LONDON - Stocks edged downwards and the dollar drifted near multi-year lows on Monday, after US officials flagged a delay on tariffs but failed to provide specifics on the changes, while oil prices slid as OPEC+ opened the supply spigots more than expected.
The United States is close to finalising several trade agreements in the coming days and will notify other countries of higher tariff rates by July 9, President Donald Trump said on Sunday, with the higher rates to take effect on August 1.
"President Trump's going to be sending letters to some of our trading partners saying that if you don't move things along, then on August 1 you will boomerang back to your April 2 tariff level," US Treasury Secretary Scott Bessent told CNN.
Trump in April announced a 10 percent base tariff rate on most countries and higher "reciprocal" rates ranging up to 50 percent, with an original deadline of this Wednesday.
With very few actual trade deals done, analysts had always suspected the date would be pushed out, though it was still not clear if the new deadline applied to all trading partners or just some.
Investors have grown somewhat used to the uncertainty surrounding US trade policy and the initial market reaction was cautious. S&P 500 futures fell 0.44 percent and Nasdaq futures were down 0.6 percent in early European trading hours.
Europe's benchmark STOXX index was down just 0.02 percent, while MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.6 percent.
The muted market reaction to the latest tariff twist showed that investors were becoming more attuned to the cycle of dramatic lurches in US trade policy under Trump, analysts said.
"The market now feels as if it has a handle on which countries or types of products will be most affected," said Scott Chronert, investment strategist for Citigroup.
"That doesn’t mean every scenario is priced in – it’s still set up for episodes of volatility. As always, people will sell first and ask questions later."
OPEC + SQUEEZE
Safe-haven bonds were better bid, with 10-year Treasury yields down almost 2 basis points at 4.3379 percent.
Major currencies were mixed as the dollar index nudged up 0.4 percent to 97.292. The euro held at $1.1738, just short of last week's top of $1.1830, while the dollar was 0.3 percent firmer at 145.02 yen.
The export-exposed Australian dollar was again used as a proxy for trade risk and fell 0.8 percent to $0.6500.
The dollar has been undermined by investor concerns about Trump's often chaotic tariff policy and what that might do to economic growth and inflation.
The same worries have kept the Federal Reserve from cutting rates and minutes of its last meeting should offer more colour on when the majority of members might resume easing.
It is a relatively quiet week for Fed speakers with only two district presidents on the docket, while economic data is also sparse.
The Reserve Bank of Australia is widely expected to cut its rates by a quarter point to 3.60 percent at a meeting on Tuesday, the third easing this cycle, and markets imply an eventual destination for rates of 2.85 percent or 3.10 percent.
New Zealand's central bank meets on Wednesday and is likely to hold rates at 3.25 percent, having already slashed by 225 basis points over the past year.
In commodity markets, gold slipped 0.7 percent to $3,311 an ounce, though it did gain almost 2 percent last week as the dollar fell.
Oil prices slid anew after the Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, agreed on Saturday to raise production by a larger-than-expected 548,000 barrels per day in August.
The group also warned that it could hike by a similar amount in September, leaving analysts with the impression it was trying to squeeze lower margin producers and particularly those pulling oil from US shale.
Brent dropped 0.4 percent to $68.01 a barrel, while US crude fell 1.1 percent to $65.28 per barrel.
