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July 29, 2025 – 06:38

(Bloomberg) — Asian stocks slipped for a third day as momentum from recent trade deals lost traction and investors remained cautious in a week packed with economic data and corporate earnings.

The MSCI Asia-Pacific gauge dropped 0.8%, led by shares in Hong Kong. The dollar steadied after climbing the most since May. Futures for the S&P 500 edged up 0.1% after the index was little changed Monday, but still closed at a record high. Contracts for European stocks rose 0.2%. The euro edged lower after sliding the most in over two months in the prior session.

Optimism from recent tariff deals is fading, with investors turning their attention to a slate of key indicators — from jobs and inflation to broader economic activity. The spotlight will fall on the Federal Reserve’s policy decision Wednesday, where officials are expected to hold rates steady, followed by earnings from four megacap tech companies.

“The focus moves squarely onto US data this week and the Fed to a lesser extent,” said Nick Twidale, chief analyst at ATFX Global Markets. “Now that we are getting clarity on tariffs, we may see adjustments – probably downside – as analysts look at what implementation will mean for various jurisdictions.”

European capitals defended the trade deal struck with Trump while industry officials in Germany warned that the deal leaves the auto industry exposed and will make companies in Europe less competitive. Dutch minister for foreign trade said the agreement was “not ideal” and called on the commission to continue negotiations with the US.

European stocks fell on Monday.

“Market reaction to the trade deal has grown more rational, especially amid the recent swings in rate cut expectations,” said Dilin Wu, a research strategist at Pepperstone Group Ltd. “Investors are now more focused on ‘hard data’ to validate the economic and policy outlook, rather than over-interpreting trade agreements.”

Meanwhile, US and Chinese officials finished the first of two days of talks aimed at extending their tariff truce beyond a mid-August deadline and hashing out ways to maintain trade ties while safeguarding economic security.

The US will need more negotiations with India for an agreement, US Trade Representative Jamieson Greer said.

The key for markets this week is a rate decision by the Fed. The Bank of Japan is also meeting for its policy decision.

Chair Jerome Powell and his colleagues will step into the central bank’s board room for a two-day meeting starting Tuesday to deliberate on rates at a time of immense political pressure, evolving trade policy, and economic cross-currents.

In a rare occurrence, policymakers will convene in the same week that the government issues reports on gross domestic product, employment and the Fed’s preferred price metrics. Forecasters anticipate the heavy dose of data will show economic activity rebounded in the second quarter.

“Clearly, the Fed has moved towards an approach of data dependency, so we are really moving from one data point to the next,” Marc Franklin, a senior portfolio manager for asset allocation in Asia at Manulife Investment Management, said in a Bloomberg TV interview. The focus will be on the non-farm payrolls, he said. “That could be quite decisive for short-term policy decision making.”

Elsewhere in Asia, Trump said he had asked US officials to resume trade negotiations with Cambodia and Thailand after the countries agreed to halt fighting along a disputed border.

In Japan, an auction of two-year Japanese government bonds went without a hitch as the sale drew the strongest demand since October. Investors were attracted to bond yields that have approached the highest since 2008.

In commodities, oil fluctuated after President Donald Trump pushed for Russia to reach a swift truce with Ukraine or face potential economic penalties. Fidelity International said gold could hit $4,000 an ounce by the end of next year as the Fed lowers rates to cushion the US economy, the dollar drops, and central banks keep expanding holdings.

Corporate Highlights:

  • Chinese childcare-related stocks advance after the government rolled out a new subsidy program across the nation in an effort to boost the birth rate.
  • Jane Street Group LLC is expected to argue that its controversial Indian options trades were a response to outsized demand from retail investors.
  • Singapore Airlines Ltd. share’s slumped the most in almost a year after the carrier posted a sharp decline in quarterly profit.

Some of the main moves in markets:

Stocks

  • S&P 500 futures rose 0.1% as of 1:30 p.m. Tokyo time
  • Japan’s Topix fell 0.9%
  • Australia’s S&P/ASX 200 fell 0.1%
  • Hong Kong’s Hang Seng fell 0.9%
  • The Shanghai Composite was little changed
  • Euro Stoxx 50 futures rose 0.3%

Currencies

  • The Bloomberg Dollar Spot Index was little changed
  • The euro was little changed at $1.1578
  • The Japanese yen was little changed at 148.41 per dollar
  • The offshore yuan was little changed at 7.1804 per dollar

Cryptocurrencies

  • Bitcoin rose 0.5% to $118,652.28
  • Ether was little changed at $3,789.44

Bonds

  • The yield on 10-year Treasuries declined one basis point to 4.40%
  • Japan’s 10-year yield was little changed at 1.565%
  • Australia’s 10-year yield declined one basis point to 4.33%

Commodities

  • West Texas Intermediate crude fell 0.2% to $66.59 a barrel
  • Spot gold fell 0.1% to $3,310.67 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Winnie Hsu and Abhishek Vishnoi.

©2025 Bloomberg L.P.