Markets Today: Switzerland Hit with 39% Tariff, Global Stocks Slide, FTSE 100 Eyes Support at 100-day MA. NFP Up Next

[Redator]

Asia Market Wrap - Tariffs Bite

Asian shares are on track for their worst week since April after the U.S. imposed heavy tariffs on a number of trading partners.

On Thursday, President Donald Trump signed an order imposing tariffs of 10% to 41% on U.S. imports from other countries. Key rates include 25% on India’s exports, 20% on Taiwan’s, 19% on Thailand’s, and 15% on South Korea’s.

Tariffs on Canadian goods rose to 35% from 25%, except for items under the U.S.-Mexico-Canada trade deal. Mexico was given 90 days to negotiate a broader trade agreement before higher tariffs take effect.

Global markets reacted, with the MSCI All Country World Index dropping 0.1%. Asian stocks fell for the sixth day in a row, and South Korean shares plunged 3.4%.

Japan's Nikkei fell 0.6%, Chinese blue-chip stocks dropped 0.7%, and Hong Kong's Hang Seng index slipped 0.8%.

European Open - European Shares Steady After Tariff Blits

Tariff deadline day has arrived and markets are holding their breath following US President Donald Trump's latest round of tariff announcements.

Tariff rates were set at 35% for Canada, 25% for India, 20% for Taiwan, and 19% for Thailand. Switzerland faced one of the highest rates at 39%.

However, these tariffs are lower than the ones threatened on April 2, which had caused market panic. Big trade deals with Japan and the European Union have been finalized, while talks with China and Mexico are still ongoing. This in part could explain the muted reaction by markets thus far coupled with the much anticipated US jobs data release later in the day.

Source: LSEG

Wall Street and European markets didn’t react much to the tariff news. EUROSTOXX 50 futures dipped 0.3%, while Nasdaq and S&P 500 futures both fell 0.2%. Amazon’s 6% drop, after disappointing earnings, contributed to the decline.

On the FX front, the US dollar rose 0.3% on Friday as Trump’s trade policies became clearer. The dollar index jumped 2.5% this week, reaching a two-month high.

The Swiss franc and Canadian dollar are both set to gain 2.5% this week, marking their best performance since a 3.1% rally in September 2022. However, the Swiss franc slipped 0.26% to 0.8120 per dollar after Trump raised tariffs on Swiss imports to 39%, up from the previously suggested 31%.

The euro stayed near a two-month low at $1.1412, weighed down by what markets see as an unfair trade deal with the U.S. It’s close to Wednesday’s low of $1.1401, the weakest level since June 10.

Currency Power Balance

Source: OANDA Labs

Gold prices remain choppy as they struggle for overall direction. The failure to break back above the $3300/oz level looks ominous.

For a full and comprehensive analysis on GOLD (XAU/USD) read Gold's (XAU/USD) Price Forecast: Mixed Signals Ahead of NFP, A Return Above $3300/oz or Further Downside Ahead?

Oil prices finished yesterday in the red, and this has continued into today. This comes as US Crude Oil production rose to a record 13.49 million barrels-per-day in May, according to data from the EIA.

Economic Data Releases and Final Thoughts

Looking at the economic calendar, a busy day lies ahead.

Euro Area CPI will be out shortly, and comes after Germany reported weaker-than-expected growth of 1.8% yesterday. The headline inflation rate is expected to slow slightly from 2.0% to 1.9%, while the core rate is likely to stay at 2.3%. This may not be enough to change expectations for European Central Bank rate cuts significantly, but it could keep some speculation about potential cuts alive.

A key economic update from the US is expected later today with the release of monthly payroll data. Experts predict that job growth in July slowed to 110,000 new positions. Some believe this is a "just right" outcome, giving the Federal Reserve room to lower interest rates without raising concerns.

For a full breakdown on today's NFP data and its implications, read August Non-Farm Payrolls preview

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Chart of the Day - FTSE 100 Index

From a technical standpoint, the FTSE 100 has not enjoyed its best week.

Tariff concerns and earnings reports have not helped the index capitalize on its recent fresh ath.

The pullback is however approaching a key confluence level which rests at 9048, where the 100-day MA rests as well.

A bounce here would be interesting as the FTSE does appear to be consolidating between the 9048 and fresh all-time highs (ATH) ast 9194.

A break below the confluence level will bring the 9000 handle back into focus and below that the 200-day MA at 8923.

Source: TradingView.com (click to enlarge)

Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

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