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What’s happening: Asian stock markets moved higher this morning as investors assessed the latest US-UK trade deal.
What happened: Japan’s Nikkei 225 continued to rise this morning after having hit a six-week high on Friday amid renewed optimism for the global economy.
Chinese stocks, which settled lower on Friday, recorded gains this morning as the country gears up for talks around tariffs with the US.
Why it matters: Japan’s Nikkei 225 rose 1.56% to settle at 37,503 on Friday, while the Topix Index rose 1.29% to settle at 2,733, with both major indices surging to six-week highs.
The rally followed the announcement of US President Donald Trump having reached a trade agreement with the UK, the first trade deal since sweeping tariffs were levied by the US last month. The UK also agreed to cut its tariffs on US goods from 5.1% to 1.8%, providing a boost to overall market sentiment.
Trump signalled prospects of further trade agreements and possible lowering of tariffs levied China.
Market sentiment for Japanese stocks also received a boost from economic data showing resilient consumer demand. Japan’s household spending grew 2.1% year-over-year in March, following a 0.5% decline in the previous month.
China reported strong data on exports in April. China’s exports rose sharply amid a surge in shipments to Southeast Asian nations, offsetting a decline in goods to the US due to tariffs. Exports jumped 8.1% year-over-year to $315.7 billion in April, easily surpassing market estimates of 1.9%. Shipments to the US dipped more than 21% last month.
China’s trade surplus widened to $96.18 billion in April, from $72.04 billion in the year-ago period. The figure came in above market estimates of $89 billion.
A ceasefire agreement between India and Pakistan also lent support to market sentiment.
The Asia Dow gained 0.40% to 4,258.33 this morning. Japan’s Nikkei 225 rose 0.05% to 37,523.49, Hong Kong’s Hang Seng rose 0.93% to 23,079.88, China’s Shanghai Index added 0.37% to 3,354.53, while India’s Sensex climbed 2.83% to 81,704.88.
What to watch: Investors will continue monitoring ongoing developments in the trade talks between the US and China. Markets will also watch the tensions between India and Pakistan.
Context: The CAD/USD forex pair edged higher this morning as investors digested April jobs data.
Details: Data released on Friday showed Canada’s employment rose by 7,400 in April, compared to a 32,600 decline in the previous month. The figure also topped market estimates of 2,500 job adds.
The growth in jobs was driven by a 31,500 increase in full-time employment, with part-time employment declining by 24,200 last month.
Canada’s unemployment rate rose to 6.9% in April, from 6.7% in the previous month, surging to its highest mark in more than three years.
Strength in the price of crude oil, one of Canada’s major exports, lent support to the loonie on Monday. WTI crude oil prices gained 0.5% to trade at $61.33 a barrel this morning.
However, a higher US dollar weighed on the CAD/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose 0.3% to 100.60 this morning.
The CAD/USD pair rose around 0.1% to 1.3934 this morning.
What to watch: With no major economic data scheduled for release today, investors will watch reports on building permits (1630 UAE Time) and new motor vehicle sales (1630 UAE Time) from Canada on Wednesday. The total value of building permits in Canada, which rose 2.9% to $13.1 billion in February, is expected to rise by 1% in March. Analysts expect new motor vehicle sales in Canada to grow to 129,000 in March, from 125,402 units in February.
Other Markets: European indices closed higher on Friday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 0.27%, 0.63%, 0.64% and 0.44%, respectively.
Ukrainian President Volodymyr Zelenskyy and Russian President Vladimir Putin are scheduled to meet later today to negotiate a full ceasefire deal. The news sent the RUB/USD pair higher in forex trading this morning.
Mexico’s consumer confidence fell to 45.30 in April, from 46 in the previous month, exerting pressure on the MXN/USD forex pair.
Indonesia’s car sales grew by 5.0% in April, compared to a 5.1% decline in March, which sent the IDR/USD pair higher in forex trading this morning.
Saudi Arabia’s industrial production grew by 2.0% year-on-year in March, following a 0.3% rise in the previous month. This being the fastest growth in industrial output since December 2024 lent support to the SAR/USD forex pair.
Brazil’s annual inflation rate accelerated to 5.53% in April, from 5.48% in the previous month. This being the higher inflation rate since February 2023 sent the BRL/USD pair lower in forex trading this morning.
Mexico’s industrial production (1600 UAE Time), France’s 12-month BTF auction (1700 UAE Time), 3-month BTF auction (1700 UAE Time) and 6-month BTF auction (1700 UAE Time), as well as US 3-month bill auction (1930 UAE Time), 6-month bill auction (1930 UAE Time), WASDE report (2000 UAE Time) and monthly budget statement (2200 UAE Time).
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