Expectations for US-China Tariff Talks... Asian and European Markets Rise, US Futures Fall

Treasury Yields Slightly Down and Gold Prices Fall from Peak

Focus on Big Tech Earnings and April Employment Data This Week

Asian and European markets rose slightly on the 28th (local time) due to speculation that US-China trade talks are unofficially underway. US stock index futures started slightly lower ahead of major economic indicators such as Big Tech earnings and April employment trends this week.

In the Asian market, Tokyo's Nikkei 225 index rose 0.38% on news that Toyota Motor is acquiring Toyota Industries, its largest supplier and former parent company. India's Sensex index rose 1.3% on expectations of a significant relocation of production bases by Big Tech such as Apple. South Korea's KOSPI index rose 0.1%, while Hong Kong's Hang Seng index and Shanghai index fell slightly.

Europe's Stoxx 600 index rose 0.5% on news of M&A activities involving UK and Italian companies. Deliveroo, a food delivery company listed in London, announced that it received a £2.7 billion (5.19 trillion won) acquisition offer from US company DoorDash, pushing its stock price to its highest in three years. Italy's Mediobanca proposed acquiring the asset management division of insurance company Assicurazioni Generali for €6.3 billion (10.33 trillion won).

The S&P 500 index, which had risen for four days after President Trump withdrew threats to fire Federal Reserve Chairman Powell, fell 0.2% in early morning Eastern Standard Time. Nasdaq 100 futures also fell 0.1%.

Gold prices, which hit an all-time high last week, fell 1.6% to $3,278 at one point during the day. According to Bloomberg, this is because investors are unwinding positions due to the recent surge.

The 10-year US Treasury yield traded at 4.262%, similar to the previous session, with little movement. The 30-year Treasury, which saw its yield drop 2 basis points (1bp=0.01%) to 4.717%, halted its price decline this month. The Bloomberg Dollar Spot Index rose 0.1%.

This week, Microsoft, Apple, Meta Platforms, and Amazon.com among the Magnificent 7 will announce their earnings. Wall Street analysts expect these four companies, along with Alphabet, Tesla, and Nvidia, to record an average profit increase of 15% this year. Excluding Tesla, the profit increase is expected to be higher.

Visa, Coca-Cola, Eli Lilly, and Berkshire Hathaway will also announce their earnings this week.

According to Reuters, President Trump claimed to have spoken with President Xi Jinping late last week, but the Chinese government denied that trade talks between the two countries are underway. Treasury Secretary Besent stated that the Trump administration is pursuing bilateral trade agreements with 17 partner countries excluding China.

Chris Turner, head of global markets at ING, pointed out, "It is important to see how this uncertainty particularly affects the US labor market."

This Friday, the April national employment report excluding the agricultural sector is scheduled to be released. Also, the first-quarter GDP data, which will partially reflect the impact of tariffs, and the core Personal Consumption Expenditures (PCE) index, the Fed's preferred inflation gauge, will be announced.

Guest reporter Kim Jung-ah kja@hankyung.com