(Bloomberg) – Asian stocks have fallen as the ongoing change in the US president’s approach to tariffs on Donald Trump’s trading partners blew market uncertainty and confidence in the economic outlook.
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Stocks in Australia and Japan each fell over 1.5%, while the Chinese stock gauges in Hong Kong reached their highest level since November 2021. The fifth session saw the index of the dollar, the longest defeat of a year, fell. Bitcoin fell as details of the US strategic reserve were overwhelmed.
Traders pointed to uncertainty about Trump’s tariffs. US stocks have failed to stage the rebound, even after Trump’s decision to delay taxation on Mexican and Canadian goods covered by the North American trade agreement. This week, financial markets are whipping up as investors dealt with conflicting US signals about geopolitical uncertainty and taxation.
“Confusion reigns around the Trump administration’s policy agenda,” said Chris Weston, Pepperstone Group’s Head of Research. “There are few signs of panic, but funds and fast money accounts reduce stock risk.”
Wall Street strategists have debated whether the stock decline will affect the Trump administration on tariff plans. The idea is that if the stock market he promotes as a report card drops investors and is rattling, Trump will abandon his policy. Various companies mapped how well Trump could survive before retreating on the S&P 500 index. That index level is now known as a “tramp put” by referring to the put option.
So far, Trump has barely shown that he will change course. The president downplayed the response to the latest developments, saying, “I’m not looking at the market.” That follows his comments to Congress earlier this week, and the collection “caused a bit of obstruction, but that’s fine. That’s not that much.”
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On Thursday, Trump delayed taxation on goods covered by the North American trade agreement until April 2nd. Comments from Treasury Secretary Scott Bescent then confirmed that tariffs would come. Bessent rejected the idea that tariff hikes will spark a new wave of inflation, suggesting that the Federal Reserve should consider them to have a one-off effect.
European stocks have moved almost 10% this year, as German plans to increase interest rate cuts and defence spending will increase the market. Meanwhile, the gauge of Chinese stocks listed in Hong Kong has soared almost 23% this year on the country’s artificial intelligence recruitment drive and optimism over the expected stimulus package from Beijing.
Bitcoin fell after details of US cryptocurrency reserves emerged and showed the government would use digital assets that were confiscated as part of a criminal or civil lawsuit.
US equity index futures rose on Friday after reassuring investors that spending on artificial intelligence computing remains ongoing, bringing stocks up about 13% in aftermarket trading, with bright earnings forecasts from US Chipmaker Broadcom Inc..
The after-hours rally spread to the tech companies that hit hardest on Thursday. Nvidia Corp. and Marvell Technology Inc. rushed into the main session and rose after closing the bell as the outlook disappointed investors.
After Thursday’s mute session, the Treasury was slightly higher on Friday. The Mexican peso and Canadian dollar rose on news of potential tariff deferrals. Yields in Australia and New Zealand fell early on Friday.
In Asia, China’s central government has ample fiscal policy tools and space to address potential domestic and external challenges, Finance Minister Lan Foun said Thursday about bystanders at the annual legislative meeting. The People’s Bank of China will implement moderately loose monetary policy, Governor Pan Gongsheng said.
China’s exports have reached records so far as they have accelerated cargo front loads as US tariffs have risen and more threats have come.
Future US non-farm payroll data on Friday may help identify paths beyond interest rates as they tackle the impact of rocky geopolitics, the impact of tariffs on global growth and inflation outlook.
Friday’s report from the Bureau of Labor Statistics will update Fed officials on the momentum of the labour market, a major support for household spending and the economy through at least January.
Federal Reserve Chairman Jerome Powell will speak at the Monetary Policy Forum Friday afternoon. The next one is expected to meet between March 18-19 to stabilize interest rates as policymakers meet and measure trends in labor markets and inflation, as well as recent changes in government policy.
Meanwhile, Fed reserve governor Christopher Waller said in March he would not support a cut in interest rates, but said there was room for two or perhaps three times this year.
“If the labor market, everything seems to be held, you’re just keeping an eye on inflation,” Waller told the Wall Street Journal CFO Network Summit on Thursday. “If you think you’re back to your target, you can start a rate reduction. I won’t say it in the next meeting, but I’ve certainly seen it in the future.”
In the commodity, oil was on track for its biggest weekly decline since October, but when traders sought shelter, gold was on track for profit.
Important Events of the Week:
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Eurozone GDP, Friday
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US Employment Report, Friday
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Federal Reserve Chair Jerome Powell will give a keynote speech at an event in New York hosted by the University of Chicago Booth School of Business on Friday
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Fed’s John Williams, Michelle Bowman and Adriana Kugler speak on Friday
Some of the main market movements:
stock
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S&P 500 futures rose 0.3% until 1:19pm
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Japanese topics fell 1.5%
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Australia’s S&P/ASX 200 fell 1.8%
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Hong Kong’s Hangsen rose 0.6%
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The Shanghai composites remained almost unchanged.
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Euro Stoxx 50 futures fell 0.7%
currency
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The Bloomberg Dollar Spot Index has been largely unchanged
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The euro rose 0.2% to $1.0808
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The Japanese yen rose 0.3% per dollar to 147.57
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Offshore yuan was 7.2443 per dollar and barely changed
Cryptocurrency
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Bitcoin fell 2.9% to $87,240.54
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Ether fell 2.8% to $2,150.98
Bonds
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Treasury yields fell to 4.25% from 3 basis points in 2010
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Japan’s 10-year yield was 1.510%, but little changed
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Australia’s 10-year yield fell to 4.40% from 8 basis points
merchandise
This story was created with the support of Bloomberg Automation.
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