By Wayne Cole<\/p>\n
SYDNEY (Reuters) -Asia shares slipped on Tuesday while the euro nursed its losses as investors pondered the downside of the U.S.-EU trade deal and the reality that punishing tariffs were here to stay, with unwelcome implications for growth and inflation.<\/p>\n
The initial relief over Europe’s 15% levy quickly soured when set against the 1% to 2% that stood before President Donald Trump took office. Leaders in France and Germany lamented the outcome as a drag on growth, pulling down stocks and bond yields across the continent while slugging the single currency.<\/p>\n
Trump also flagged a “world tariff” rate of 15% to 20% on all trading partners that were not negotiating a deal, among the highest rates since the Great Depression of the 1930s.<\/p>\n
“While the worst case scenario was averted, the implied EU tariff increase from 1% in January is a significant tax increase on EU exports,” wrote economists from JPMorgan in a note.<\/p>\n
“This is a very big shock that unwinds a century of U.S. leadership in global free trade,” they warned. “While we no longer see a U.S. recession as our baseline from this shock, the risk is still elevated at 40%.”<\/p>\n
A further risk to world growth came from a sudden spike in oil prices after Trump threatened a new deadline of 10 or 12 days for Russia to make progress toward ending the war in Ukraine or face tougher sanctions on oil exports. [O\/R]<\/p>\n
The air of caution saw MSCI’s broadest index of Asia-Pacific shares outside Japan slip 0.8%. Japan’s Nikkei lost 0.9%, while Chinese blue chips were flat.<\/p>\n
European shares steadied after Monday’s sell-off. EUROSTOXX 50 futures, FTSE futures and DAX futures all edged up around 0.2%.<\/p>\n
The euro was flat at $1.1587, after falling 1.3% overnight in the largest drop since mid-May. It now has chart support at $1.1556.<\/p>\n
The dollar index was up at 98.675, after the rush out of short dollar positions lifted it 1% overnight, while it eased a one-week high on the yen to stand at 148.27.<\/p>\n
Wall Street held firm on hopes for upbeat results from mega caps this week that include Apple, Meta Platforms, Microsoft and Amazon. [.N]<\/p>\n
S&P 500 futures nudged up 0.1%, while Nasdaq futures added 0.2%.<\/p>\n
Yields on 10-year Treasuries held at 4.408% having crept higher on Monday as markets braced for another steady decision on interest rates from the Federal Reserve.<\/p>\n
Futures imply a 97% chance the Fed will keep rates at 4.25%-4.5% at its meeting on Wednesday and reiterate concerns that tariffs will push inflation higher in the short term.<\/p>\n
Analysts also assume one, or maybe two, Fed officials will dissent in favour of a cut and supporting wagers for a move in September.<\/p>\n
Story Continues <\/p>\n
The odds could change depending on a slew of U.S. data this week including gross domestic product for the second quarter where growth is seen rebounding to an annualised 2.4%, after a 0.5% contraction in the first quarter.<\/p>\n
Figures on job openings are due later on Tuesday that will help refine forecasts for the crucial payrolls report on Friday.<\/p>\n
Canada’s central bank also meets on Wednesday and again is widely expected to hold rates at 2.75% as it waits to see how trade talks with the U.S. wash out.<\/p>\n
In commodity markets, prices for copper and iron ore were under pressure while gold idled at $3,315 an ounce. [GOL\/]<\/p>\n
Brent was off a fraction at $69.90 a barrel, having climbed 2.3% on Monday, while U.S. crude held at $66.60.<\/p>\n
(Editing by Jacqueline Wong and Sam Holmes)<\/p>\n","protected":false},"excerpt":{"rendered":"By Wayne Cole SYDNEY (Reuters) -Asia shares slipped on Tuesday while the euro nursed its losses as investors…\n","protected":false},"author":2,"featured_media":31123,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,1376,46],"class_list":{"0":"post-31122","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-donald-trump","12":"tag-economy"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/31122","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=31122"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/31122\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/31123"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=31122"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=31122"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=31122"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}