Asian Stocks and AUD Rise on Trade and Earnings Boost

• Asian markets rallied fueled by optimism around new trade agreements and strong corporate earnings boosting investor confidence. 

• Ongoing trade talks have reduced fears of severe tariffs, although concerns remain as some tariff increases continue to impact consumers. 

• Robust earnings reports from major companies lifted market sentiment, while mixed results from key players added cautious uncertainty. 

Stocks across Asia rose on Thursday, with the Australian dollar reaching an eight-month high, buoyed by optimism surrounding corporate earnings and ongoing trade negotiations. Tokyo’s Topix index hit a record high following new milestones on Wall Street, fueled by a U.S.-Japan trade deal that sparked hopes for more agreements to prevent further tariffs.

Despite growing optimism, concerns linger as tariffs continue to rise. ANZ’s head of G3 economics, Brian Martin, noted that while worst-case tariff fears are subsiding, upcoming increases still pose challenges for consumers. The EU and U.S. are nearing a deal that would impose 15% tariffs on European imports while waiving duties on certain goods. Meanwhile, Treasury Secretary Scott Bessent confirmed upcoming U.S.-China talks scheduled in Stockholm next week, signaling ongoing diplomatic efforts. The U.S. also finalized deals with the Philippines and Indonesia, with an EU agreement anticipated soon.

The U.S. second-quarter earnings season is underway, with 23% of S&P 500 companies having reported and 85% beating expectations. Futures for Nasdaq and the S&P 500 also climbed after Alphabet's strong earnings launched the "Magnificent Seven" earnings season. Alphabet outperformed estimates, citing increased demand for its cloud services and expanding capital expenditure plans. However, Tesla posted its worst sales drop in over a decade with profits trailing analyst forecasts. 

• MSCI’s Asia-Pacific index (excluding Japan) rose 0.4%, hitting a near four-year peak 

• Japan’s Topix surged 1.4% to a new all-time high, while the Nikkei 225 continued its upward momentum from Wednesday, approaching the record high it reached last year. 

• the Australian dollar fetched $0.66 near its highest level $0.6604 since November 2024 

• The U.S. dollar dropped 0.31% to 146.03 yen

• U.S. crude oil prices climbed 0.52% to $65.59 per barrel 

• Spot gold traded at $3,382.79 per ounce, edging down slightly as easing trade tensions reduced safe-haven demand despite support from a weaker U.S. dollar. 

• pan-region Euro Stoxx 50 futures shot up 1.3% at $5,435, while German DAX futures were up 1.15%. in early trading