Asia opens lower in cautious trade

European stock indices were mixed in early trade, mirroring the indecisive tone seen across the Asian Pacific region, with weaker US stock index futures. The UK’s FTSE 100, French CAC and Spanish IBEX were all lower, while the German DAX and Euro Stoxx 50 traded in positive territory. These were helped by an unexpectedly large increase in German Industrial Production for May.

Source: TN Trader

It feels as if many investors were choosing to stay on the sidelines ahead of a data-light Monday, with several major economic and central bank events later this week. Market participants remain focused on the latest developments around trade policy as Trump’s August 1 enforcement looms.

US stock index futures fell modestly in early trade on Monday.

Source: TN Trader

The weakness came after President Trump threatened an additional 10% tariff on countries that align with the “Anti-American policies of BRICS.” Though lacking in specific detail, the announcement coincided with the upcoming BRICS summit in Rio de Janeiro, Brazil - further escalating geopolitical tensions and unsettling markets already weary from extended trade rhetoric.

Adding to the uncertainty, Treasury Secretary Scott Bessent confirmed that tariffs announced in April will indeed be enforced beginning August 1. While he downplayed the idea of this being a “new deadline,” the market took little comfort, interpreting the remarks as an extension of trade risks.

In currency markets, the US dollar continued to recover this morning, pushing up from the multi-year lows hit last week. 

The US dollar has certainly been out of favour for much of the year, thanks to President Trump’s trade war, and as national debt continues to grow, exacerbated by Mr Trump’s ‘tax and spend’ bill, which was signed into law at the end of last week. The Dollar Index traded just below 97.00, having fallen below 96.00 on Tuesday last week.

Commodity-linked currencies like the Australian, New Zealand and Canadian dollars came under fresh pressure. The former two were weighed down by renewed trade anxiety and their respective proximity to China. With the Reserve Bank of Australia (RBA) and Reserve Bank of New Zealand (RBNZ) rate decisions on the radar this week, traders appear hesitant to commit to positions ahead of further clarity.

Gold eased lower on Monday, with the April $3,500 becoming a distant memory. With prices stuck within a relatively narrow band, the market awaits fresh drivers - likely in the form of macro data or tariff headlines - to break the current stalemate.

Source: TN Trader

Silver was also under pressure, falling 1% as it failed to hold above the $37/oz resistance level. Despite a generally bullish undertone in metals through the first half of the year, both precious metals appear to be in a holding pattern for now.

Source: TN Trader

Crude oil started the week little changed. Front-month WTI drifted around the mid-$60s range as supply concerns kept buyers cautious. 

On Sunday, following OPEC+ meetings, the group announced that it would increase output by 548,000 barrels per day. This was well above the 411,000 barrels per day expected, as OPEC continues to unwind earlier production cuts implemented to keep a floor under the oil price.

Source: TN Trader

The decision to increase output by this amount is yet another headwind for the oil price. Particularly given the continuing slowdown in global demand growth.

Some traders are beginning to eye the potential for an active US hurricane season as a possible disruptor to global supply - a wildcard that could offer oil bulls some much-needed upside momentum. But for now, range-bound trade looks likely to persist as the market searches for the next meaningful catalyst.

Natural gas prices tumbled 3% on Monday, extending their decline as warm weather weighs on consumption expectations. Last week’s brief breakout above $4.00/btu proved short-lived, with aggressive selling knocking the contract lower toward the $3.00 level.

The sector remains one of the more volatile corners of the commodity complex, and this latest move underscores how rapidly sentiment can shift in the absence of tight supply or weather-related shocks.

Cryptocurrencies traded modestly higher overnight. Bitcoin once again failed to clear the $110,000 level, reflecting stubborn resistance just above current ranges. Despite a supportive backdrop for risk assets in general, crypto markets are showing signs of fatigue following recent rallies. 

Ether and other majors posted small gains, but overall cryptos remain stuck in their ranges, with little fresh momentum emerging.

This week begins on a relatively quiet note, with few economic data points scheduled. However, things pick up later, with Wednesday’s FOMC minutes expected to offer fresh insight into the Fed’s thinking. The RBA and RBNZ rate decisions will also draw attention later in the week.

The bigger question remains around trade - with President Trump’s new enforcement date of August 1 fast approaching and only a limited number of countries having completed deals.

So, tariffs have returned to the spotlight, with Mr Trump clarifying that enforcement will begin August 1. Despite some countries finalising deals, the vast majority remain exposed, and without a swift resolution, this could start to weigh on sentiment.

Mr Trump’s ongoing feud with Elon Musk also continues to attract attention as the Tesla CEO launches a new political party dubbed “The America Party.” Mr Trump dismissed the move as erratic and attention-seeking.