(Bloomberg) — Asian stocks traded in a tight range Wednesday as investors searched for a clear direction amid weaker US consumer confidence and uncertainty about President Donald Trump’s upcoming tariffs.
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The MSCI Asia Pacific Index snapped a three-day decline, eking out a 0.2% gain after it lost early momentum. US copper surged to a record high as traders priced in the possibility of hefty import tariffs. US and European equity-index futures were steady while the 10-year US Treasury yield edged up. The dollar was little changed after ending a four-day rally Tuesday.
The Trump administration indicated earlier this month that the coming wave of US tariffs may be less expansive and more targeted than originally feared. On Tuesday, Trump said he didn’t want have too many exceptions but he will “probably be more lenient than reciprocal, because if I was reciprocal, that would be that would be very tough for people.”
While markets have taken some comfort from Trump’s recent comments about the “reciprocal” tariffs he is due to announce April 2, Tuesday’s US economic data adds to concerns investors have about growth in the world’s largest economy. One positive news amid the uncertainty was Morgan Stanley and Goldman Sachs strategists boosting their optimism for Chinese stocks, citing factors including improving earnings outlook.
“There’s an elevated baseline anxiety in the markets,” ahead of next week’s announcements, said Kyle Rodda, a senior market analyst at Capital.com. “However, that’s eased somewhat courtesy of comments from the US President about narrower and more targeted trade restrictions.”
Trump is preparing a “Liberation Day” tariff announcement on April 2, unveiling so-called reciprocal tariffs he sees as retribution for levies and barriers from other countries, including longtime US allies. While the announcement would remain a very significant expansion of US tariffs, it’s shaping up as more focused than the sprawling, fully global effort Trump has otherwise mused about, officials familiar with the matter say.
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US tariffs on copper imports could be coming within several weeks, months earlier than the deadline for a decision, according to people familiar with the matter.
The Hang Seng Tech Index of big Chinese stocks in the sector rallied as much as 1.6% on Wednesday, after falling to the brink of a correction the day before. Morgan Stanley strategists raised their 2025 year-end index targets for Chinese stocks. Similarly, strategists at Goldman Sachs expect more fundamental upside to the recent rally as more positive earnings revisions should be coming.
Chinese stocks are “taking a breather, I don’t think it’s the end,” said Vey-Sern Ling, a managing director at Union Bancaire Privee. “Valuations are still cheap, government is supportive of technology and consumption. And innovation is alive and kicking.”
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On the geopolitical front, the US said Russia and Ukraine agreed to a ceasefire in the Black Sea, even as the Kremlin said its involvement would depend on a series of preconditions including sanctions relief. The US also “will help restore Russia’s access to the world market for agricultural and fertilizer exports, lower maritime insurance costs, and enhance access to ports and payment systems for such transactions,” according to the White House.
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European equities’ rally may be challenged as valuations become less enticing. The Euro Stoxx 50’s BEst P/E ratio has edged above its 5-year average thanks to the narrative behind Germany’s fiscal push. With tariffs looming, several industries are under threat including healthcare, industrials and autos.
Former European Central Bank President Mario Draghi said Germany’s decision to ramp up defense spending is a “game changer” but warned there are risks when it comes to how it’s implemented.
In Turkey, President Recep Tayyip Erdogan is taking steps to ensure protests across the country don’t worsen and to contain a rout in financial markets, even as he turns the screws on opponents.
US consumer sentiment surveys have been dismal of late as households fear a resurgence in inflation from Trump’s tariffs. Companies have warned of higher prices and less demand, coinciding with economists’ forecasts that suggest a risk of stagflation and rising odds of recession.
The Fed is no longer on the “golden path,” witnessed in 2023 and 2024, Austan Goolsbee, president of the Chicago Fed, told the Financial Times in an interview. Goolsbee cautioned it may take longer than anticipated for the next rate cut because of economic uncertainty.
In commodities, oil rose on Wednesday after an industry report indicated a drawdown in US inventories. Gold held near a record.
Some of the main moves in markets:
Stocks
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S&P 500 futures fell 0.1% as of 6:45 a.m. London time
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Nasdaq 100 futures fell 0.1%
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The MSCI Asia Pacific Index rose 0.2%
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Hong Kong’s Hang Seng rose 0.3%
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The Shanghai Composite was little changed
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Euro Stoxx 50 futures were unchanged
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0786
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The Japanese yen fell 0.4% to 150.52 per dollar
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The offshore yuan fell 0.1% to 7.2742 per dollar
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The British pound was little changed at $1.2936
Cryptocurrencies
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Bitcoin fell 0.2% to $87,761.1
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Ether was little changed at $2,064.03
Bonds
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The yield on 10-year Treasuries advanced two basis points to 4.33%
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Germany’s 10-year yield advanced three basis points to 2.80%
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Britain’s 10-year yield advanced four basis points to 4.75%
Commodities
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rob Verdonck and Chris Bourke.
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