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GLOBAL-MARKETS-Stocks dip, dollar in doldrums as Trump's deal deadline approaches

The stock market fell on Friday, despite Wall Street's overnight record highs. Next week is the deadline set by U.S. president Donald Trump for a trade deal.

As traders weighed the implications of Trump's expected signing of a sweeping spending bill later that day, the dollar lost some of its gains from Thursday.

The pan-European STOXX 600 Index fell 0.6%. This was mainly due to losses in spirits producers such as Pernod Ricard, Remy Cointreau and others after China announced it would begin imposing duties up to 34.9% for brandy imported from the European Union on July 5.

U.S. S&P futures dipped 0.5% after a 0.8% overnight gain for the cash index, which reached a new all-time high closing. Wall Street will be closed for Independence Day on Friday.

Trump announced that Washington will begin sending letters on Friday to countries specifying the tariff rates they will be facing on exports into the United States. This is a significant shift from his earlier promises to reach scores of individual agreements before a deadline on July 9, when tariffs may rise dramatically.

Tony Sycamore is an analyst with IG. He said that investors are "just waiting for July 9" and the lack of optimism in the market for trade agreements has contributed to some of the weakness of equity markets, especially those export-dependent Asia, such as Japan and South Korea.

Sycamore stated that the jobs data on Thursday showed "the U.S. Economy is holding up better than most people anticipated, which suggests that markets could easily continue to perform better from here."

Investors reacted positively to the surprising robustness of the jobs report, which sent all three major U.S. equity indices higher in a short session.

The House approved Trump's 869-page signature bill after the vote ended. According to the nonpartisan Congressional Budget Office, this would add $3.4 trillion dollars to the $36.2 trillion national debt.

TRADE IS THE KEY OBJECTIVE IN ASIA

Trump announced that he expects "a couple" of more trade deals after signing a deal on Wednesday with Vietnam to add to the framework agreements with China, and Britain which are so far his only achievements.

Scott Bessent, the U.S. Treasury secretary, said this week that an agreement with India was close. The White House had once said that agreements with Japan and South Korea would be announced as soon as possible. However, it appears they have fallen through.

The U.S. Dollar rose overnight by as much as 0.7% against a basket major counterparts after traders backed off any expectation of a Federal Reserve rate cut in this month. The dollar ended the day Thursday up 0.4%. The U.S. dollar gave up some of its gains on Friday. It fell 0.4% to 144.31 Japanese yen, and 0.2% to 0.7936 Swiss Franc.

The euro rose 0.2% to $1.1773, and the sterling remained at $1.3662.

The U.S. Treasury Bond market is closed for the weekend, but the 10-year yields increased 4.7 basis points to 4.34% and the 2-year yields jumped 9.3 basis points to 3.882%. Gold rose 0.4% to $3339 an ounce. This is on track to be a weekly increase as investors once again sought safe haven assets because of concerns about the U.S. fiscal situation and tariffs. Brent crude futures dropped 7 cents to $68,73 per barrel while U.S. West Texas Intermediate oil was last seen at $67.02. (Reporting from London by Lawrence White and Kevin Buckland; Editing by Stephen Coates Kim Coghill Alexandra Hudson

(source: Reuters)