From Rae Wee
SINGAPORE (Reuters) – Asian shares rose on Tuesday, following a positive lead from Wall Street and as some investors hoped U.S. President-elect Donald Trump might adopt a less aggressive tariff stance than promised when he takes office.
The Washington Post reported Monday that Trump aides are exploring tariff plans that would apply to all countries but cover only certain sectors deemed critical to national or economic security, a significant departure from promises Trump made during the presidential campaign. 2024. .
While the news initially sent stocks higher and the dollar lower, Trump’s subsequent denial on his Truth Social platform reversed some of the declines in the US currency.
“No one really knows for sure what kind of tariffs or trade policies the Trump administration will implement,” said Khoon Goh, head of Asia research at ANZ.
“It’s still possible that what the Washington Post reported is true. His officials and associates will of course go through it and come up with various options, but ultimately it’s up to Trump to decide.
“For now, he’s still talking tough about tariffs. But we know from experience in his first term that he’s a person who’s open to doing deals. I think that’s partly why the markets aren’t reacting too negatively at this stage.”
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.16% in the early Asian session, while it jumped 2%, boosted by gains in technology shares.
The dollar, meanwhile, hovered near a one-week low of 108.36, nursing some of its losses from the previous session.
The euro and pound pared some of their sharp overnight gains after the Washington Post report, each falling 0.1% to $1.0377 and $1.25085, respectively.
In China, the index reversed early losses to last trade 0.12% higher, while falling 0.09%.
Hong Kong fell 0.43 percent.
China’s major bourses have asked some big mutual funds to limit share sales at the start of the year, three sources familiar with the matter said, as authorities try to calm markets entering a difficult period for the world’s second-largest economy.
DATA PRINT
Inflation data from the eurozone later on Tuesday will improve the European Central Bank’s prospects for further rate cuts. Markets are currently pricing in just under 100 basis points worth of easing in 2025.
It’s been a busy week with various economic data releases, especially from the United States, which will be headlined by the December nonfarm payrolls report on Friday.
This will be shown by data on ADP hiring, job openings and weekly jobless claims.
Anything more optimistic would bolster the case for smaller rate cuts by the Federal Reserve, and markets have already cut expectations to just 40 basis points for 2025.
Minutes from the Fed’s latest meeting scheduled for Wednesday will offer color to their predictions, while there will be plenty of live commentary with several leading politicians speaking.
The prospect of a less aggressive Fed easing cycle this year in turn kept U.S. Treasury yields up, with the benchmark 10-year yield at 4.6219%, after rising to their highest level since May in the previous session.
The two-year yield settled at 4.2704%.
Elsewhere, the dollar hit a new six-month high against the Japanese yen at 158.425.
The Canadian dollar was last trading slightly weaker at 1.4345 to the US dollar, after rising on Monday after Canadian Prime Minister Justin Trudeau said he would step down in the coming months.
“If Canada were to head for a snap election that would produce a Conservative-led government, the CAD could appreciate that,” said Thierry Wizman, global rates and rates strategist at Macquarie.
“This is based on the view that certain outcomes are likely to improve for Canada under a Conservative-led government, and even in anticipation of a Conservative-led government.”
In terms of commodities, oil prices fell 0.37% to $76.02 a barrel on Tuesday, while they fell 0.46% to $73.22 a barrel. [O/R]
rose 0.18% to $2,640.49 an ounce. [GOL/]
