings.
Australian shares were up 0.7 per cent, while Japan's Nikkei stock index slid 0.03 per cent, and Hong Kong's Hang Seng Index skidded 0.4 per cent. The euro edged up from a one-month low, rising 0.2 per cent to US$1.1564, as markets weighed the EU's trade deal with the Trump administration.
Traders are preparing for several central bank decisions, key economic reports and corporate earnings during the next few days, culminating in US President Donald Trump's August 1 tariff deadline.
The Federal Reserve is expected to leave interest rates unchanged at its policy meeting later on Wednesday, though it could see a rare dissent by some central bank officials in favour of lower borrowing costs.
"With labour market conditions near full employment, most Fed officials want to wait and see how tariffs impact inflation," said Tom Kenny, senior international economist at ANZ in Sydney.
Some officials are concerned that tariffs could drive higher inflation expectations, leading to more persistent price pressures rather than a one-off hit, he said on a podcast. "Our expectation is that the Fed should be in a position to cut rates at the September meeting."
US Treasury bonds advanced ahead of the Fed's meeting, pushing yields to the lowest in almost four weeks following a strong auction of seven-year notes that quelled concerns about diminishing demand for government debt.
The yield on benchmark 10-year Treasury notes was last 4.328 per cent, the lowest level since July 3. The two-year yield, which rises with traders' expectations of higher Fed fund rates, was little changed at 3.873 per cent.
TARIFFS, CORPORATE EARNINGS
The Bank of Japan is expected to hold steady on Thursday and the focus will be on its comments to gauge when the next rate increase will come after a trade deal between Japan and the US cleared the way for the BOJ to resume its rate-hike path.
Ahead of Trump's deadline to reach a deal to avert imposition of the "Liberation Day" tariffs, some countries' talks with the US looked set to go down to the wire.
US and Chinese officials agreed to seek an extension of their 90-day tariff truce on Tuesday, though no major breakthroughs were announced.
US officials said it was up to President Trump to decide whether to extend a trade truce that expires on August 12 or potentially let tariffs shoot back up to triple-digit figures.
India is also bracing for higher US tariffs — likely between 20 per cent and 25 per cent — on some exports as it holds off on fresh trade concessions ahead of the August 1 deadline, two Indian government sources said.
Meanwhile, three South Korean cabinet-level officials met with US Commerce Secretary Howard Lutnick in a last-ditch push for a deal.
Oil prices rose as potential supply shortages came into focus after Trump gave Moscow an abbreviated deadline toward ending the war in Ukraine. Brent crude futures rose 14 cents, or 0.19 per cent, to US$72.65 a barrel.
US tech megacaps Microsoft and Meta are due to report earnings on Wednesday that will set the tone for the rest of the week and the earnings season.
"It's been a solid US reporting season so far, but these megacap names need to run it hot and blow the lights out, given the bar to please has been sufficiently raised," said Chris Weston, head of research at Pepperstone.
The Singapore dollar strengthened 0.2 per cent after Singapore's central bank kept its monetary policy settings unchanged on Wednesday following stronger-than-expected economic growth in the second quarter.
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The Star
41 minutes ago
- The Star
India aghast at Trump's ‘dead' economy jibe, 25% tariffs
NEW DELHI: Shock, dismay and angst swept across India as businesses, policymakers and citizens digested US President Donald Trump's sharp remarks and a surprise 25% tariff rate earlier this week. While Indian government officials weighed a response and business groups tallied the cost of the trade barrier, the local social media flared up with users protesting Trump's comments and criticising Indian Prime Minister Narendra Modi for not speaking up. It started with Trump saying that India's trade barriers were the "most strenuous and obnoxious,' in a Truth Social post July 30. He added the US may also impose a penalty for New Delhi's purchase of Russian weapons and energy. Less than a day later, he ripped into India again for aligning with Russia, calling them "dead economies' in another post. With no imminent trade deal, the 25% tariffs kicked in as of Friday. India is hardly alone in facing Trump's trade wrath - and not the subject to the very highest rates - but the news left business and political leaders wondering how to cope with the fallout. "Overnight, the US-India trade equation shifted from tense to turbulent,' said Akshat Garg, assistant vice president at Choice Wealth, a Mumbai based financial services firm. The levies "feel less like structured policy and more like a blunt-force political message.' Complicating the narrative around the India trade deal - or the lack of it - was the US pact with its traditional rival Pakistan that came through on the same day. As the US released rates across the world on Aug. 1, India's relative disadvantage to competitor exporting countries became more apparent, dampening moods and stoking tempers further. "The biggest blow is that Pakistan and Bangladesh got a better rate than us,' V. Elangovan, managing director at SNQS Internationals, an apparel maker in the south Indian manufacturing hub of Tirupur, told Bloomberg News. "We were expecting something in the 15 to 20% range.' India's annoyance can be traced back in part to Trump declaring himself the peacemaker that helped broker a ceasefire in the armed conflict between India and Pakistan in May. The move was seen as an effort to upstage Modi and put the two South Asian neighbours on an equal footing, despite India's larger military and economy. The events of this week have cemented that impression further in the eyes of some Indian observers. When the tariff rate news first dropped in late Wednesday evening in India, Ashish Kanodia recalls being "very disturbed.' A director at Kanodia Global, a closely held exporter that gets over 40% of its revenue from the US selling home fabrics to toys, the entrepreneur already has two of its largest US customers seeking discounts to make up for the levy. "The next six months are going to be difficult for everyone,' Kanodia said, adding that profit margins will be squeezed. If the pain continues for "months and months,' he said he'll have to start cutting his workforce. The US is India's largest trading partner, with the two-way trade between them at an estimated US$129.2 billion in 2024. Compared with India's 25%, Bangladesh was subjected to a 20% tariff, Vietnam got a 20% levy and Indonesia and Pakistan each received 19% duties. "We know that we have got a deal that is worse than other countries,' said Sabyasachi Ray, executive director at The Gem and Jewelry Export Promotion Council. "We will take it up with the government.' Trump's actions mark a 180-degree turn for New Delhi's hopes of preferential treatment over regional peers. It was among the first to engage Washington in trade talks in February, confident of hammering out a deal sooner than others. Trump had called India's Prime Minister Narendra Modi "my friend' in a Feb 14 post on X and the bond between the two countries "special.' India is now weighing options to placate the White House, including boosting US imports, Bloomberg News reported citing people familiar with the matter, and many hope that the bilateral relationship and the tariff rate can still be improved. "It is a storm in the India-US relationship at this moment but I think there's a good chance that it will go away,' Vivek Mishra, deputy director of the Strategic Studies Programme at Delhi based Observer Researcher Foundation, told Bloomberg News. Indian business and trade groups are supporting the government's stance on the deal as the negotiations for a US-India trade deal continue. Jewelry businesses "are worried but they are not panicking' because they hope a more favourable deal can be worked out, said Ray of the gems export body. "The negotiation that should be happening should be a win-win, not a win-lose.' The abrupt announcement by Trump over social media when negotiations with India were ongoing "seems like a knee-jerk reaction,' according to Rohit Kumar, founding partner at public policy research firm The Quantum Hub. "This appears to be a negotiating tactic aimed at unresolved discussion points,' Kumar said. - Bloomberg
The Star
41 minutes ago
- The Star
A defining week for Anwar Ibrahim's leadership
KUALA LUMPUR: It has certainly been a defining week for Prime Minister Datuk Seri Anwar Ibrahim as he notched double wins at the diplomatic and economic fronts, which even his opponents would find difficult to fault. He has certainly been in top form as he brokered a ceasefire between Thailand and Cambodia, orchestrating a diplomatic breakthrough, and then went on to make a call to United States President Donald Trump at 6.50 am. Anwar received plenty of messages from world leaders congratulating him on the handling of the potentially dangerous conflict between two neighbouring countries. It was a huge test for him as the Chair of Asean, but he pulled off magnificently as he brought the leaders of Thailand and Cambodia to Kuala Lumpur for a dialogue. He also made sure that officials from the US and China, the two important players in the region, were present to observe the talks. It is also evident that Malaysia's neutral posture of not taking sides has shown positive results, as that brought the two countries, locked in conflict, to the negotiating table. Trump himself reportedly intervened in the ceasefire negotiations by threatening both parties with heavy tariffs, but Malaysia's central role in mediating the agreement gave it diplomatic capital. At the same time, Malaysia scored a much-needed economic reprieve after the US agreed to scale back steep tariffs that had been threatening Malaysia's export-driven economy. At one point, Washington had threatened Malaysia with reciprocal tariffs of up to 25% in retaliation for what it claimed were unfair trade practices and currency. This week, the White House agreed to lower the rate to 19 per cent, offering breathing room to Malaysia's key sectors, especially electronics and palm oil. The sound of relief could be heard across the nation. Without doubt, Anwar was properly prepared by officials for his telephone conversation with Trump. But as many world leaders would know, an element of uncertainty can also be expected when dealing with Trump, as some US allies have ended up with high tariffs. Both cases, which Anwar handled well, demonstrated strategic diplomacy which was carried out with precision and the personal charm offensive, which Anwar is good at. By now, world leaders would have watched how Anwar has the ability to lift up the phone to call his counterparts. The world will certainly now see that there is value in Malaysia as a stabilising force and an economic partner. The week has not just been a personal success for Anwar and his government, but as one analyst put it, they are a reminder that middle powers like Malaysia can shape outcomes when they choose engagement over posturing. Thai veteran journalist Kavi Chongkittavorn wrote that Anwar has now positioned himself as a peacemaker. "Asean is doing a somersault. It just needs decisive leadership,' he said, pointing out that Anwar got the US and China to be present, which was another coup, as "both superpowers rarely collaborate on anything these days. Yet both sent envoys to support the Asean Chair's initiative.' These successes are not just wins for Anwar's government; they are reminders that middle powers like Malaysia can shape outcomes when they choose engagement over posturing. Writing in the Thai PBS World, he described that on the regional stage, "PMX just had his finest hours.'' On the economic front, Malaysia has ended up having the same 19% tariff as Indonesia and the Philippines. However, in Jakarta and Manila, there has been reported unhappiness that they have given in too much to Trump. Malaysia stood its ground that it would not allow the red lines to be crossed, particularly on its Bumiputera policy during negotiations. To the protestors who turned up by the thousands calling on Anwar to step down, they may not understand headlines like tariffs or ceasefires, but this week's developments demonstrated the importance of leadership. * Datuk Seri Wong Chun Wai is a National Journalism Laureate and chairman of the Malaysian National News Agency (Bernama).
Borneo Post
41 minutes ago
- Borneo Post
A defining week for Anwar Ibrahim's leadership
Prime Minister Datuk Seri Anwar Ibrahim (centre) with Cambodian Prime Minister Hun Manet (left) and Thailand's Acting Prime Minister Phumtham Wechayachai (right) during a press conference at the Special Joint Meeting held at the Seri Perdana Complex on July 28. – Bernama photo KUALA LUMPUR (Aug 2): It has certainly been a defining week for Prime Minister Datuk Seri Anwar Ibrahim as he notched double wins at the diplomatic and economic fronts, which even his opponents would find difficult to fault. He has certainly been in top form as he brokered a ceasefire between Thailand and Cambodia, orchestrating a diplomatic breakthrough, and then went on to make a call to United States President Donald Trump at 6.50 am. Anwar received plenty of messages from world leaders congratulating him on the handling of the potentially dangerous conflict between two neighbouring countries. It was a huge test for him as the Chair of ASEAN, but he pulled off magnificently as he brought the leaders of Thailand and Cambodia to Kuala Lumpur for a dialogue. He also made sure that officials from the US and China, the two important players in the region, were present to observe the talks. It is also evident that Malaysia's neutral posture of not taking sides has shown positive results, as that brought the two countries, locked in conflict, to the negotiating table. Trump himself reportedly intervened in the ceasefire negotiations by threatening both parties with heavy tariffs, but Malaysia's central role in mediating the agreement gave it diplomatic capital. At the same time, Malaysia scored a much-needed economic reprieve after the US agreed to scale back steep tariffs that had been threatening Malaysia's export-driven economy. At one point, Washington had threatened Malaysia with reciprocal tariffs of up to 25 per cent in retaliation for what it claimed were unfair trade practices and currency. This week, the White House agreed to lower the rate to 19 per cent, offering breathing room to Malaysia's key sectors, especially electronics and palm oil. The sound of relief could be heard across the nation. Without doubt, Anwar was properly prepared by officials for his telephone conversation with Trump. But as many world leaders would know, an element of uncertainty can also be expected when dealing with Trump, as some US allies have ended up with high tariffs. Both cases, which Anwar handled well, demonstrated strategic diplomacy which was carried out with precision and the personal charm offensive, which Anwar is good at. By now, world leaders would have watched how Anwar has the ability to lift up the phone to call his counterparts. The world will certainly now see that there is value in Malaysia as a stabilising force and an economic partner. The week has not just been a personal success for Anwar and his government, but as one analyst put it, they are a reminder that middle powers like Malaysia can shape outcomes when they choose engagement over posturing. Thai veteran journalist Kavi Chongkittavorn wrote that Anwar has now positioned himself as a peacemaker. 'ASEAN is doing a somersault. It just needs decisive leadership,' he said, pointing out that Anwar got the US and China to be present, which was another coup, as 'both superpowers rarely collaborate on anything these days. Yet both sent envoys to support the ASEAN Chair's initiative.' These successes are not just wins for Anwar's government; they are reminders that middle powers like Malaysia can shape outcomes when they choose engagement over posturing. Writing in the Thai PBS World, he described that on the regional stage, 'PMX just had his finest hours.'' On the economic front, Malaysia has ended up having the same 19 per cent tariff as Indonesia and the Philippines. However, in Jakarta and Manila, there has been reported unhappiness that they have given in too much to Trump. Malaysia stood its ground that it would not allow the red lines to be crossed, particularly on its Bumiputera policy during negotiations. To the protestors who turned up by the thousands calling on Anwar to step down, they may not understand headlines like tariffs or ceasefires, but this week's developments demonstrated the importance of leadership. – Bernama * Datuk Seri Wong Chun Wai is a National Journalism Laureate and chairman of the Malaysian National News Agency (Bernama). Anwar Ibrahim diplomatic economy wong chun wai
