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US planes and cars, as well as drinks, are on the EU's list of potential tariffs
The European Commission is proposing to impose tariffs if trade talks with Washington fail to produce an agreement. This is the second package put forward by European Commission which oversees the trade policy of the 27 nation European Union. The package is intended to counter U.S. car and auto parts tariffs and a 10% baseline tariff. The U.S. president Donald Trump is now threatening to impose a 30% baseline tariff on EU imports starting August 1. European officials claim that this level is unacceptable, and it would stop normal trade between the two largest markets in the world. The list was sent to EU members and seen on Tuesday. It covers U.S. imports of goods worth $84.1 billion. The list also includes agricultural and food products, including a variety of fruits and vegetables as well as wine, beer, and spirits, worth a combined total of 6.35bn euros. The first package of 21 billion Euros worth of U.S. goods approved in April was immediately suspended for the purpose to negotiate. This suspension has now been extended until August 6. EU officials stated on Monday they are still trying to reach a deal in order to avoid Trump’s tariffs. However, EU Trade Chief Maros SEFCIOC said that member states have agreed to countermeasures should talks with the U.S. fall through. In May, the Commission first presented the second package for public consultation. The proposal at the time concerned 95 billion euros worth of goods from the United States. The proposal has been reduced, but the majority of its main elements have not changed. The EU has not set a date to approve this package. Reporting by Philip Blenkinsop, Editing by Joe Bavier.
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Positive economic data and improved Australia-Ties help Iron Ore recover from its early losses
The price of iron ore futures rebounded Tuesday after a series of positive economic reports and the strengthening of ties between Australia, the world's largest producer and China, its top consumer, outweighed the persistent weakness in China’s property market. The September contract for iron ore on China's Dalian Commodity Exchange traded 0.13% higher, at 767 Yuan ($106.91). As of 0726 GMT, the benchmark August iron ore traded on Singapore Exchange was down by 0.84% to $98.75 per ton. China's Q2 Gross Domestic Product (GDP) grew by 5.2% compared with the same period last year. Meanwhile, June industrial production grew 6.8%, exceeding analyst expectations despite U.S. Tariffs. In a Tuesday meeting, Chinese President Xi Jinping vowed to expand the free trade and deepen cooperation between his country and Australia's Prime Minister Anthony Albanese. Albanese travelled to China with executives of mining giants Rio Tinto BHP, and Fortescue who met Chinese officials in the steel industry on Monday. In a recent note, analysts at ANZ stated that "strong steel production, healthy margins and low inventories of steel appear to have encouraged mills to restock their raw materials." ANZ said that the gains are limited, however, by the concern that authorities will continue reducing steel capacity. Market sentiment remained tempered despite the positive data on growth. In June, China's new-home prices experienced their biggest monthly drop in eight months. This reflects the continued weakness in the real estate sector. China's crude output of steel in June was down 3.9% on the previous month and 9.2% on an annual basis as steelmakers maintained equipment. In addition to the high temperatures in northern Europe and the heavy rains in eastern and southern Europe, outdoor construction was limited, which reduced the demand for steel. Coking coal and coke, which are used to make steel, also fell on the DCE. They were down by 0.38% and 0.85%, respectively. The Shanghai Futures Exchange saw a general decline in steel benchmarks. The rebar fell by 0.54%. Hot-rolled coils dropped 0.31%. Wire rods declined 2.13%. Stainless steels gained 0.08%. ($1 = 7.1745 Chinese yuan). (Reporting and editing by Rashmi Liew)
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Stocks rise ahead of important US earnings and data as trade talks loom
On Tuesday, shares rose worldwide and the dollar gained as investors entered a week that will be crucial for US earnings data, inflation figures and trade negotiations in a fairly optimistic mood. Oil prices fell after U.S. president Donald Trump set a deadline of 50 days for Russia to stop the war in Ukraine or face energy sanctions. Trump indicated he would be open to discussing tariffs following his threat at the weekend to impose 30% duty on Europe and Mexico starting August 1. Japan is trying to set up high-level discussions with the U.S. on Friday. The market has reacted well to the uncertainty surrounding tariffs, which makes this week's earnings in the United States all the more significant for clues. The MSCI broadest Asia-Pacific index outside Japan rose by 0.8%. Europe's STOXX benchmark increased by 0.2%. Nasdaq Futures also gained after Nvidia announced it would resume its sales of H20 chips in China. The EU warned that if a deal is not reached, it will take countermeasures. Trump said that he would be open to discussions with the EU and trading partners. The Yomiuri reported that Japan's Shigeru Shiba will meet U.S. Treasury Sec. Scott Bessent on Friday in Tokyo, before the August 1 deadline for 25% tariffs to go into effect. Ishiba will also have to deal with an election on Sunday. Polls show that his ruling coalition could lose its majority in the upper chamber to political opponents advocating expansive spending. The yield on the benchmark 10-year bond, which is the highest since October 2008, jumped to 1,595%. The data showed that China's economy shrank less than expected during the second quarter, despite U.S. Tariffs. Nvidia's CEO Jensen Huang will visit the country this Wednesday. His company is now planning to resume the sale of its H20 artificial-intelligence chips on the market. U.S. EARNINGS IN CENTER The U.S. earnings period will begin Tuesday with the release of major bank's second-quarter results. According to LSEG, S&P profits will rise 5.8% over the past year. The outlook for the S&P 500 has changed dramatically since Trump's trade war began in early April, when he predicted a 10.2% increase. Analysts said that Trump's repeated verbal attacks against Federal Reserve Chair Jerome Powell over the past few weeks reminded markets of the chaos his sometimes abrupt decisions can cause. Investors will also be watching for the U.S. consumer prices data for June due Tuesday and any price increases that may result from tariffs. After reaching a three-week peak, the dollar was barely changed at 147.62yen. After four days of declines, the euro rose 0.1% to $1.1680. U.S. crude fell 0.6% to $66.56 per barrel. Trump announced on Monday new weapons shipments to Ukraine and threatened sanctions against buyers of Russian exports until Moscow agreed to a peaceful deal within 50 days. Spot silver rose 0.3% to 38.25 dollars per ounce after reaching its highest level since September 2011.
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Saudi Arabia's annual inflation rate accelerated to 2.3% in July
The government reported on Tuesday that the inflation rate in Saudi Arabia increased to 2.3% from 2.2% last month. Since the start of this year, inflation has been mainly driven up by increases in housing rents. In June of last year, it was 1.5%. The General Authority for Statistics reported that the increase in rents for housing was due to a 7.1% rise in villa prices. The housing sector was responsible for the majority of the price increases in the category combined housing, water and electricity, gas, and other fuels. Last month, the Saudi government announced measures to balance Riyadh’s real estate market. This included setting aside some plots with price caps for Saudi citizens. Saudi Arabia recently approved a Real Estate Ownership and Investment Law that will make it easier for foreigners to purchase property when the law comes into effect next year. Saudi Arabia has begun building several new massive developments around Riyadh, as part of the Vision 2030 program to diversify the economy and move away from oil. It also aims to boost both the tourism industry and private sector. The city's real-estate projects must be completed in a timely manner to ensure that the new law will balance supply and demand. The International Monetary Fund (IMF) expects Saudi Arabia's inflation to stay at around 2%. This is supported by the Saudi riyal peg to U.S. dollars, domestic subsidies, and "an elastic supply" of expatriate workers.
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Copper prices fluctuate when China GDP exceeds forecasts and markets focus on US data
The London Metal Exchange (LME) and Shanghai Futures Exchange (SFE) saw only small fluctuations in copper prices on Tuesday as China's economic growth exceeded forecasts. Meanwhile, traders were awaiting U.S. inflation figures and possible monetary policy changes. As of 0700 GMT the LME's three-month copper contract was up by 0.31% to $9,648.5 per ton. The most traded copper contract on SHFE, however, fell 0.26% to $78,090 ($10,884.84). China's GDP increased by 5.2% in April-June. This is slightly less than the 5.4% growth rate of the first quarter. The first-half GDP growth for 2025 will be 5.3%. According to China's National Bureau of Statistics, fixed asset investment grew 2.8% on an annual basis. The metals market won't react much as long as China's first-half GDP growth is over 5%. For the remainder of 2025, and the longer-term, it will be more about how Beijing deals with the overcapacity and fierce competition in many industrial sectors. The dollar was near its three-week peak against other major currencies as traders awaited U.S. Inflation data to get clues about monetary policy, and a possible departure by Federal Reserve Chair Jerome Powell in the wake of continued criticism from U.S. president Donald Trump. SHFE tin dropped 1.12%, to 263,240 Yuan per ton. This was primarily due to market speculation about the reissue of tin mine licenses in Wa State in Myanmar on Tuesday. Wa State suspended work in the local mines to protect its resources. A Shanghai-based tin dealer said that the price of SHFE tin has lowered in response to the increased supply expected in the next few months. LME lead dropped 0.72% to $1988.5 per ton. Zinc fell 0.6% to $2713.5. Tin eased 0.55% at $33,350. Nickel declined 0.36% at $15,010. Aluminium traded flat, $2,592.5. SHFE Nickel fell by 1.15% per ton to 119.380 yuan. Lead eased by 0.76% to 16,930 yuan. Zinc dropped 0.54% at 22,085 ton. Aluminium was unchanged at 20,430 ton. Click or to see the latest news in metals, and other related stories.
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Simon Trott, former iron ore CEO at Rio Tinto, has been named CEO
Rio Tinto named Simon Trott as its new CEO on Tuesday. He replaces Jakob Stausholm who announced in May his intention to step aside. Trott will assume the role of Group CEO on August 25, 2018. Stausholm was appointed CEO of the miner in 2020, after the company faced legal, investor and public backlash over the destruction Australia's ancient Juukan gorge rock shelters. This led to the removal of the former CEO. Trott, who has been with Rio for 20 years, is bringing its largest new iron ore mining in Western Australia in over a decade to market and building out an enormous programme of replacement tons in the state. From 2018 to 2021, he was also the chief commercial officer of Rio Tinto. Investors have criticized Trott because of the decline in the quality of Rio's ore exports during his tenure, and the miner's failure to meet its highest production forecast. Reporting by Sameer and Shivangi in Bengaluru; Clara Denina in Melbourne, Melanie Burton in Melbourne. Editing by Sonia Cheema.
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Asian shares are up, the dollar is holding gains ahead of US earnings and Nasdaq Futures are up
The dollar gained on Tuesday, as the trade talks were still in the spotlight. This week will also see important readings for U.S. bank earnings and inflation. Oil prices fell after U.S. president Donald Trump set a deadline of 50 days for Russia to stop the war in Ukraine or face energy sanctions. Nasdaq Futures rose after Nvidia NVDA.O announced it would resume sales of H20 chips in China. Trump indicated he would be open to discussing tariffs following his threat at the weekend to impose 30% duty on Europe and Mexico starting August 1. Japan is trying to set up high-level discussions with the U.S. on Friday. Rodrigo Catril, a strategist at National Australia Bank, says that the market has reacted rather benignly to the uncertainty surrounding tariffs. This makes earnings this week in the United States all the more significant for clues. Catril, who spoke in a NAB Podcast, said that it would be interesting to hear what the companies have to say, especially in regards to the future-looking outlook. He added, "I believe that the idea of complacency comes from the fact that we don't know how this entire thing will play out." The Nikkei index in Japan added 0.2%, while the MSCI broadest Asia-Pacific share index outside Japan increased by 0.4%. The EU warned that if a deal is not reached, it will take countermeasures. Trump said that he would be open to discussions with the EU and trading partners. The Yomiuri reported that Japan's Shigeru Shiba will meet U.S. Treasury Sec. Scott Bessent on Friday in Tokyo, before the August 1 deadline for 25% tariffs to go into effect. Ishiba will also have to deal with an election on Sunday. Polls show that his ruling coalition could lose its majority in the upper chamber to political opponents advocating expansive spending. The yield on the benchmark 10-year bond, which is the highest since October 2008, jumped to 1,595%. Data revealed that China's economy shrank less than expected during the second quarter, a sign of its resilience in the face of U.S. Tariffs. Nvidia's CEO Jensen Huang will visit China on Wednesday. His company plans to resume the sale of its H20 artificial-intelligence chips. The U.S. earnings period will begin Tuesday with the release of major bank's second-quarter results. According to LSEG, S&P profits will rise 5.8% over the past year. The outlook for the S&P 500 has changed dramatically since Trump's trade war began in early April, when he predicted a 10.2% increase. Investors will also be watching for the U.S. consumer prices data for June due Tuesday and any price increases that may result from tariffs. After reaching a three-week peak, the dollar was barely changed at 147.62yen. After four days of declines, the euro gained 0.1% at $1.1680. U.S. crude fell 0.5% to $66.63 per barrel. Trump announced on Monday new weapons shipments to Ukraine and threatened sanctions against buyers of Russian exports until Moscow agreed to a 50-day peace agreement. Spot silver rose 0.3% to 38.25 cents per ounce after reaching its highest level since September 2011. Euro Stoxx futures in the pan-region were up by 0.3%. German DAX Futures were also up by 0.2%. FTSE Futures were also up 0.2%. U.S. Nasdaq Futures rose 0.5%.
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The G20 in Durban will be shadowed by BRICS tensions and the absence of BRICS
The G20 Finance Chiefs' meeting in Durban this week is likely to be overshadowed by Donald Trump's tariffs, Scott Bessent's no-show, and the rising tensions between Washington, South Africa, and BRICS. Bessent was among the key officials who skipped Cape Town's February gathering of finance and central bank ministers in the grouping. This raised questions about their ability to address pressing global challenges. Josh Lipsky is the chair of International Economics at the Atlantic Council. He said, "It's problematic that the world's biggest economy is not represented, at least on a high political level." Lipsky said that Bessent’s absence presaged U.S. plans to slim down the G20 and go "back-to-basics" when the U.S. assumes the rotating presidency of the grouping next year. Trump has implemented a 10% baseline tariff on all U.S. Imports. Punitive rates are targeted at specific countries and products, including steel and aluminium at 50%, automobiles at 25% and levies up to 200% for pharmaceuticals. On August 1, additional tariffs will be imposed on 25 countries. The threat of imposing additional tariffs on BRICS nations is complicated by the fact that eight G20 countries, including South Africa as host country, are part of the expanded BRICS grouping. This overlap suggests the rise of rival forums, as Western-led organizations face credibility issues. Fundi Tshazibana, Deputy governor of the South African Reserve Bank, said that "policy uncertainty" is the current biggest issue. The G20 was born out of past firefighting crises and took off when countries all over the world realized that they needed to coordinate their policies in order to recover from the global financial crash at the end of the 2000s. Brad Setser, of the Council on Foreign Relations, said that the G20 was built on the assumption that all major economies in the world shared a similar interest in a relatively stable and open global economy. "But Trump isn't interested in stability, and wants to close the global economy." 'DIFFICULT SPACE' The Durban meeting of finance chiefs that will take place on Thursday and Friday is also taking place against the backdrop of increasing economic pressures, especially for African economies. Goldman Sachs estimates that Sub-Saharan Africa’s external debt is now $800 billion or 45% GDP. Traditional funding sources have also dried up. After years of rapid expansion, Chinese lending has slowed down to a trickle. This leaves an $80 billion funding gap. Trevor Manuel, former Finance Minister of South Africa and leader of the Africa Expert Panel at the G20, said: "Their views are that if they negotiate before they take the loan, then they will accept it." "But after the loan has been made, they expect to receive a return. This is embedded in their laws." "This is a very important issue," he said. China's Belt and Road Initiative brought significant resources to Africa, but there are also offsets. I think part of the drive going forward will be greater transparency. This means that certain barter arrangements, etc. need to treated quite differently. As Washington cuts foreign aid, and European capitals redirect money to defence, U.S. grants and European grants that account for 25% of external funding in the region will be cut. Lumkile Montdi, a political commentator from the University of Witwatersrand, said that "Africa is in an extremely difficult situation." The continent's investment will decline due to high levels of debt and low GDP growth. This makes it less relevant for the current geoeconomics. Pretoria assumed the G20 Presidency in December, under the slogan "Solidarity. Equality. Sustainability". It had hoped that it would use this platform to put pressure on rich countries to finance climate change and to address the mistrust between the North and South of the world. In reality, Pretoria is now dealing with the fallout of aid cuts and tariffs wars which directly undermine these goals. South Africa, as the continent's largest economy, is under pressure to promote African interests and navigate great power rivalries. National Treasury stated that it is "premature" to comment on the specific goals of the meeting. Duncan Pieterse, Director General of Treasury, said in a Monday statement that the South African G20 Presidency hoped to release the first Communique at the conclusion of the meetings. The G20 financial stability watchdog released a new climate risk plan on Monday, but put policy work on hold amid a U.S. retreat which has slowed down efforts to develop a united financial strategy on climate-related threats. The U.S. withdrew from several groups that were exploring the impact of climate policy changes and flooding, wildfires, and other factors on financial stability.
JGB yields soar as Asian shares surge, the dollar strengthens before US earnings
The dollar gained on Tuesday, as the trade talks were still in the spotlight. This week will also see important readings for U.S. bank earnings and inflation.
Oil prices fell after U.S. president Donald Trump set a deadline of 50 days for Russia to stop the war in Ukraine or face energy sanctions. As a crucial upper house election approached, Japanese government bond yields reached a multi-decade peak.
Trump indicated he would be open to discussing tariffs following his threat at the weekend to impose 30% duty on Europe and Mexico starting August 1. Japan is trying to set up high-level discussions with the U.S. on Friday.
Rodrigo Catril, a strategist at National Australia Bank, says that the market has reacted rather positively to the uncertainty surrounding tariffs. This makes earnings this week in the United States all the more significant as cues.
Catril, in a NAB Podcast, said that it would be interesting to hear what the companies have to say, especially in regards to the future-looking outlook.
He added, "I believe that the idea of complacency comes from the fact that we don't know how this entire thing will play out."
MSCI's broadest Asia-Pacific share index outside Japan rose 0.4% after U.S. shares ended the previous session with modest gains. Japan's Nikkei gauge added 0.2%.
The EU warned that if a deal is not reached, it will take countermeasures. Trump said that he would be open to more discussions with the EU, and other trading partners.
The Yomiuri reported that Japan's Shigeru Shiba will meet U.S. Treasury Sec. Scott Bessent on Friday in Tokyo, before the August 1 deadline for 25% tariffs to go into effect.
Ishiba will also have to deal with an election on Sunday. Polls show that his ruling coalition could lose its majority in the upper chamber to political opponents advocating expansive spending.
The benchmark yield on 10-year JGBs jumped to 1,595%, the highest since October 2008. Meanwhile, the 30-year yield reached a record high of 3,195%.
The U.S. earnings period will begin Tuesday with the release of major bank's second-quarter results. According to LSEG, S&P profits will rise 5.8% over the past year. The outlook for the S&P 500 has changed dramatically since Trump's trade war began in early April, when he predicted a 10.2% increase.
Investors will also be watching for the U.S. consumer prices data for June due Tuesday and any price increases that may result from tariffs.
After reaching a new three-week high, the dollar was barely changed at 147.71yen. The euro was unchanged at $1.1672.
U.S. crude fell 0.3% to $66,80 per barrel. Trump announced on Monday new weapons shipments to Ukraine and threatened sanctions against buyers of Russian exports until Moscow agreed to a 50-day peace agreement.
Spot silver rose 0.1% to 38.15 dollars per ounce after reaching its highest level since the previous session.
Early trades showed that the Euro Stoxx futures for all regions were up by 0.1%. The German DAX was also up by 0.1% and FTSE Futures were also up by 0.2%. U.S. Stock Futures, S&P500 e-minis were down by 0.1%.
(source: Reuters)