London (AFP) – Major stock markets slipped but without panic on Monday as investors digested US President Donald Trump’s latest tariffs threat to hit the EU and Mexico with 30-percent levies. Analysts said investors viewed that as yet another negotiating ploy against America’s trading partners rather than a genuine warning — though uncertainty swirled, further weakening the dollar. US and European indices slid, though London’s FTSE climbed. Asian markets closed lower.
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, said 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, though stung by Trump’s unexpected raising of the stakes amid trade negotiations, is holding off — for now — on prepared trade retaliation. “This suggests that the EU is willing to retaliate in a measured way,” said XTB’s Brooks, adding: “There is still time for a negotiated solution.” EU trade chief Maros Sefcovic said on Monday, however, that the bloc could target 72 billion euros’ ($84 billion) worth of US imports if talks fail.
With Trump’s threat being discounted, bandwidth was being given to other news. Bitcoin struck a record-high above $123,000, fuelled by a possible regulatory loosening in the United States for crypto assets that is being debated. Attention was also focused on a “major statement” on Russia that Trump has teased ahead of hosting a visit to the White House by NATO chief Mark Rutte. Oil traders were eyeing a possible US sanctions crackdown on Russian oil exports, with crude prices initially jumping then falling back. 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.
– 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. That rebuffed a call from France for strong EU 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.
– Key figures at around 1345 GMT –
New York – Dow: DOWN 0.1 percent at 44,351.19 points
New York – S&P 500: DOWN 0.3 percent at 6,242.64
New York – Nasdaq Composite: DOWN 0.4 percent at 20,511.43
London – FTSE 100: UP 0.4 percent at 8,980.25
Paris – CAC 40: DOWN 0.5 percent at 7,787.77
Frankfurt – DAX: DOWN 0.9 percent at 24,044.56
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 $1.1685 from $1.1690
Pound/dollar: DOWN at $1.3479 from $1.3497
Dollar/yen: DOWN at 147.34 yen from 147.38 yen
Euro/pound: UP at 86.67 pence from 86.59 pence
Brent North Sea Crude: UP 0.1 percent at $70.43 per barrel
West Texas Intermediate: DOWN 0.1 percent at $68.41 per barrel
© 2024 AFP
