Asian Shares Make Modest Gains Amid Trade Uncertainty

Asian markets made slight gains on Monday as investors grappled with lingering uncertainty over U.S. trade policies and braced for a heavy week filled with major economic data releases and corporate earnings. Meanwhile, the dollar fluctuated without clear direction, reflecting the cautious sentiment across global markets.

Despite U.S. President Donald Trump’s recent claims of progress in trade negotiations with China and other nations, concrete evidence remains elusive. Adding to the confusion, Treasury Secretary Scott Bessent over the weekend refrained from backing Trump’s optimistic remarks about ongoing tariff discussions.

“The uncertainty itself is at least as damaging as the tariffs, impacting the U.S. economy as much as the global economy,” noted Christian Keller, head of economics research at Barclays.

Keller warned that even if corporate earnings reports remain strong, many companies are likely to scale back investments until clearer signals emerge — a situation that could increase the likelihood of a recession.

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Trading activity remained relatively light across the region. MSCI’s broadest index of Asia-Pacific shares outside Japan edged up by 0.1%, while Japan’s Nikkei rose 0.4%. South Korea’s KOSPI firmed 0.2%, and Chinese blue chips were mostly unchanged, as Beijing maintained its economic growth projections despite the ongoing tariff pressures.

European futures showed slight optimism, with EUROSTOXX 50 futures adding 0.2%, and FTSE and DAX futures both inching up by 0.1%.

However, across the Atlantic, U.S. futures showed weakness — S&P 500 futures slipped 0.5%, and Nasdaq futures declined 0.6%. Despite a strong rebound of nearly 12% from the April 8 lows, the S&P 500 still sits about 10% below its previous peak.

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Corporate earnings have generally provided support for equities, with more than 9% gains reported so far this season. However, Bank of America noted that only 64% of companies have beaten earnings-per-share (EPS) estimates this quarter, compared to 71% in the previous quarter.

The spotlight now shifts to heavyweight tech firms, with Apple, Microsoft, Amazon, and Meta Platforms all scheduled to report earnings this week.

The week ahead is crucial for economic indicators as well. Key data releases include U.S. employment numbers, GDP growth figures, and core inflation readings. Analysts forecast that payrolls will rise by 135,000, with inflation expected to ease slightly.

However, GDP figures present a more uncertain picture. The median forecast predicts a modest 0.4% annualized growth, but the Atlanta Fed’s GDPNow model, excluding a surge in gold imports, suggests a potential contraction of -0.4%.

On the currency front, the U.S. dollar index was slightly lower at 99.565, just above last week’s low. The euro held firm at $1.1364, staying below its recent peak, as investors await German and eurozone consumer price data expected to show a further drop in inflation. This could increase pressure on the European Central Bank to implement another rate cut at its June meeting.

The Bank of Japan also meets this week and is widely expected to keep its interest rate steady at 0.5%, with U.S. trade tensions adding a layer of caution to any policy changes.

Treasury yields have stabilized, with the 10-year yield at 4.246%, down from April’s high of 4.592%. The bond market found relief after Trump reassured markets that he would not seek to fire Federal Reserve Chair Jerome Powell.

Gold prices have eased slightly to $3,294 an ounce, pulling back from their recent record high of $3,500. Meanwhile, oil prices saw a muted start to the week amid ongoing concerns about global economic growth and increased OPEC supply. Brent crude rose 25 cents to $67.20 a barrel, while U.S. crude gained 30 cents to reach $63.32 a barrel.