Asian stocks edged lower on Monday, pressured by losses in Wall Street futures and renewed tariff threats from US President Donald Trump. While investor sentiment remained cautious, hopes that Trump’s latest warning may be more rhetoric than reality helped limit the market fallout. Over the weekend, Trump announced plans to impose a 30% tariff on most imports from the European Union and Mexico starting August 1, despite ongoing negotiations.Meanwhile, investors appeared unfazed by Trump’s unpredictable approach, with stocks slipping only slightly and the dollar making a minor gain against the euro. “It is hard to say whether the muted market response is best characterised by resilience or complacency,” Taylor Nugent, a senior markets economist at NAB told Reuters.“But it is difficult to price the array of headlines purportedly defining where tariffs will sit from August when negotiations are ongoing,” Nugent added. Currently, MSCI’s broadest index of Asia-Pacific shares outside Japan remained steady, while Japan’s Nikkei declined 0.5%.S&P 500 and Nasdaq futures both decreased 0.4%. The earnings season commences this week, with major banks reporting on Tuesday.S&P companies are anticipated to show profit growth of 5.8% compared to the previous year, reduced from earlier projections of 10.2% growth on April 1, according to LSEG IBES.The euro slipped 0.2% to $1.1665 following renewed US tariff threats, retreating from its recent four-year high of $1.1830. The US dollar rose 0.1% against the yen to 147.53 and saw similar gains on its currency index, reaching 98.008. The dollar strengthened 0.3% against the Mexican peso to 18.6900, with Mexican President Claudia Sheinbaum expressing optimism about reaching a trade agreement before the August deadline.In commodities, gold gained 0.3% to $3,366 an ounce, supported by safe-haven demand.Oil prices inched higher on Monday amid speculation that Trump may announce tougher sanctions on Russia, potentially targeting major buyers of Russian oil. Brent crude rose 0.1% to $70.45 a barrel, while US crude edged up to $68.50.In the bond market, US Treasuries saw only a slight uptick in safe-haven demand, with 10-year yields steady at 4.41%. Futures tied to the Federal Reserve’s policy rate inched higher, as investors slightly increased bets on interest rate cuts next year. While Fed Chair Jerome Powell has maintained a cautious stance on easing rates, Trump is ramping up political pressure for more aggressive stimulus. Over the weekend, White House economic adviser Kevin Hassett claimed Trump could have grounds to remove Powell over cost overruns in the Fed’s Washington HQ renovations.Trump on Sunday said it would be “a great thing” if Powell stepped down.
