Dollar Gains & Stocks Drop as Trade Concerns Reappear – Asia Market Wrap

Stocks fell and the Dollar rose in a risk-averse start to the week, as Trump escalated trade tensions by announcing that the US will begin issuing tariff letters to countries as early as Monday.

MSCI’s index of Asian stocks lost 0.6%. Treasuries climbed higher, with the 10-year yield dropping roughly 2 bps to 4.33%. The Dollar index rose 0.1%, while the Chinese Yuan fell after Trump announced that people aligned with the BRICS group of nations will pay an additional 10% charge. The US will mail tariff letters and announce trade deals beginning Monday at 12 PM ET, he added.

Trade tensions have resurfaced as investors monitor progress in several countries’ negotiations with the US ahead of the July 9th deadline. Stocks have risen to record highs, rebounding from their April slump when sweeping tariffs were announced, fuelled by hopes that the tariff deadline will be extended, based on Trump’s habit of threatening first and then backing down.

Administration officials had previously indicated that higher tariffs will take effect on August 1 and hinted that some countries may be given extra time to negotiate agreements. Treasury Secretary Bessent suggested that some countries may be given a three-week delay to discuss.

Meanwhile, oil prices fell further when OPEC+ agreed to a larger-than-expected output increase next month, stoking concerns about oversupply at a time when US tariffs are fuelling concerns about demand. Brent crude fell 0.7% to $67.80 per barrel, following a 0.7% drop on Friday.