US stock futures rose in early Asia trading, following indications that the next round of President Donald Trump’s tariffs may be more selective than previously expected.
Stock Futures and Market Sentiment
S&P 500 futures increased, along with Hong Kong equities, while broader Asian shares dipped slightly. The 10-year US Treasury yield also saw an uptick, while the dollar weakened.
Investor sentiment improved as the upcoming round of US tariffs, scheduled for April 2, is expected to be more targeted. This is in contrast to the broader, global tariffs that President Trump had previously suggested. However, concerns remain as officials in China and Australia warned of potential global economic disruptions caused by US trade policy.
“The news of more targeted tariffs has been taken positively during early Asian trading hours, but there is still a lot of nervousness heading into next week’s actual announcement,” said Khoon Goh, head of Asia research at ANZ Group Holdings Ltd. “There could always be unexpected developments, or President Trump could suggest a tougher stance this week. It’s difficult for markets to fully price in the risk at this stage.”
Tariff Announcement Details
President Trump plans to impose broad reciprocal tariffs on various countries or trade blocs, although some may be excluded. The administration does not plan to introduce sector-specific tariffs at the same time, as Trump had previously hinted, according to officials.
Chinese Premier Li Qiang stated that the country is prepared for “shocks that exceed expectations” due to the upcoming tariff announcement. Ahead of Australia’s budget plan, Treasurer Jim Chalmers warned that the impact of the new US policies could have a “seismic” effect on the global economy.
“We expect media leaks and public comments from President Trump to support the US dollar this week,” said Joseph Capurso, a strategist at Commonwealth Bank of Australia. “Market participants may not have fully priced in the negative impact these tariffs could have on the global economy.”
Impact on Other Markets
Elsewhere, the Canadian dollar held steady following news that Prime Minister Mark Carney had called a snap election for April 28, with polls showing a tight race. Carney also introduced measures to mitigate the economic effects of US tariffs, including temporary deferrals of corporate income tax and consumption tax remittances.
Investors are also preparing for potential volatility in Turkish markets after the formal arrest of a key opposition politician. Turkey’s central bank held a “technical meeting” with commercial lenders on Sunday to prepare for increased volatility, and the market regulator imposed a short-selling ban on stocks.
Commodities and Economic Data
In commodities, oil prices remained stable as traders weighed the impact of additional US tariffs and an expected increase in OPEC+ supply. Gold traded near $3,022 an ounce, close to a record high reached on Thursday.
This week, investors will closely monitor economic data from Europe, the UK, and the US for signs of slowing growth due to tariff uncertainty. Inflation data in Australia is expected before the release of US Personal Consumption Expenditure (PCE) data, which is the Federal Reserve’s preferred measure of consumer prices.
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