Asian stocks edge up; dollar at mercy of US trade whims

Asian share markets and the dollar made a cautious start on Monday as confusion over U.S. trade policy showed little sign of easing, in a week packed with major economic data and mega-tech earnings.

While US President Donald Trump has claimed progress is being made on trade with China, and many other countries, actual evidence is lacking. Treasury Secretary Scott Bessent failed on Sunday to back Trump's assertion that tariff talks with China were under way.

"The uncertainty itself is at least as damaging as the tariffs themselves, hurting the US economy at least as much as the rest of the world," said Christian Keller, head of economics research at Barclays.

"Even if the ongoing earnings season still shows robust numbers, many companies will likely prepare to hunker down until visibility improves," he warned. "This makes a recession increasingly likely."

Early action in markets was light, with MSCI's broadest index of Asia-Pacific shares outside Japan edging up 0.1%. Japan's Nikkei rose 0.9%, while South Korea firmed 0.2%.

EUROSTOXX 50 futures added 0.3%, while FTSE futures and DAX futures both rose 0.2%.

Going the other way, S&P 500 futures dipped 0.4% in early trade, while Nasdaq futures eased 0.5%. The S&P has bounced almost 12% from the April 8 trough, but remains 10% below its peak.

Corporate earnings have been generally supportive, with gains of more than 9%, though BofA noted 64% of companies had beat on EPS compared to 71% the previous quarter.

About 180 S&P 500 companies representing over 40% of the index's market value report this week, including mega-caps Apple, Microsoft , Amazon and Meta Platforms.

The week is also packed with economic news including U.S. employment, gross domestic product and core inflation.

Payrolls are seen rising 135,000 and inflation is expected to ease, but there is much more uncertainty about GDP given a surge in gold imports will bias the headline number lower. The median forecast is for a meagre 0.4% annualised growth, but the Atlanta Fed GDPNow measure has it at -0.4% excluding gold.

DOLLAR HELD HOSTAGE

The jobs number is the more timely release and should help refine market wagers on Federal Reserve policy, with futures currently implying a 64% chance of a rate cut in June and 85 basis points of easing by year-end.

"We expect another solid non-farm payrolls figure, pushing back against expectations that the Fed will ease policy in June," said Jonas Goltermann, deputy chief markets economist at Capital Economics.

If correct, that would aid the dollar's bounce from recent three-year lows, he added.

"But the Trump administration's unconventional approach across a range of policy areas will probably cause some longer-lasting damage to confidence in the U.S. as a safe haven," he warned. "The greenback is still hostage to the administration's whims."

The dollar index was steady at 99.695 , above last week's low of 97.923, while the euro held at $1.1350 and short of its recent top at $1.15783.

Consumer price data for Germany and the euro zone due this week are expected to show a further dip in headline inflation, adding to expectations the European Central Bank will cut rates again at its June meeting.

The Bank of Japan meets this week and is considered certain to hold rates at 0.5%, given the economic and trade uncertainty caused by U.S. tariffs argues against another hike.

The dollar has edged up to 143.65 yen , from last week's seven-month low of 139.89, but remains just over 4% lower for April so far.

Treasuries have also steadied in the wake of Trump's assurance he would not try and fire Fed Chair Jerome Powell, leaving 10-year yields at 4.235% compared to the April top of 4.592%.

The tentative improvement in risk sentiment saw gold ease back to $3,307 an ounce , from its all-time peak of $3,500.

Oil prices made a quiet start, having been pressured in recent weeks by worries of a global economic slowdown and plans for increased supply from OPEC.

Brent rose 13 cents to $66.98 a barrel, while U.S. crude added 7 cents to $63.09 per barrel.