Stock markets across Asia were steady on Monday, while the euro rallied after U.S. President Donald Trump extended his threat to slap 50 percent tariffs on EU goods. Trump agreed to extend his deadline for trade talks until July 9, from the June 1 deadline he set on Friday, after European Commission President Ursula von der Leyen said the bloc needed more time to “reach a good deal.”
Investor sentiment had recovered after a sharp selloff across most assets last month after Trump paused his sweeping tariffs and announced trade deals with Britain and China.
“Markets are effectively looking past the trade war noise, and the prevailing view is that the worst of the tariff turmoil may now be behind us. Going forward, much will depend on how the negotiations develop beyond the current truces,” said Josh Gilbert, Market Analyst at eToro.
Euro surges on tariff extension
While the agreements with China and the EU are still provisional, they represent a step in the right direction. The willingness of the U.S. administration to engage in dialogue is a positive sign. However, these remain temporary pauses rather than permanent resolutions. Without concrete structural changes to tariff policy, the potential for further escalation remains.
On Monday, MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.04 percent, while futures in Europe and Germany opened higher.
The euro appreciated 0.44 percent to $1.1412, while the currencies of Australia and New Zealand strengthened 0.37 percent and 0.45 percent, respectively. Meanwhile, the dollar index touched its lowest level since April 22, trading 0.34 percent lower at 98.77.
China’s blue-chip index fell 0.7 percent on Monday, while Hong Kong’s Hang Seng Index dipped 1 percent.
Looking ahead, key economic data – including Nvidia’s upcoming earnings report and the latest U.S. Personal Consumption Expenditures (PCE) figures – will be closely watched. These indicators will play a crucial role in determining whether market optimism can be sustained in the coming weeks.
Read: Crude oil prices surge above $64.45 as U.S. extends EU trade talks deadline
European shares down
In the European stock market, the STOXX 600 was last down 0.93 percent to 545.13. The German DAX rallied 1.70 percent, while France’s CAC 40 fell 1.65 percent and the U.K.’s FTSE 100 dipped 0.24 percent to 8,717.97.
On the commodities front, crude prices traded higher, while gold eased from a two-week high. Brent crude futures rose by 37 cents, or 0.6 percent, to $65.15 a barrel by 00:01 GMT, while U.S. West Texas Intermediate crude increased by 34 cents, or 0.6 percent, to $61.87 a barrel.
Meanwhile, spot gold decreased by 0.3 percent, settling at $3,346.59 an ounce as of 03:12 GMT. U.S. gold futures also dropped 0.6 percent to $3,345.70.
Despite the improved sentiment, last week’s unexpected threat of new tariffs on Apple was a stark reminder of the unpredictable nature of trade policy under the Trump administration – a dynamic that has characterized his presidency since day one. As global markets continue to monitor developments in trade policy, future momentum will hinge on the outcome of negotiations and the direction of key economic indicators.
