Asian equities inched upward on Thursday, buoyed by improved risk appetite but tempered by a cautious global sentiment ahead of the European Central Bank’s (ECB) policy announcement. The MSCI Asia-Pacific Index outside Japan rose 0.4%, reflecting optimism in markets like South Korea and Hong Kong, while Japan’s Nikkei slipped 0.5%, pressured by domestic concerns and currency strength. The modest gains come despite escalating trade tensions and a weakened U.S. economic outlook following President Donald Trump’s tariff hikes on steel and aluminum, which have drawn sharp global reactions.
Highlights:
MSCI Asia-Pacific Index ex-Japan gains 0.4%.
Japan’s Nikkei drops 0.5%; Hang Seng up 0.5%.
KOSPI surges 0.9% to 11-month high on post-election optimism.
Cautious mood ahead of ECB policy signal.
Dollar Remains Under Pressure as Weak US Data and Trade Turmoil Raise Concerns
The U.S. dollar remained subdued, having lost ground following weak employment and services data, which cast doubt on the strength of the American economy. The dollar index edged up 0.1% to 98.879, trimming earlier losses but still vulnerable amid expectations of dovish monetary guidance from the ECB. The euro held steady at $1.1411, while the dollar rose 0.2% to 143 yen. Market participants are closely watching the ECB for clarity on its rate trajectory, particularly as President Christine Lagarde is expected to offer forward guidance amid rising uncertainty over global growth and U.S. trade strategy.
Highlights:
Dollar index at 98.879, recovering slightly.
Euro flat at $1.1411 after 0.4% prior gain.
Dollar up 0.2% to 143 yen.
ECB rate cut expected; focus on Lagarde’s forward guidance.
Tariff Escalations and Political Visits Add to Market Anxiety
President Trump’s move to double steel and aluminum tariffs to 50% took effect on Wednesday, impacting key partners including Canada and Mexico, and raising fears of retaliatory trade measures. Canada signaled potential reprisals, while the European Union reported progress in its talks with Washington. Meanwhile, diplomatic and trade activities are ramping up—Japan is dispatching negotiator Ryosei Akazawa to the U.S., and Germany’s new chancellor Friedrich Merz is also heading to Washington for discussions, underlining the urgency and geopolitical weight of ongoing trade realignments.
Highlights:
Trump’s 50% metal tariffs now active; Canada mulls retaliation.
EU reports trade progress with U.S.; Japan and Germany dispatch officials.
July deadline looms for further U.S. import levies.
Commodities Trade Soft Amid Inventory Concerns and Price Adjustments
In commodities, gold prices slipped 0.2% to $3,367.30 per ounce, retreating slightly from previous gains as investors adopted a wait-and-watch stance. Oil prices also declined, with U.S. crude falling 0.5% to $62.58 per barrel after data showed a buildup in U.S. inventories and Saudi Arabia announced price cuts for Asian buyers of its July crude, indicating potential oversupply concerns in the region. The softening in energy prices added to broader market caution despite equity resilience.
Highlights:
Spot gold down 0.2% at $3,367.30/oz.
U.S. crude slips 0.5% to $62.58/bbl.
Saudi cuts Asian crude prices; U.S. inventory build adds pressure.
Global Futures Steady Amid Awaited ECB and Jobs Data
Equity futures across Europe and the U.S. remained mostly unchanged as traders awaited key employment data from the U.S. on Friday and ECB’s forward policy signals. Pan-European Euro Stoxx 50 futures and U.S. S&P 500 e-minis showed minimal movement in Tokyo trading hours, reflecting a cautious but stable stance as central bank and trade headlines dominate the week’s narrative.
Highlights:
Euro Stoxx 50 and S&P 500 e-mini futures flat.
Traders await U.S. jobs data and ECB’s rate commentary.
Global equity markets watchful amid trade and policy flux.
