Write an article about Rounds of retaliation have raised US tariffs on imports from China to 145%. (EPA Images pic)
NEW YORK: Asian stocks and US equity-index futures rose along with the dollar as China and the US made “substantial progress” on their trade talks, spurring a risk-on mode.
Shares across the region gained at the open, with the Topix index rising for a 12th day for its longest winning streak since October 2017.
Futures contract for the S&P 500 and the Nasdaq 100 both climbed at least 1.3%, while gold fell 1.5% on easing demand for havens.
The greenback climbed against major peers and the yield on the 10-year US treasury rose 3 basis points.
While stocks have rallied recently – the S&P 500 Index has almost risen back to where it was prior to president Donald Trump’s announcement of reciprocal tariffs in early April – further gains will depend on the de-escalation of the trade war between the US and China.
The fear is that unless reversed, tit-for-tat tariffs risk dealing a stagflationary blow to global economies by driving them into recession while boosting inflation at the same time.
“Although investors are still waiting for details of the US-China agreement, the overall positive tone of the talks should boost their sentiment toward China and Asia-Pacific equity markets,” said Homin Lee, senior macro strategist at Lombard Odier Singapore Ltd.
Speaking after two days of negotiations in Geneva, US treasury secretary Scott Bessent and trade representative Jamieson Greer said that they will share more information today.
Greer told reporters “differences were not as large as maybe thought”.
Chinese officials echoed the message during a separate briefing yesterday, saying that talks between the two sides achieved a “sound sustainable development” for the Chinese-US relationship.
Rounds of retaliation have raised US tariffs on imports from China to 145%, while the Chinese have put in place a 125% duty on US goods.
Trump had paused the steepest of the tariffs on most countries other than China, sparking a rally in the S&P 500.
A trade deal struck with the UK last week also helped lift confidence that pacts were possible although the details disappointed.
India and Japan are also negotiating with the US on deals to lower tariffs.
“In reality, I think a lot of these trade deals are gonna take much longer to be nailed out,” said Sean Darby, managing director at Mizuho Securities Asia, on Bloomberg Television.
“There’s a lot more granularity to these trade deals.”
The US side had set a target of reducing tariffs below 60% as a first step that they feel China may be prepared to match, people familiar with the conversations said before the weekend.
Trump said on social media on Friday that an 80% levy “seems right!”
Trade pressures have already hit US businesses, with companies from United Parcel Service Inc to Ford Motor Co to Mattel Inc withdrawing earnings guidance.
The average member of the S&P 500 made 6.1% of its revenue from selling goods in China or to Chinese companies in 2024, according to an analysis from Bloomberg Intelligence.
Risk assets may also benefit from the ceasefire between India and Pakistan, as well as signs the leaders of Russia and Ukraine may meet this week.
“The de-escalation of trade, economic and geopolitical tensions could give market risk sentiment a boost,” said Valentin Marinov, head of G-10 FX research and strategy at Credit Agricole.
“The latest developments could become a boon for risk-correlated assets and currencies and a blow to safe-haven currencies like the yen, Swiss franc and even the euro.”
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Rounds of retaliation have raised US tariffs on imports from China to 145%. (EPA Images pic)
NEW YORK: Asian stocks and US equity-index futures rose along with the dollar as China and the US made “substantial progress” on their trade talks, spurring a risk-on mode.
Shares across the region gained at the open, with the Topix index rising for a 12th day for its longest winning streak since October 2017.
Futures contract for the S&P 500 and the Nasdaq 100 both climbed at least 1.3%, while gold fell 1.5% on easing demand for havens.
The greenback climbed against major peers and the yield on the 10-year US treasury rose 3 basis points.
While stocks have rallied recently – the S&P 500 Index has almost risen back to where it was prior to president Donald Trump’s announcement of reciprocal tariffs in early April – further gains will depend on the de-escalation of the trade war between the US and China.
The fear is that unless reversed, tit-for-tat tariffs risk dealing a stagflationary blow to global economies by driving them into recession while boosting inflation at the same time.
“Although investors are still waiting for details of the US-China agreement, the overall positive tone of the talks should boost their sentiment toward China and Asia-Pacific equity markets,” said Homin Lee, senior macro strategist at Lombard Odier Singapore Ltd.
Speaking after two days of negotiations in Geneva, US treasury secretary Scott Bessent and trade representative Jamieson Greer said that they will share more information today.
Greer told reporters “differences were not as large as maybe thought”.
Chinese officials echoed the message during a separate briefing yesterday, saying that talks between the two sides achieved a “sound sustainable development” for the Chinese-US relationship.
Rounds of retaliation have raised US tariffs on imports from China to 145%, while the Chinese have put in place a 125% duty on US goods.
Trump had paused the steepest of the tariffs on most countries other than China, sparking a rally in the S&P 500.
A trade deal struck with the UK last week also helped lift confidence that pacts were possible although the details disappointed.
India and Japan are also negotiating with the US on deals to lower tariffs.
“In reality, I think a lot of these trade deals are gonna take much longer to be nailed out,” said Sean Darby, managing director at Mizuho Securities Asia, on Bloomberg Television.
“There’s a lot more granularity to these trade deals.”
The US side had set a target of reducing tariffs below 60% as a first step that they feel China may be prepared to match, people familiar with the conversations said before the weekend.
Trump said on social media on Friday that an 80% levy “seems right!”
Trade pressures have already hit US businesses, with companies from United Parcel Service Inc to Ford Motor Co to Mattel Inc withdrawing earnings guidance.
The average member of the S&P 500 made 6.1% of its revenue from selling goods in China or to Chinese companies in 2024, according to an analysis from Bloomberg Intelligence.
Risk assets may also benefit from the ceasefire between India and Pakistan, as well as signs the leaders of Russia and Ukraine may meet this week.
“The de-escalation of trade, economic and geopolitical tensions could give market risk sentiment a boost,” said Valentin Marinov, head of G-10 FX research and strategy at Credit Agricole.
“The latest developments could become a boon for risk-correlated assets and currencies and a blow to safe-haven currencies like the yen, Swiss franc and even the euro.”
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