Daijiworld Media Network- Singapore
Singapore, Jun 30: Asian equity markets kicked off the week on a firm footing, buoyed by renewed optimism in US-Canada trade negotiations and steady global demand in the technology sector. However, investor caution lingered ahead of crucial US employment data due later this week.
Japan’s Nikkei 225 emerged as the region’s top performer with a 1.6% jump, riding on gains in technology and export-driven stocks. South Korea’s Kospi index followed suit with a 0.8% rise, reflecting positive momentum from Wall Street.
In China, market performance remained mixed. The blue-chip CSI300 index edged up by 0.2%, aided by better-than-expected June data in manufacturing and services. However, broader market sentiment was cautious, with the MSCI Asia-Pacific (excluding Japan) slipping 0.2%.
The uptick in Asian stocks came on the heels of a key breakthrough in US-Canada trade talks, with Canada agreeing to drop its proposed digital services tax to ease tensions and pave the way for continued negotiations. Talks, which were expected to conclude by July 9, have now been extended to July 21, with a final agreement potentially in sight by Labor Day (September 1).
This progress marked a reversal from last week, when former President Donald Trump suspended discussions, raising concerns of renewed trade friction.
Tech shares continued to anchor global equity momentum, with Nasdaq futures up 0.4% and S&P 500 e-minis gaining 0.3%. Market giants such as Nvidia, Alphabet, and Amazon remained in sharp focus, especially as expectations of softer macroeconomic data fuel hopes of a looser monetary policy stance.
Despite the bullish sentiment, market watchers are awaiting the release of the US non-farm payroll data, which has been advanced to earlier this week due to the July 4th holiday. Forecasts suggest around 110,000 new jobs in June, with unemployment likely rising to 4.3%. A weaker labour print could amplify calls for Federal Reserve rate cuts, with markets already pricing in a cumulative 63 basis points reduction later this year.
The uncertainty around the Senate vote on tax and spending reforms, combined with the Congressional Budget Office’s warning of a $3.3 trillion spike in national debt, has also weighed on global sentiment and dampened demand for US Treasuries.
The US dollar slipped to 97.146 on the dollar index, marking its sharpest sustained decline since 1973, as noted by Capital Economics analyst James Reilly. The euro climbed to $1.1727, reaching a high not seen since September 2021, while the pound sterling hovered near multi-year highs at $1.3722.
Meanwhile, gold traded at $3,279 an ounce, slightly below its April peak, and oil prices softened further. Brent crude stood at $67.50, while US crude dropped to $65.09, amid concerns over OPEC+ production levels and weakening global demand signals.
As the week unfolds, market movements are expected to remain data-sensitive, with macroeconomic signals from the US likely to shape investor sentiment across global markets.