The global financial markets are navigating another round of trade tensions as new tariffs between the US and China take effect. The US has imposed a fresh 10% tariff on Chinese exports, while China has responded with countermeasures, levying a 15% tariff on coal and LNG imports from the US and a 10% tariff on oil, agricultural machinery, and some automobiles.

Stock Markets Show Caution

European stock markets are trading tentatively, with the tech sector finding support from Infineon’s strength. However, US futures are pointing to a modestly lower open as investors assess the ongoing trade developments.

Currency Markets & Bonds

The US Dollar Index (DXY) is flat, while the Japanese yen is underperforming, reversing some of the strength it gained in the previous session. Meanwhile, antipodean currencies are lagging. In the bond market, yields have pulled back but remain above Monday’s lows as traders await further updates on the tariff situation between the US and China.

Commodities: Oil and Crude Softening

Oil prices are softer amid delayed tariffs on Canada and Mexico, coupled with China’s tariff retaliation, which is impacting market sentiment.

Key Economic Data & Earnings to Watch

Investors are eyeing important economic releases, including the US JOLTS Job Openings and New Zealand HLFS Jobs Report. Additionally, Federal Reserve speakers, including Fed’s Bostic and Daly, are set to provide insights on monetary policy.

On the corporate front, major earnings reports will be in focus, with results expected from companies such as AMD, Google, Snapchat, Chipotle, Amgen, PayPal, Spotify, Pfizer, Regeneron, PepsiCo, Merck, Estee Lauder, Marathon Petroleum, and Ball. European banks BMPS and Intesa Sanpaolo, along with Ferrari, are also set to report earnings, adding to the market’s volatility.

With trade tensions dominating headlines and major earnings on deck, market participants should brace for potential volatility in the coming sessions. As geopolitical developments unfold, investors will remain focused on key economic data and central bank commentary for further market direction.