Stock Rally to Continue as EU Deal Futures Increase – Asia Market Wrap

The record run in US markets looks certain to continue after the EU negotiated a trade agreement with Trump, allaying worries of a catastrophic trade war.

S&P 500 futures climbed 0.4% after the index reached five consecutive all-time highs last week. Contracts for European stocks rose 1% following the agreement, which levies 15% tariffs on the majority of the bloc’s exports. The MSCI All Country World Index set a new record, but Asian stocks remained unchanged. The Euro strengthened against the Dollar. Crude oil edged up 0.3%. Treasuries and a barometer of the greenback were stable.

Markets are rebounding from April lows, buoyed by the new trade pact and hopes that the US and China would extend their truce, alleviating concerns about Trump’s tariffs. This week’s major data, Fed and BoJ meetings, and earnings from megacap firms will put that confidence to the test, potentially shaping the outlook for markets and the global economy.

Trump and European Commission President Von der Leyen announced the EU Agreement on Sunday at his golf club in Turnberry, Scotland, but did not reveal the precise terms of the agreement or release any written documentation.

The hard-fought agreement will impose 15% tariffs on the majority of the bloc’s exports, including vehicles, averting a trade war that could have dealt a crushing blow to the global economy.