Stocks rise, euro firms after US-EU trade | Money News

By Ankur Banerjee

SINGAPORE (Reuters) -Global shares rose and the euro firmed on Monday after a trade settlement between the United States and the EU lifted sentiment and offered some readability in a week of key coverage conferences by the Federal Reserve and the Bank of Japan.

The U.S. struck a framework trade settlement with the European Union, imposing a 15% import tariff on most EU items – half the threatened fee, a week after agreeing to a trade deal with Japan that lowered proposed tariffs on auto imports.

Countries are scrambling to finalise trade offers forward of an August 1 deadline set by U.S. President Donald Trump, with talks between the U.S. and China set for Monday in Stockholm amid expectations of one other 90-day extension to the truce between the world’s high two economies.

“A 15% tariff on European goods, forced purchases of U.S. energy and military equipment and zero tariff retaliation by Europe, that’s not negotiation, that’s the art of the deal,” mentioned Prashant Newnaha, senior Asia-Pacific charges strategist at TD Securities. “A big win for the U.S.”

S&P 500 futures rose 0.4% and the Nasdaq futures gained 0.5% whereas the euro firmed throughout the board, rising in opposition to the greenback, sterling and yen. European futures surged practically 1%.

MSCI’s broadest index of Asia-Pacific shares outdoors Japan was up 0.27%, simply shy of the just about four-year high it touched final week. Japan’s Nikkei fell 0.8% after hitting a one-year high final week.

While the baseline 15% tariff will nonetheless be seen by many in Europe as too high, in contrast with Europe’s initial hopes to secure a zero-for-zero tariff deal, it’s higher than the threatened 30% fee.

The U.S.-EU deal gives readability to firms and averts a greater trade conflict between the 2 allies that account for nearly a third of international trade.

“A major tail-risk has now been defused,” mentioned Marc Velan, head of investments at Lucerne Asset Management in Singapore.

“Markets are interpreting this as a sign of stability and predictability returning to trade policy,” he added. “The China delay fits the same pattern: the administration is opting for controlled diplomacy over confrontation.”

China’s blue-chip shares rose 0.3% whereas the Hong Kong’s Hang Seng index superior 0.75%. [.HK]

The Australian greenback, typically seen as a proxy for risk urge for food, was at $0.657, hovering across the close to eight-month peak scaled final week.

FED, BOJ AWAIT

In an action-packed week, traders will watch out for the financial coverage conferences from the Fed and the BOJ in addition to the month-to-month U.S. employment report and earnings from megacap firms Apple, Microsoft and Amazon.