Stocks surge, euro steady after US-EU trade – Business News
Global shares rose and the euro appreciated 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 US 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 comparable trade deal with Japan.
Countries are scrambling to finalise trade offers forward of an August 1 deadline set by US President Donald Trump, with talks between the US and China set for Monday in Stockholm amid expectations of one other 90-day extension to the truce between the world’s prime two economies.
President Donald Trump (R) shakes palms with European Commission President Ursula von der Leyen (L) following their assembly, in Turnberry, south west Scotland on July 27, 2025. AFP through Getty Images
“A 15% tariff on European goods, forced purchases of US energy and military equipment and zero tariff retaliation by Europe, that’s not negotiation, that’s the art of the deal,” stated Prashant Newnaha, senior Asia-Pacific charges strategist at TD Securities. “A big win for the US.”
European futures surged more than 1%, whereas S&P 500 futures rose 0.5% and Nasdaq futures superior 0.6%.
The euro strengthened throughout the board, rising in opposition to the greenback, sterling and yen.
“We have to be a bit cautious from here,” stated Sim Moh Siong, currency strategist at Bank of Singapore, of the broader risk-on rally. “A lot of good news is already in the price.”
MSCI’s broadest index of Asia-Pacific shares outdoors Japan was up 0.32%, simply shy of the just about four-year high it touched final week. Japan’s Nikkei fell 1% 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.
Currency merchants work close to a screen exhibiting the Korea Composite Stock Price Index (KOSPI) and the international exchange fee between US greenback and South Korean received, proper, on the international exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Monday, July 28, 2025. AP
The US-EU deal gives readability to corporations and averts a greater trade battle between the 2 allies that account for nearly a third of international trade.
“A major tail-risk has now been defused,” stated 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.”
The US 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 comparable trade deal with Japan. AP
Gains for China’s blue-chip shares petered out in direction of the noon break, whereas Hong Kong’s Hang Seng index gained 0.5%.
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 US employment report and earnings from megacap corporations Apple, Microsoft and Amazon.
While the Fed and the BOJ are anticipated to take care of charges, feedback from the officers will likely be essential for traders to gauge the rate of interest path. The trade deal with Japan has opened the door for the BOJ to raise charges again this yr.
Meanwhile, the Fed is more likely to be cautious on any fee cuts as officers search more knowledge to find out tariffs’ impression on inflation earlier than they ease charges additional.
But tensions between the White House and the central bank over financial coverage have elevated, with Trump repeatedly lashing out at Fed Chair Jerome Powell for not chopping charges. Two of the Fed Board’s Trump appointees have articulated causes for supporting a fee cut this month.
In commodities, oil costs rose after the US-EU trade settlement. Brent crude futures and US West Texas Intermediate crude each rose 0.5%.
Gold costs fell on Monday to their lowest in almost two weeks on lowered urge for food for protected havens.
