London (AFP) – Major stock markets largely shrugged on Monday at US President Donald Trump’s latest tariffs threat to hit the EU and Mexico with 30-percent levies. Analysts said investors viewed the warning as yet another negotiating ploy against America’s trading partners rather than a genuine move — though lingering uncertainty weighed on oil prices. US shares initially dipped on Trump’s threat, but then rose as traders digested the likelihood of it being implemented. European indices finished largely down, but with no sign of panic selling. London’s FTSE climbed. Many Asian markets closed lower, but not Shanghai and Hong Kong.
Markets believe the latest threat of 30-percent tariffs on the EU, the United States’ biggest trading partner, was “Trump-style brinkmanship — sound and fury meant to shake down concessions before the August 1 deadline” when they are due to be applied, explained Stephen Innes, managing partner at SPI Asset Management. “Financial markets are acting like the 30-percent rate is a mere tactic from Donald Trump, rather than a reality,” agreed Kathleen Brooks, research director at XTB. Yet some, including Kim Heuacker, an associate consultant at Camarco, noted “there remains the genuine risk that, to save face, he (Trump) may activate the high tariffs”.
The European Union, stung by Trump’s unexpected raising of the stakes amid trade negotiations, is looking at targeting 72 billion euros’ ($84 billion) worth of US imports if talks with Washington fail, its trade chief, Commissioner Maros Sefcovic, said. With Trump’s threat being discounted, bandwidth was given to other news. Bitcoin struck a record high above $123,000, fuelled by possible regulatory changes for crypto assets in the United States that is being debated. Attention was also focused on Trump on Monday vowing “very severe tariffs” on Russia’s trade partners if Moscow did not resolve its war in Ukraine within 50 days. Oil traders initially saw those sanctions constricting supply, and they pushed crude prices higher — before selling off under the cloud of a possible broader trade war that would depress global demand. Upcoming data on Tuesday on US inflation was also in focus, with expectations that the rate would rise a little. If it comes in higher than predicted, it would support warnings that Trump’s tariffs are inflationary for Americans.
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Talks disarray – Trump’s threat to slap 30-percent tariffs on the European Union, issued Saturday, threw into disarray months of painstaking talks Brussels had been conducting with Washington. European Commission chief Ursula von der Leyen has insisted the bloc still wants to reach an accord and on Sunday delayed EU retaliation. Some EU countries, notably France, are calling for strong countermeasures, after China responded robustly with its own tariffs and ended up reaching a deal with the United States. Since that accord, trade tensions have eased between the United States and China, with official data on Monday showing Chinese exports jumped more than expected in June. That included a 32-percent surge in shipments to the United States, after a drop in May.
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Key figures at around 1545 GMT –
New York – Dow: FLAT at 44,401.59 points
New York – S&P 500: FLAT at 6,262.06
New York – Nasdaq Composite: UP 0.1 percent at 20,618.14
London – FTSE 100: UP 0.6 percent at 8,998.06
Paris – CAC 40: DOWN 0.3 percent at 7,808.17
Frankfurt – DAX: DOWN 0.4 percent at 24,160.64
Tokyo – Nikkei 225: DOWN 0.3 percent at 39,459.62 (close)
Hong Kong – Hang Seng Index: UP 0.3 percent at 24,203.32 (close)
Shanghai – Composite: UP 0.3 percent at 3,519.65 (close)
Euro/dollar: UP at $1.1693 from $1.1690
Pound/dollar: DOWN at $1.3454 from $1.3497
Dollar/yen: UP at 147.47 yen from 147.38 yen
Euro/pound: UP at 86.91 pence from 86.59 pence
Brent North Sea Crude: DOWN 1.1 percent at $69.59 per barrel
West Texas Intermediate: DOWN 1.4 percent at $67.49 per barrel
© 2024 AFP
