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Asian Markets Rise as Trump Extends EU Tariff Deadline

Strategic Insights

— 1 min read

Asian stock markets edged higher on Monday, as President Donald Trump extended the deadline for trade talks with the European Union, boosting sentiment and lifting the euro. Nippon Steel jumped 4.3% after Trump expressed support for a US Steel deal, and the US dollar recovered as investors took the threat of tariffs off the table. Market analysts note that investors are shifting money out of the US to Europe and Asia as they price in a possible US recession and global slowdown.

Key Takeaways:

  • The deadline for trade talks between the US and EU has been extended to July 9, from June 1, as President Trump agreed to give the European Commission more time to reach a good deal.
  • Nippon Steel's share price jumped 4.3% after Trump expressed support for the company's $14.9 billion bid for US Steel, which soared 21% on Friday.
  • Analysts at Brown Brothers Harriman warned that the escalation of tariffs between the US and EU bodes ill for the entire world, particularly with the three countries accounting for 60% of global GDP.
  • Market sentiment was boosted as Trump's policy moves provided a temporary reprieve from growth-denting tariffs, and investors celebrated fresh trade deals with the UK and China.
  • Investors are shifting money out of the US to Europe and Asia as they price in a possible US recession and global slowdown.
  • The euro strengthened 0.3% to $1.1397, its highest since April 30, while the greenback recovered as much as 0.3% to 143.085 yen.
  • Apple's stock was caught in the trade crossfire, with Trump threatening a 25% levy on all imported iPhones bought by US consumers.
  • Japan's MSCI index inched up 0.12%, while the Nikkei was marginally higher.

Statistics:

  • 50% tariffs on EU goods, extended deadline till July 9.
  • Nippon Steel's share price jumped 4.3% on Monday.
  • US Steel's share price soared 21% on Friday.
  • 60% of global GDP accounted for by the US, EU, and China.
  • 0.3% strengthening of the euro to $1.1397 on Monday.
  • 0.3% recovery of the greenback to 143.085 yen.

Sources:

  • Reuters, SINGAPORE, May 26.
  • Brown Brothers Harriman.
  • (Reporting by Johann M Cherian in Singapore; Editing by Jamie Freed).

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