EU a little less excited one day on
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Why did the US‑EU trade deal trigger a US dollar rally and a sharp Euro decline?
Well, it was a deal that was better than the alternative. That's about all you can say about it. And today European equities reflect a deal that created a worse situation for Europe, even if it was better than what President Trump was threatening. But it does seem to have bolstered the spirit for the United States with the dollar much higher, although equities there are somewhat contained as well. So in short, nobody seems particularly ecstatic about President Trump's biggest deal yet. It's Tuesday's the twenty. Well, quite a jump in the US dollar. It's up more than one percent now, heading to ninety eight point seven on the DXY against that well, uh one point three percent drop in the euro, one percent drop in the Swiss franc, a naught point six percent drop in the yen and the pound, and the Aussie dollar is down naught point seven percent to sixty-five point two US cents this morning.
And US stocks are mixed at the close, a naught point one percent drop in the Dow. The S P is well, you call it flat, it is marginally Up and actually marginally up enough for it to actually be closing at a new record high. Uh the Nasdaq is up, but only a third of one percent at the close. In Europe, stocks are down, 0.4% lower for the FTSE one hundred, uh, and for the CAC Coron, one percent lower for the DAX, and European bond yields are down as well. Ten year yields down four basis points in France and Spain, down five in Italy, three in Germany, but up one basis point in the UK and up two basis points for ten year treasuries in the US and big moves in oil up today. Two point eight percent added to WTI, two point seven percent for Brent.
Brent over seventy dollars a barrel now. So here's Nabre Atrill joining me from Sydney.
Why are European equities falling despite the US‑EU deal being better than a no‑deal scenario?
And a curious thing, I mean you would have thought the EU deal would be a good thing. It certainly fell like that yesterday, but Europe European equities are well down. We've got this big fall in the euro as well, almost as though it wasn't such good news. Uh I mean the euro's fallen down the the most in two months.
Yeah, good morning, Phil. It's um you know, whether we just want to simply dismiss this as you know, we bought the rumour last week that uh you know, uh on the back of the deals that we'd seen with with Japan in particular, that uh the makings of a deal with the U with uh Europe look to be taking shape and markets seem to be buoyed by that. And then I think it's a case of uh so it's either buy the rumour, sell the fact, but I think also, you know, that sense that yes, in a relative basis, um, you know, the deal that the US and the EU have struck is um is a lot better than might have been the case. Well certainly under a no deal scenario where President Trump imposed that sort of thirty percent uh threat.
And I think that uh the EU would then have been on a bound to um to initiate some sort of sanctions and then we're back into the potential sort of rerun of what we saw in April uh with respect to US and China, where we had this sort of tit for tat escalation of of tariffs. So that was the sort of tail risk worse fears I think that that that were allayed last week following the Japan deal and positive mood music. But um but now I think it's a case of saying, hey, on a relative basis this is a lot better than it might have been. But in absolute terms, it's not a great deal for Europe and we've already seen that with various
Dark day for you for the for for Europe or for the EU is what Francois uh Beirut, the French Prime Minister, said, and Spanish Prime Minister Pedro Sanchez uh said he gave his support for the deal without any enthusiasm and uh Emmanuel Macron uh just hasn't said anything about it at all.
What did European leaders say about the US‑EU trade agreement and its outlook?
So yeah, all the leaders are out there uh dissing it basically.
No, absolutely. And uh and Mr Merz, the German Chancellor, has uh has similarly been saying, Look, it's the best deal we could do, we had to do a deal, but he's clearly you know saying this is going to have a pretty significant impact on uh you know on Eurozone growth, and particularly for those export dependent countries of which Germany obviously is uh you know is is number one there.
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Chapters
8 chapters
1
Why did the US‑EU trade deal trigger a US dollar rally and a sharp Euro decline?
0:01–1:35
2
Why are European equities falling despite the US‑EU deal being better than a no‑deal scenario?
1:35–3:21
3
What did European leaders say about the US‑EU trade agreement and its outlook?
3:21–4:41
4
Why did the German stock market swing from a gain to a loss after the deal news?
4:41–5:50
5
How are secondary sanctions on Russian oil influencing today’s oil price surge?
5:50–7:56
6
Will ongoing US‑China negotiations change the impact of the EU deal on markets?
7:56–9:37
7
What does the recent US‑dollar rally mean for upcoming Q2 GDP and Fed policy expectations?
9:37–11:20
8
Which earnings reports and economic data should investors focus on after today’s market moves?
11:20–12:18