By Ray Wee and Johann M. Cherian
Singore -Global Stocks moved forward on Thursday, backed by optimism about artificial intelligence and prospects for future interest rate cuts, but investors looked carefully at US President Donald Trump's ongoing attacks on international trade.
US copper futures expanded its premium to London benchmark overnight after Trump announced plans to impose a 50% tariff on copper imports. He said the taxation will come into effect on August 1st.
Trump also issued tariff notices to seven minor trading partners on Wednesday threatening a 50% punitive tariff on Brazil's exports to the United States.
The latest tariff movements were rare in the rattle market as European stocks acquired it. Germany's DAX increased by 0.1%, while the UK's FTSE 100 rose by 1% to their respective highest highs.
MSCI's most broad index of Asia-Pacific stocks outside of Japan added 0.5%. U.S. stock futures took a breather as Nasdaq futures fell 0.1% after the Tech Heavy Index closed at a high on Wednesday.
Market response to Trump's tariff development this week was less severe than in April. Jeff NG, head of SMBC's Asian macroeconomic strategy, said investors have been somewhat “paralysed” by the ever-changing situation.
“They know there is still room for negotiation, and many of these announcements start with eye-catching numbers, but not entirely final and subject to change.
Meanwhile, investors have lived up to its life by digesting bright quarter results from TSMC, reflecting strong demand for products from the world's largest contracted chip manufacturer, and surge in interest in artificial intelligence applications.
The TSMC report came just after AI chip giant Nvidia became the world's first public company to achieve a market value of $4 trillion. Other tech stocks in Korea and Japan have been further boosted.
It also maintained its equity support for at least two interest rate cuts by the Federal Reserve this year.
Minutes released Wednesday show “most participants” at the Fed's meeting last month that “most participants” are expected to be appropriate later this year, with price shocks from tariffs expected to be “temporary or modest.”
“Our view is that in the balance of risk between employment and inflation, the Fed is more sensitive to employment than inflation. Therefore, if our view is held and there is a weakness in employment over the summer, the Fed will respond by cutting in September.
The dollar was on the back foot against the euro on Thursday, but held its own against the yen at 146.35 after Trump slapped Japan with a 25% tariff earlier this week.
The euro increased 0.17% to $1.1734, while Sterling increased 0.15% to $1.36110.
The exception was the reality in Brazil, when Trump's tariff threats on Latin America's biggest economy, approaching a monthly low of 5.5826.
Real's volatility gauges have skyrocketed at their highest since late April when markets were trying to grasp the threat of Trump's “liberation day” tariffs.
“If there's no clear path yet, reality is likely to continue trading on soft scaffolding in the short term. The initial actual sale was exacerbated by the rewinding of popular carry trades,” said Lee Hardman, senior currency economist at MUFG.
“The risk is that carry trade continues to cause further reversal of actual profits by increasing trade risk and increasing volatility in financial markets.”
In cryptocurrency, Bitcoin was pinned near record highs, lasting at $111,207, while ether rose 1.8% to $2,790.9.
Elsewhere, the crude prices were stable, with Brent futures hovering at $70.2 per barrel, while US crude was flat at $68.33 a barrel. [O/R]
Spot Gold rose 0.22% to $3,320.59 per ounce. [GOL/]
This article was generated from an automated news agency feed without any text changes.
