(Bloomberg) — Asian markets are set for a shaky open after President Donald Trump pledged tariffs on all imports of steel and aluminum, on top of his plan for other measures later this week. Commodity currencies dropped in early trading while Asian stocks are primed for losses.
Most Read from Bloomberg
The Australian, New Zealand and Canadian dollars as well as the euro fell after Trump’s comments, while equity futures in Australia, Japan and Hong Kong are all pointing down. Contracts in mainland China and a gauge of US-listed Chinese shares rose on Friday as Trump said he would maintain the duty-free exception for low-value packages from China until systems are in place to collect the tariff revenue.
Trump said the 25% levy on steel and aluminum will be announced Monday and apply to imports from all countries, though he didn’t specify when they would take effect. His latest comments add to already jittery markets in anticipation of Trump unveiling fresh measures on “everyone” and Federal Reserve Chair Jerome Powell’s upcoming semiannual congressional testimony.
“Markets continue to react to Trump policy shifts rather than economic data,” Bob Savage, head of markets strategy and insights at BNY wrote in a note to clients. “The take from Fed Chair Powell will be critical in judging the costs of tariffs and other policy shifts on easing plans.”
The S&P 500 index slumped 1% on Friday amid the heightened tariff angst and after data showed a slide in consumer sentiment amid concern over inflation. The dollar climbed while US Treasuries fell across the curve after jobs figures highlighted a moderating — yet healthy — labor market.
Nonfarm payrolls increased by 143,000 last month after upward revisions to the prior two months. The unemployment fell to 4.0% from 4.1% while hourly wages climbed 0.5%.
Powell will be making his semi-annual testimony at a time when officials are signaling they’re not in a hurry to further ease policy. Inflation data later this week may help buttress those arguments and underpin market pricing for just one US rate cut this year.
In Asia, Chinese shares will be closely watched Monday as the country’s growing clout in artificial intelligence space has sparked a wave of optimism toward the nation’s tech companies. The rally could be threatened as temporary spending boom around the Lunar New Year holiday, which caused consumer inflation to accelerate in January for the first time since August, masked deflationary pressures in China’s economy.
