SINGAPORE: Asian stocks softened on Tuesday, although U.S. futures gained after President Donald Trump postponed his proposed 50 per cent tariffs on shipments from the European Union, while the dollar was on track for a fifth consecutive monthly decline. In Japan, yields on ultra-long government bonds decreased early in the session, pulling back from their record peaks following last week's significant bond selloff. U.S. markets were shut on Monday for a holiday, resulting in sparse overnight trading and allowing investors to cling to residual optimism after Trump's reversal on his earlier threat to impose 50 per cent tariffs on EU imports next month, reverting to a July 9 deadline.
Nasdaq futures gained 1.26 per cent in Asia, with S&P 500 futures also increasing by 1.11 per cent. FTSE futures rose by 0.94 per cent. UK markets were closed as well on Monday. "It was a more favourable evening for risk assets, as Trump postponed (EU tariffs) to July 9," stated Tony Sycamore, a market analyst at IG. The primary influence for this week is the month-end rebalancing flows, which are expected to begin shortly... Nvidia's earnings report will once more spotlight the current situation there. Nvidia is set to announce its results on Wednesday, with expectations of a 65.9 per cent increase in revenue for the first quarter. In other regions, MSCI's most comprehensive index of Asia-Pacific stocks excluding Japan decreased by 0.17 per cent, while Japan's Nikkei also declined by 0.15 per cent.
China's CSI300 blue-chip index slipped 0.06 per cent, whereas the Shanghai Composite Index remained relatively stable. Hong Kong’s Hang Seng Index fell by 0.1 per cent. Investors will also concentrate this week on addresses from various Federal Reserve officials and the U.S. core PCE price index on Friday for insights into the future of U.S. interest rates. A two-day yearly conference organised by the Bank of Japan (BOJ) and its associated think tank began on Tuesday, with this year's meeting of international central bankers in Tokyo aimed at addressing sluggish economic growth and persistent inflation. In currencies, the dollar faced difficulties establishing stability and was on track for a fifth consecutive month of losses against a range of currencies, which would signify the longest losing streak since 2017.
The euro remained close to a one-month peak at $1.14035, while the yen increased nearly 0.5 per cent to 142.18 against the dollar. Trump's tumultuous trade policies and worries about the deteriorating U.S. deficit situation have eroded confidence in U.S. assets, which has, in turn, negatively affected the dollar. "A long-term change in the U.S. dollar regime may be on the horizon following its recent peak," stated David Meier, an economist at Julius Baer. "Unpredictable U.S. policy decisions, a strained fiscal environment, and significant external debt amidst the twin deficit indicate that a softer USD is the path of least resistance." As the dollar's safe-haven allure diminishes, investors have turned to alternatives like gold, driving prices to unprecedented heights this year. It most recently traded 0.28 per cent down at $3,332.91 per ounce.
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