Asia shares rose on Friday and global markets attempted a rebound after a brutal selloff earlier in the week, while gold reached a record as the latest escalation of global trade tensions left nervous investors seeking safe-haven assets. Relief over the likely aversion of a US government shutdown boosted stocks in Asian trade, after Senate Democrat Chuck Schumer said he would vote to advance a Republican stopgap funding bill, signalling that his party would provide the necessary support. US stock futures rose sharply in response, with Nasdaq futures up more than 1% at one point and S&P 500 futures advancing 0.6%.
EUROSTOXX 50 futures similarly gained 0.5% and FTSE futures gained 0.3%. DAX futures climbed 0.6%. “For today, at least, this news from Congress is positive for market sentiment at this point,” said Alvin Tan, head of Asia FX strategy at RBC Capital Markets. MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.95% higher, though it was on track to lose 1.5% for the week, as global trade disputes battered global stocks.
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In the latest in a long list of tariff threats, US President Donald Trump said on Thursday he would hit imports of European wine and spirits with duties of 200% if the EU did not remove retaliatory surcharges on American whiskey and other products that come into effect next month. “Trump is making it very clear that if anyone were to retaliate, his counter-escalation is going to be even sharper,” said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho. The latest developments sparked Thursday’s steep selloff on Wall Street and the confirmation that the S&P 500 was in a correction, just a week after the Nasdaq confirmed the same.
“I think Trump 2.0 is nothing like Trump 1.0. This time, the president seems prepared to let U.S. markets and the economy suffer while he implements his ‘America first’ goals,” said Michael Strobaek, global chief investment officer at Lombard Odier.Typical safe haven assets like gold have meanwhile been beneficiaries of the escalating trade war, as the yellow metal reached a record high of $2,993.80 an ounce on Friday. It was on track to gain 2.6% for the week.
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