Asian Stocks Reach Monthly Highs
(Bloomberg) — Asian stocks climbed to a one-month peak due to anticipations that President Donald Trump may alleviate the effects of auto tariffs, fostering optimism for reduced trade tensions.
Market Reactions
A regional index increased by 0.3% following a White House announcement that imported vehicles would be exempt from certain tariffs on aluminum and steel. South Korean automaker Hyundai Motor Co. led the gains. The dollar index rose by 0.2%, while gold prices fell by up to 1.1%. No trading occurred in cash Treasuries in Asia as Tokyo was closed for a public holiday.
US Stocks and Earnings Reports
Futures for the S&P 500 rose by 0.1%, alleviating some earlier gains in the Asian session. European stock contracts remained mostly unchanged amid numerous earnings reports from companies like Deutsche Bank, HSBC Holdings, and Lufthansa.
US Economic Data Impact
The five-day rally in US equities, the longest streak since November, is set for a crucial test this week with an influx of data on jobs, inflation, and economic growth, alongside earnings from major tech firms. Financial markets have gained some stability over the past week after previous volatility stemming from trade policy changes.
Investors’ Cautious Approach
“It’s important to be cautious about portfolio positioning right now,” said Ken Wong, an equity portfolio specialist at Eastspring Investments, in an interview with Bloomberg TV. “Contradictory news regarding tariffs has forced us to adopt a more cautious, wait-and-see strategy.”
Canadian Elections and Tariff Developments
In Canada, the Liberal Party is likely to secure a fourth consecutive election victory, empowering former central banker Mark Carney. Speculation of a narrow victory has caused the Canadian dollar to weaken against the US dollar. Meanwhile, US Treasury Secretary Scott Bessent has indicated that China is currently sidelined as the US seeks trade deals with other nations.
China’s Response to Tariffs
China has responded strongly, with the People’s Daily reiterating calls for the US to cease its unjust tariff impositions. Foreign Minister Wang Yi stated that silence and retreat would allow aggressors to push further. The Ministry of Commerce emphasized the negative impact of US tariffs on global air transport, noting the adverse effects on both Chinese airlines and Boeing.
