New US tariffs and sticky US inflation weigh on markets. The US dollar rallies while Asian stock markets sell off. The yen and Swiss Franc weaken on central bank cues and tariff threats.
Intraday risk-off in global equities triggered by a firmer US dollar
The US stock market ended the last trading day of July on a whimper. On Thursday, 31 July, the S&P 500 and Nasdaq 100 shed -0.4% and -0.6%, respectively, after an intraday rally of around 1% to hit fresh all-time highs, thanks to positive earnings beats from two mega-cap technology stocks, Microsoft and Meta Platforms.
The lack of intraday positive momentum follow-through in the US stock market observed on Thursday can be attributed to a stubbornly elevated inflation trend in the US, which may prevent the Fed from cutting interest rates at the upcoming FOMC meeting in September. The core PCE inflation data for July came in at 2.8% year-over-year (y/y), the same rate as in June, and slightly above expectations of 2.7%.
In today’s Asian session, the S&P 500 and Nasdaq 100 E-mini futures extended their intraday losses to -0.2% due to mixed after-hours share price performances of Apple (+2.4%) and Amazon (+6.6%), ex-post Q2 earnings results release.
US tariffs fears and uncertainties also caused prior sessions of risk-on behaviour to take a backseat as the 1 August extended deadline comes into force. In today’s early Asian session, US President Trump unveiled a slew of new international trade tariffs.
The US White House announced a 10% global minimum tariff, with rates of 15% and higher for countries with significant trade surpluses with the US. The hardest hit were Canada (35%), Switzerland (39%), Taiwan (20%), India (25%), and South Africa (30%).
The US dollar rose for six consecutive sessions on the backdrop of tariff fears and a “sticky” US PCE print. The US dollar Index added a gain of 0.2% on Thursday and ended July with a positive performance of 3.4%, the greenback’s first monthly gain since the start of 2025.
The Japanese yen fell to a four-month low against the US dollar as the USD/JPY broke above a key medium-term resistance at 149.60. The earlier gains of the yen seen during yesterday’s Asian session, induced by a higher inflation forecast for FY 2025 from the latest Bank of Japan (BoJ) quarterly outlook report, were wiped out after BoJ Governor Ueda’s dovish press conference that tempered near-term rate hike expectations.
The Swiss franc is the weakest major currency in today’s Asia session, where it shed -0.2% against the US dollar after Trump’s higher levies of 39% on Swiss products that may prompt the Swiss central bank (SNB) to adopt an even more dovish monetary policy stance after it cut its policy interest rate to zero in June.
Asia Pacific stock markets rattled to the downside in today’s session, reinforced by a firmer US dollar. Japan’s Nikkei 225 fell by -0.6%, Hong Kong’s Hang Seng Index inched lower by -0.5%, and Singapore’s Straits Times Index recorded an intraday loss of -0.3%, on track for a sixth consecutive session of negative returns.
Our YouTube video above contains the latest intraday technical analysis on the latest intraday technical analysis on US Wall Street 30, US Nas 100, US SPX 500, Hong Kong 33, Japan 225, Germany 30, EUR/USD, GBP/USD, AUD/USD, USD/JPY, Gold (XAU/USD), and West Texas Oil.
