Asian stocks fell for the third consecutive day as the momentum from recent trade deals waned and investors remained cautious amid a week brimming with economic data and corporate earnings reports.
The MSCI Asia-Pacific Index dropped 0.8%, with the Hong Kong stock market leading the decline. The US dollar steadied on Tuesday after posting its biggest gain since May in the previous trading session. US President Donald Trump urged Russia and Ukraine to quickly reach a ceasefire agreement, warning that they could face economic sanctions otherwise. Oil prices held onto gains. US Treasury yields rose, with the 10-year yield down 1 basis point to 4.4%.
The optimism brought by the recent tariff agreement is fading, and investors are turning their attention to a series of key indicators – from employment and inflation to broader economic activity. The focus will be on the Federal Reserve’s policy decision on Wednesday, when officials are expected to keep interest rates unchanged. Four major technology companies’ earnings reports will also be released afterwards.
European governments have defended the trade deal reached with Trump, while German industry officials have warned that it poses risks to the automotive sector and will undermine the competitiveness of European businesses. The Dutch minister of foreign trade said the deal was “not ideal” and called on the European Commission to continue negotiations with the United States.
European stocks fell on Monday. The euro was little changed on Tuesday after posting its biggest drop in more than two months in the previous trading session.
Meanwhile, US and Chinese officials concluded the first day of two-day talks aimed at extending the tariff truce beyond the August 15 deadline and exploring ways to maintain trade relations while safeguarding economic security.
The key to the market this week lies in the Federal Reserve’s interest rate decision. The Bank of Japan will also hold a meeting to discuss its policy decisions.
Federal Reserve Chair Jerome Powell and his colleagues will enter the central bank’s boardroom on Tuesday to start a two-day meeting to discuss interest rates against the backdrop of intense political pressure, shifting trade policies and economic headwinds.
Unusually, policymakers will meet in the same week that the government releases reports on gross domestic product (GDP), employment and the price gauge favored by the Federal Reserve. Forecasters expect a flood of data to show a rebound in economic activity in the second quarter.
In other parts of Asia, Trump said that after the two countries agreed to stop the disputed border fighting, he has asked US officials to resume trade talks with Cambodia and Thailand.
In Japan, Prime Minister Ishiba Shigeru is fighting to remain in power and insists he will stay on despite growing calls for his resignation from some ruling party lawmakers after last week’s historic election defeat.
Technical analysis:
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Gold: The previous decline in gold prices was mainly due to the tariff agreement reached between the United States, Japan, and the European Union. However, this week, market focus will shift to fundamental factors such as the Federal Reserve meeting and non-farm payroll data. We suggest maintaining long positions with low liquidity as the main strategy. Meanwhile, if there is an upward breakthrough and the 3325/30 area is recaptured, one can consider a bullish signal for the day. For detailed positions, please consult the plugin.
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Nasdaq: We continue to focus on buying after the price sweeps through low liquidity. We are reluctant to buy directly at high levels. We think the dense area of liquidity sweeps within the day may occur around 23,260 – 23,300. Please keep an eye on it. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: After experiencing a pullback to around 66, the price has returned to the 67.50-68 range for consolidation. We will keep an eye on the signal of upward momentum breaking through within the day. If it appears during the process of breaking through 68, 1-2 attempts can be made. 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:
22:00 U.S. June JOLTs Job Openings (in 10,000s)
22:00 July Conference Board Consumer Confidence Index
