Trump says Iran war "close to over" amid hopes for more negotiations
Asia Market Wrap - Sentiment Mixed Following US/EU Deal
The record-breaking run in US markets is likely to continue after the EU reached a trade deal with Trump, easing fears of a major trade war.
S&P 500 futures rose 0.4% after the index hit five straight all-time highs last week. European stock futures also jumped 1% following the deal, which includes a 15% tariff on most EU exports. The MSCI All Country World Index hit a new record, though Asian markets stayed flat. Trump and European Commission President Von der Leyen announced the deal on Sunday at Trump’s golf club in Turnberry, Scotland, but didn’t share specific details or any written agreement.
The deal, which was hard to negotiate, will place 15% tariffs on most EU exports, including cars, but avoids a trade war that could have seriously hurt the global economy.
US/EU Trade Deal - Audi Cuts Forecast Following Tariffs
The US and the European Union reached a trade deal on Sunday, setting a 15% import tariff on most EU goods, half of what was originally threatened and avoiding a larger trade war. Together, the US and EU make up nearly a third of global trade.
US President Donald Trump and European Commission President Ursula von der Leyen announced the agreement after a one-hour meeting at Trump’s golf course in Scotland. The deal came after months of tough negotiations. German Chancellor Friedrich Merz praised the agreement, saying it prevented a trade conflict that could have badly hurt Germany’s economy, especially its car industry. German carmakers like VW, Mercedes, and BMW have already been affected by the current 27.5% US tariff on car and parts imports.
While the 15% tariff is lower than the original threat, many in Europe still see it as too high, as they had hoped for a deal with no tariffs at all. Bernd Lange, head of the European Parliament’s trade committee, criticized the tariffs as unfair and warned that Europe’s planned investments in the US could harm the EU’s own economy.
A senior US official said Trump could raise the tariffs in the future if European countries fail to meet their investment promises.
German carmaker Audi, part of Volkswagen (ETR:VOWG_p), lowered its financial forecast for the year on Monday. The company blamed higher US import tariffs and ongoing restructuring costs for the change.
Audi now expects its revenue to be between 65 billion and 70 billion euros ($76 billion to $82 billion), which is lower than its earlier prediction of 67.5 billion to 72.5 billion euros. It also reduced its expected operating profit margin to 5% to 7%, down from the previous range of 7% to 9%.
Audi is still reviewing the effects of the recent trade deal between the US and the EU.
European Open - European Shares Hit Four-Month Highs
European shares hit a four-month high on Monday, driven by gains in pharma and semiconductor stocks. The Stoxx 600 index rose 0.7%, with Germany's DAX up 0.6%, France's CAC 40 gaining 0.8%, and the UK's FTSE 100 edging up 0.1%.
The recent US-EU trade deal, which includes a 15% tariff on most EU goods and a $600 billion EU investment in the U.S., boosted market optimism. The STOXX 600 is now just 1.8% below its all-time high from March, rebounding 19.5% since April.
Pharma stocks like Novo Nordisk (NYSE:NVO) (+0.4%) and Roche (+1.4%) hit monthly highs, while auto stocks, benefiting from reduced tariffs, reached two-month highs. Semiconductor companies ASML (NASDAQ:ASML) (+4.2%), Besi (+5.5%), and ASM International (+3.8%) were top performers.
However, spirits stocks Pernod Ricard (EPA:PERP) (-1.4%) and Anheuser-Busch (-1.3%) fell as the trade deal left tariffs on spirits unresolved. Heineken (AS:HEIN) dropped 4.3%, citing long-term tariff challenges. LVMH rose slightly amid reports of selling its Marc Jacobs brand.
On the FX front, The euro rose slightly to $1.1753, up 0.1% after an earlier 0.3% increase. It also gained 0.2% to 173.64 yen, marking its fifth straight session of growth and reaching a one-year high.
The dollar stayed steady at 147.65 yen, while the dollar index, which measures the US currency against others, remained flat at 97.582.
The British pound held steady at $1.3443. The Australian dollar was at $0.6568, and New Zealand dollar stayed at $0.6014, with little movement.
Currency Power Balance
Source: OANDA Labs
Gold prices remain choppy as mixed price action dominated the Asian session and this has continued into the European open. Gold was trading at $3340/oz at the time of writing.
Oil prices rose slightly on Monday as investors reacted to the U.S.-EU trade deal. However, a stronger US dollar and reduced oil imports by India limited the gains.
Brent crude increased by 30 cents (0.4%) to $68.74 per barrel, while U.S. West Texas Intermediate crude went up by 27 cents (0.4%) to $65.43 per barrel.
Economic Data Releases and Final Thoughts
Looking at the economic calendar, a busy week lies ahead. Monday and Tuesday are abit bare when it comes to high-impact data releases but Wednesday onward the calendar is extremely busy.
We have Central Bank meetings, US and UK earnings as well as a few other data releases and potential trade deal announcements.
Both the Fed and the Bank of Japan are expected to hold rates steady at policy meetings this week, but traders will watch subsequent comments to gauge the timing of the next moves.
Earnings season in the US will see 4 of the magnificent 7 stocks reporting. Apple (NASDAQ:AAPL) is due on Thursday with Meta (NASDAQ:META) due out on Wednesday.
MarketPulse Economic Calendar
Chart of the Day - FTSE 100 Index
From a technical standpoint, the FTSE 100 index gapped higher following the US -EU trade deal over the weekend.
However, since the European open the index has retreated to trade lower than the Friday daily close price at 9151.
The upside does not have any historical data to focus on and thus I will look toward psychological numbers like 9250 and potentially 9500.
Immediate support rests at 9100 before the 9048 and 9000 handles come into focus.
FTSE 100 Daily Chart, July 28. 2025
Source: TradingView.com