US stocks extend gains on US-EU trade deal optimism. Asia Pacific markets show mixed performances. The US dollar recovers while Gold consolidates ahead of the FOMC meeting.
US futures extend gains on US-EU trade deal
In today’s Asia session, the S&P 500 and Nasdaq 100 E-mini futures recorded intraday rallies of 0.5% and 0.6% respectively, extending their gains from last Friday, 25 July’s fresh record closing highs reinforced by US-EU trade deal optimism.
On late Sunday, media reports highlighted that the European Union has finally reached a trade deal with the US after three months of friction and averted a trade war that could have triggered negative repercussions for the global economy
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US President Trump and European Commission President Ursula von der Leyen announced the deal that a 15% tariff rate on EU exports to the US will take effect from 1 August, which includes automobiles, a key EU product, a reduction from the earlier 30% levy threatened by Trump. The full details of the pact have not been released by both sides at this time of writing.
Asia Pacific stock markets have exhibited mixed performances today. Japan’s Nikkei 225 underperformed with an intraday loss -0.9%, its second consecutive session of decline due to domestic political uncertainty, as a local media reported that the Liberal Democratic Party, part of the governing coalition, has gathered enough “signatures” to hold a general meeting in both the lower and upper houses of Japan’s parliament to vote for the ouster of incumbent Prime Minister Ishiba.
US and Chinese officials are set to start the third round of trade negotiations starting from today in Stockholm, where SCMP reported that both sides are likely to extend the tariff pause by another 90 days from the upcoming 12 August deadline.
Hong Kong’s Hang Seng Index managed to reverse last Friday’s loss and rallied by 0.5% while Singapore’s Straits Times Index continued to consolidate with the second consecutive session with an intraday loss of -0.3% after an overextended up move of 11% in five weeks since 23 June 2025 low.
The US dollar has managed to recover earlier intraday losses triggered by the US-EU trade agreement. The euro has erased its earlier gain of 0.2% against the greenback, and it is now trading almost unchanged. The Japanese yen is one of the underperformers due to localised political factors, together with the Swiss franc, as both shed-0.2% and -0.3% respectively against the US dollar.
Gold (XAU/USD) has managed to stage an intraday bounce of 0.1% after three consecutive sessions of losses since last Wednesday, 23 July, as market participants toggle between trade deals optimism and the upcoming FOMC meeting on Wednesday, 30 July, where Fed Chair Powell may start to lean towards the dovish camp and set the stage for the first Fed funds rate in 2025 to come in the next FOMC meeting in September.
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