Asian stock markets fluctuated between small gains and losses as President Donald Trump imposed new tariffs on several countries while leaving the door open for further trade negotiations.
The MSCI regional index fluctuated narrowly as stocks in South Korea and Japan rose despite the imposition of new tariffs on the two countries. Shares of Toyota Motor Corp. and other Japanese automakers rose 0.5% as the yen remained weak. The South Korean won strengthened while the dollar index fell 0.1%. The euro rose on reports that the United States was willing to reach a 10% tariff deal with the European Union.
After announcing higher tariffs on several countries, Trump said Monday night that he was still willing to engage in further negotiations and pushed back the tariff increase to at least August 1. The president also hinted at the possibility of further talks and a delay in imposing the tariffs, saying the notices were “not 100% certain.”
These remarks eased market concerns that several Asian countries would be subject to radical tariffs soon and that their export prospects to the US might be damaged. Despite a fall on Monday due to tariff concerns, the stock market is still hovering near its historical high. The stock market has rebounded from the sharp drop in April when the full-scale tariff increase was first announced, as the market expected the tariff deadline to be extended and Trump’s modus operandi is to threaten first and then make concessions.
Frederic Neumann, chief Asia economist at HSBC, said: “Investors are not paying attention to the latest tariff announcements but seeing them as a negotiating tactic to speed up talks rather than a final decision on the tariffs taking effect.”
On Monday, Trump sent out the first of a series of tariff warning letters, just two days before the April 2 deadline for reaching agreements with countries facing so-called reciprocal tariffs. The new rates include: 25% tariffs on goods from Japan, South Korea and Malaysia; 32% tariffs on Indonesia; 35% tariffs on Bangladesh; 36% tariffs on Thailand and Cambodia; and 40% tariffs on Laos and Myanmar.
Few countries have been able to successfully reach an agreement in such a short period of time. During this period, Trump announced framework agreements with the UK and Vietnam, and a trade truce with China.
One notable positive development in the latest trade progress is that higher tariffs will not be imposed in July. Ian Lyngen and Vail Hartman of BMO Capital Markets said this means the 90-day tariff suspension period, which was due to expire on Wednesday, will be “indirectly extended”.
They pointed out: “If the latest trade war does not provide an additional relief window, the outcome of the economic outlook will surely be more severe.”
Informed Indian officials said that India has put forward the best proposal on trade issues, and the fate of the interim agreement now lies in Trump’s hands. Negotiators have conveyed to Washington the bottom lines they are unwilling to cross when reaching a final agreement, including allowing the United States to export genetically modified crops to India and opening up India’s dairy and automotive industries to the United States.
Technical analysis:
Gold: Yesterday, our plugin provided a positive low-buy strategy. The green buy limit operation near 3300 performed perfectly, yielding a profit-to-loss ratio of 3 times in one trade. Today, we will continue to monitor the demand zone near 3320. If there is an opportunity, we can consider attempting a long signal again. For detailed positions, please consult the plugin.
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V: Hana-fgfg and note “666” in the message.
Nasdaq: We reminded in yesterday’s article that after the liquidity was cleared near 22,600, it was time to go long at a lower price. Meanwhile, the plugin also gave a yellow alert for this area. Currently, the price has indeed moved in the same direction as we expected. For today, it’s important to prioritize protecting profits and continue holding the long positions taken after the liquidity was cleared at a lower level. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg and note “666” in the message.
Crude oil: We clearly reminded yesterday that although there was news of OPEC increasing production, if there is a signal of momentum to break through, we should still try. Our plugin also reminded of the blue area, the opportunity to buy after the price breaks through and retraces. We suggest reducing positions and pushing for protection within the day. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V: Hana-fgfg and note “666” in the message.
Key economic data and events to focus on today:
12:30 Reserve Bank of Australia Cash Rate
14:00 Germany May seasonally adjusted trade balance
18:00 US June NFIB Small Business Confidence Index
22:00 Speech by German ECB Governing Council member Nagel
