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Asian stocks, euro gain after Trump delays EU tariffs

Asian stocks, euro gain after Trump delays EU tariffs

Stock markets in Asia rose on Monday. The euro also rallied, after President Donald Trump extended his threat of imposing 50% tariffs on EU products by over a month, signaling another temporary respite as part his erratic policy on trade.

Trump extended his trade deadline from Friday's June 1 to July 9 after European Commission President Ursula von der Leyen stated that the EU needed more time to reach a "good deal".

The market sentiment was stable after a sharp drop in most assets during the month of November. Trump had paused his tariffs that were affecting growth and investors wanted to make new trade agreements after an agreement with UK and temporary agreement with China.

Analysts have pointed out that investors are moving their money from the U.S. into Europe and Asia, as they factor in a potential U.S. economic recession and subsequent global slowdown.

"(The tariffs) are well above the original reciprocal 20% tariff on the EU." This escalation is bad news for the world as it affects 60% of the global GDP.

Apple was also caught up in the crossfire of trade on Friday after Trump threatened to levy a 25% tax on all iPhones imported by U.S. customers.

The broadest MSCI index of Asia-Pacific stocks outside Japan rose 0.12% on Monday. Japan's Nikkei also edged up.

Due to the fact that the United States and United Kingdom markets are closed on Monday due to public holidays, trading volumes are expected to be low.

Nippon Steel, a Japanese company, jumped by 4.3% on Friday after Trump expressed his support for its $14.9 billion offer to acquire U.S. Steel. He said that their "planned partnership", would create jobs and benefit the American economy. U.S. Steel shares soared by 21% on the Friday.

Investors will try to gauge Bank of Japan's outlook for monetary policy by focusing on super-long Japanese bonds. Inflation data is expected later this week. Last week, yields on tenors reached record levels.

The ballooning debt levels of developed economies have also been brought to the forefront following Moody's downgrading of the United States' credit rating and the weak auctions for debt in the U.S.A. and Japan held last week.

Hong Kong's Hang Seng Index fell 0.4% in the early morning trading of Monday while China's blue chip index dropped 0.2%.

The euro gained 0.3%, reaching its highest level since April 30. Meanwhile, the dollar recovered up to 0.3%, to 143.085 Japanese yen after a 1% drop on Friday.

Nvidia, the leader in artificial intelligence (AI), will release its earnings report on Wednesday. It is the last member of the "Magnificent 7" group of growth shares that led the U.S. bull run of more than two years.

Analysts believe that the quarterly report of the semiconductor giant could be the catalyst for the markets as its forecasts can be seen as a sign of demand for technology infrastructure.

Nvidia shares have fallen more than 2% in this year as investors have taken note of cheaper Chinese AI models following the release of DeepSeek. CEO Jensen Huang also warned that U.S. Export curbs would affect sales.

Reports on Saturday indicated that Nvidia would launch a new AI chipet in China for a lower price. This is subject to U.S. approval.

Gold prices dipped from their two-week high, but crude oil prices rose.

(source: Reuters)