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Futures buoyant, dollar drifts as markets sail toward tariff storm
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Futures buoyant, dollar drifts as markets sail toward tariff storm
Mar 23, 2025 7:06 PM

SINGAPORE (Reuters) - Financial markets made an mixed start on Monday with U.S. stock futures rising but the dollar wavering ahead of a week driven by data, Chinese earnings and the threat of steep U.S. tariff hikes on the horizon.

S&P 500 futures were up about 0.6% in the Asia morning and Nasdaq 100 futures rose 0.8%. Japan's Nikkei and Hong Kong's Hang Seng climbed about 0.2%

The euro, which fell slightly last week, was up about 0.2% at $1.0835 in early trade. In emerging markets, Turkey's lira was on a knife's edge as the jailing of President Tayyip Erdogan's main rival unsettles investors.

Shares in Australia-listed fibre-cement maker James Hardie fell 12% after it said it would buy U.S. outdoor building products maker AZEK Company for $8.8 billion in cash and stock.

The week holds global purchasing managers index gauges, the U.S. Federal Reserve's preferred inflation reading, inflation data in Australia and Japan, a budget update in Britain and major earnings in China.

But it is likely to be updates on U.S. President Donald Trump's plans to for global reciprocal tariffs from April 2 that drives markets, and after a volatile month for stocks, bonds and currencies, analysts said there is no obvious trade ahead.

"It's very difficult to really devise a structural playbook," said Chris Weston, head of research at Pepperstone.

"You've got to put your mind into the head of the consumer and households," he said, since it has been fears of a slowdown in the world's biggest economy that has led to weeks of selling dollars and stocks and a strong rally for Treasuries.

"Anything that feeds into this higher probability of recession, higher probability of a stagflationary environment ... or that price pressures aren't transitory is where we start to get panicky a bit."

Trump has vowed to impose a complicated barrage of tariffs next week, the details of which are not clear save that they are to be calculated to reflect the impact of foreign tariffs as well as foreign value-added taxes on imports.

The S&P 500 eked out a gain on Friday after Trump hinted at flexibility, but after a rollercoaster first two months in power - including tariff hits on China, Mexico and Canada - traders are shy of betting that Trump is ready to cut deals.

Ten-year U.S. Treasury yields have fallen nearly 40 basis points from mid-February highs and were last steady at 4.27% and investors have been drawn abroad from U.S. stocks, with sharp rallies in Hong Kong and Europe as Wall Street fell.

Hong Kong shares are up 18% so far this year, the largest gain of any major market, but a drop of 4.4% over two sessions late last week pointed to a pause in the flow of money while traders consider their - and Trump's - next moves.

Earnings at automaker BYD, video platform Kuaishou as well as Chinese banks and several property developers will be in focus. In the U.S., discount retailer Dollar Tree and up-market athletic clothier Lululemon are on the calendar.

Gold sat just shy of last week's record high, buying $3,021 an ounce, while bitcoin held at $85,860.

"Cash and safe havens remain the counterbalance to any larger shift in strategy," said Bob Savage, head of markets macro strategy at BNY in a note to clients.

"We expect a series of diplomatic meetings to avert extreme tariffs eventually, but not by April, leaving the sequencing concerns over Trump's policy shifts continuing to move markets with ongoing economic uncertainty."

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