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Global sentiment lifts off: The US-EU agreement’s ripple through stocks, commodities, and digital currencies

Global sentiment lifts off: The US-EU agreement’s ripple through stocks, commodities, and digital currencies

The announcement of a US-EU trade agreement on Sunday has acted as a catalyst, easing tensions that had previously weighed on investor confidence. This development has had a ripple effect across various markets, influencing equities, bonds, commodities, and cryptocurrencies.

As we approach a week marked by high-stakes economic events and corporate earnings, understanding these dynamics becomes increasingly crucial. In my view, the renewed optimism is a welcome change, though the mixed signals in some markets suggest that caution remains warranted.

Let me tell you more.

A boost from the US-EU trade agreement

The US-EU trade agreement has emerged as a pivotal factor in lifting global risk sentiment. For months, trade uncertainty had cast a shadow over markets, with investors wary of escalating tariffs and disruptions to global supply chains.

The deal announced on Sunday has alleviated some of these concerns, fostering a more risk-on environment. Investors are now more inclined to allocate capital to growth-oriented assets like stocks, rather than seeking refuge in traditional safe havens like bonds or gold.

This shift reflects a broader belief that economic stability might be within reach, at least in the short term. However, with major events like the Federal Open Market Committee meeting and US payroll data looming, the sustainability of this optimism remains an open question.

US markets: Choppy trading and rising yields

In the United States, stock markets closed mixed after a volatile session, capturing the complexity of the current environment. The S&P 500 inched up by 0.02 per cent, signalling modest gains, while the NASDAQ climbed 0.33 per cent, driven by strength in technology stocks.

Meanwhile, the Dow Jones Industrial Average dipped by 0.14 per cent, hinting at lingering caution among traders. This uneven performance suggests that while the trade agreement has bolstered confidence, investors are still grappling with uncertainties tied to upcoming economic releases and corporate earnings.

US Treasury yields, which often serve as a barometer of market sentiment, edged higher across the curve. The 10-year Treasury yield rose by 2.2 basis points to 4.410 per cent, and the two-year yield ticked up by 0.2 basis points to 3.926 per cent.

These increases suggest that investors are shifting away from the safety of government bonds, aligning with the broader risk-on sentiment. Higher yields also reflect expectations of stronger economic growth, though they could pressure equity valuations if the trend accelerates.

The US Dollar Index, a measure of the dollar’s strength against major currencies, advanced by 1.01 per cent. A stronger dollar typically accompanies periods of economic optimism, as it did here, fuelled by the trade deal and improving risk appetite. This dollar rally could pose challenges for US exporters, but it also underscores the market’s faith in the resilience of the US economy.

Commodities: Diverging paths for gold and brent crude

Commodities have displayed divergent trends amid the shifting sentiment. Gold, a classic safe-haven asset, extended its retreat, falling by 0.68 per cent to US$3,315 per ounce.

This decline is understandable in the context of a rising risk appetite, as investors reduce their holdings of gold in favor of assets with higher potential returns. I see this as a natural response to the trade agreement, though gold could regain favor if new uncertainties emerge.

In contrast, Brent crude oil surged by 1.9 per cent to US$70 per barrel, propelled by President Trump’s proposal to impose secondary tariffs on nations purchasing Russian oil ahead of a 50-day deadline. This move has raised concerns about a tighter oil supply, which is expected to boost prices.

The rally also reflects the improving global economic outlook, which tends to lift energy demand. The energy market remains vulnerable to geopolitical shifts, and any escalation in trade disputes could alter this trajectory.

Asian markets and US futures: A mixed outlook

Asian stock markets mirrored the uneven performance seen in the US, with Japan’s Nikkei 225 pulling back by 1.1 per cent. This decline likely stemmed from profit-taking after recent gains, though it highlights that not all regions are fully embracing the risk-on wave. Despite this, US equity index futures suggest that US stocks will open higher, pointing to sustained positive momentum.

Investors are now fixated on a packed week ahead, featuring the FOMC meeting, US ISM manufacturing data, non-farm payrolls, second-quarter GDP figures, and earnings from four of the “Magnificent Seven” tech giants. These events will likely determine whether the current optimism persists or wanes.

Cryptocurrencies: Ethereum’s surge and Bitcoin’s mining milestone

The cryptocurrency market has also captured attention, with Ethereum briefly topping US$3,900, its highest level since December, before pulling back. This surge underscores growing investor enthusiasm for Ethereum, driven by its expanding role in decentralised finance and smart contract applications.

Bernstein analysts have noted that Ethereum treasuries, companies holding Ethereum as a reserve asset, are adopting a distinct approach compared to their Bitcoin-focused counterparts. These treasuries generate staking rewards, providing a yield on their holdings, which marks a significant evolution in how institutions utilise cryptocurrencies.

The analysts caution that this model introduces liquidity and security risks. Staking contracts, while generally liquid, can require days-long queues to unstake, forcing Ethereum treasuries to balance availability with yield optimisation. More advanced strategies, such as restaking or DeFi-based yield generation, further complicate matters by exposing firms to vulnerabilities in smart contracts.

This trade-off between yield and risk highlights the maturing nature of the crypto market, where innovation often comes with growing pains. Companies will need to navigate these challenges carefully to sustain Ethereum’s momentum.

Bitcoin, meanwhile, has seen its mining power approach a new record, with the 7-day average hashrate reaching 942 exahashes per second. This figure sits just below the all-time high of 943.6 exahashes per second set in mid-June, according to data from Blockchain.com.

The hashrate, which tracks the total computing power dedicated to mining Bitcoin, offers insight into the network’s security and the confidence of miners. The recent surge suggests that miners remain bullish on Bitcoin’s long-term prospects, despite its price cooling off in recent weeks.

This increase in mining power has persisted despite a new all-time high in Bitcoin’s difficulty, which adjusts to make mining more challenging as more power is added. Miners’ willingness to expand operations under these conditions reflects their belief in future price gains, likely driven by Bitcoin’s historical resilience and growing institutional adoption.

I find this development encouraging, as it signals a robust foundation for Bitcoin, though it also raises questions about energy consumption and profitability if prices stagnate.

My perspective: Optimism tempered by caution

From my standpoint, the advance in global risk sentiment is a positive development, particularly after months of trade-related uncertainty. The US-EU agreement has provided a much-needed lift, and its effects are evident across equities, currencies, and commodities.

The strength in the US dollar and Brent crude, coupled with Ethereum’s price surge and Bitcoin’s mining milestone, paints a picture of a market eager to move forward. Yet, the mixed performance of US and Asian stock markets, along with gold’s decline, reminds us that not all investors are thoroughly convinced.

The week ahead will be crucial in determining whether this momentum is sustained. The FOMC meeting could signal shifts in monetary policy, while economic data, such as payrolls and GDP, will shed light on the health of the US economy. Earnings from tech giants will also play a role, given their outsized influence on market indices.

In my opinion, the current risk-on environment offers opportunities, but investors should remain vigilant. The cryptocurrency space, with its blend of innovation and risk, exemplifies this duality. Ethereum treasuries and Bitcoin miners are pushing boundaries, yet they face hurdles that could temper their progress.

 

Source: https://e27.co/global-sentiment-lifts-off-the-us-eu-agreements-ripple-through-stocks-commodities-and-digital-currencies-20250729/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

US-Japan deal, EU talks, and Japan’s Bitcoin bet: A new chapter for global finance

US-Japan deal, EU talks, and Japan’s Bitcoin bet: A new chapter for global finance

The global economy is buzzing with some pretty exciting developments. I will explore what’s happening with the US-Japan trade agreement, the whispers of a US-EU deal, the possibility of a Bank of Japan rate hike, and even a Japanese company’s bold leap into Bitcoin.

I’ll break it all down for you in a way that’s easy to follow, and throw in some of my thoughts.

The US-Japan trade deal: Easing tensions, boosting confidence

First up, let’s talk about the US-Japan trade deal that’s been making headlines. This agreement is a big deal, literally and figuratively. The US has agreed to slash its planned tariffs on Japanese goods from a steep 25 per cent down to a more reasonable 15 per cent, and that includes autos, which are a massive part of Japan’s export economy.

Imagine you’re a Japanese automaker – Toyota, Honda, Nissan, take your pick. This news is like a breath of fresh air. Lower tariffs mean your cars can roll into the US market more competitively, potentially boosting sales and giving your bottom line a nice lift.

For the US, this deal isn’t just about letting more Japanese cars in. It’s likely tied to some reciprocal benefits, like Japan agreeing to buy more American goods or invest in US projects. Think of it as a two-way street: Japan gets better market access, and the US might see more jobs or economic activity as a result. What I love about this is how it shows that diplomacy can still work in a world that’s often felt like a trade-war standoff. After years of tariff threats and uncertainty, this feels like a step toward stability.

Now, here’s where it gets really interesting. The easing of these trade tensions has markets buzzing about what the Bank of Japan might do next. For ages, Japan’s central bank has kept interest rates at rock bottom – we’re talking zero or near-zero levels – to jumpstart its economy.

But with trade pressures easing, there’s talk of a possible rate hike in 2025. That’s a huge shift! A rate hike would signal that Japan’s economy is finally finding its footing, which could strengthen the yen. On the flip side, it might make life trickier for Japanese exporters if their goods get pricier abroad. It’s a bold move if it happens, and I’m rooting for Japan to pull it off without rocking the boat too much.

US-EU tariff talks: Could this be round two?

While the US-Japan deal is grabbing the spotlight, there’s another story brewing across the Atlantic. Reports are swirling that the US might be closing in on a similar 15 per cent tariff agreement with the European Union. Picture this as a sequel to the Japan deal – same vibe, different players.

If it goes through, it’d mean lower tariffs on European goods coming into the US, possibly paired with European investment flowing back the other way. The Euro Stoxx 50, a key European stock index, jumped 1.0 per cent on the news, indicating that investors are already getting excited about the possibilities.

If the US can strike deals with both Japan and the EU, it’s like hitting the trifecta of trade diplomacy. Less tension with major partners could mean smoother sailing for global trade, which has been choppy lately. I think this could be a game-changer, not just for the economies involved but for the whole world.

Fewer trade barriers often lead to more growth, and who doesn’t want that? The catch is, we’re still waiting to see if this deal sticks – the August 1 deadline for reciprocal tariffs is looming, so the clock’s ticking.

Markets are loving it: A global rally unfolds

Okay, let’s check in on how the markets are reacting, because they’re not sitting still. In the US, stocks surged after the trade news broke. The S&P 500 climbed 0.78 per cent to a record 6,309.62, the Dow Jones surged 1.14 per cent, and even the tech-heavy NASDAQ edged up 0.61 per cent to 20,892.69, despite a slight dip later. That’s a solid rally, showing investors are feeling good about where things are headed.

It’s not just a US party, though. Over in Asia, the MSCI Asia ex Japan index shot up 1.4 per cent, and the HSCEI, which tracks Chinese stocks in Hong Kong, hit its highest close since October 2021. That’s a big deal – it’s like the optimism is contagious, spreading across borders and lifting spirits everywhere. I see this as a sign that when big economies play nice, everyone benefits. Today’s early trading in Asia was a bit mixed, and US futures hint at a choppy open, but the overall vibe is… Pretty upbeat.

Then there’s the bond market. US Treasury yields ticked up, with the 10-year yield rising five basis points to 4.38 per cent and the two-year yield hitting 3.88 per cent. Higher yields typically indicate that investors expect stronger growth or perhaps a bit more inflation in the future.

To me, this ties back to the trade deals – less uncertainty could mean a healthier economy, and that’s pushing yields up as people ditch safe bets for riskier plays. The US Dollar Index dipped 0.18 per cent, and gold slid 1.3 per cent, which backs that up. When safe-haven demand softens, it’s a clue that folks are feeling bolder.

Crypto’s wild ride: Greed, gains, and a breather

Now, let’s switch gears to the crypto market, because it’s been a wild ride over there too. Bitcoin and altcoins, such as Ethereum and XRP, have been on a tear lately, racking up massive gains over the past few weeks. It’s the kind of run that gets crypto fans hyped – and honestly, I get it.

Something is thrilling about watching digital assets soar. But today, the charts are showing a sea of red candles for most of the top 100 coins by market cap. After testing some significant resistance levels, it appears that the bulls are taking a breather.

Don’t let that fool you into thinking the party’s over, though. The Fear & Greed Index, which measures crypto sentiment, is sitting at 70 – firmly in greed territory and the highest since July 12. That suggests to me that this pullback might simply be profit-taking after an explosive stretch, rather than a full-on reversal.

I’ve seen this before in crypto: big runs often hit a pause before the next leg up. So, while the traditional markets are riding trade-deal optimism, crypto’s doing its own thing – cooling off but still brimming with bullish energy.

Kitabo’s Bitcoin bet: A Japanese twist

Speaking of crypto, here’s a curveball from Japan that caught my eye. Kitabo Co., Ltd, a company that makes synthetic fiber spun yarns and trades on the Tokyo Stock Exchange, just announced it’s jumping into Bitcoin.

They’re planning to buy ¥800 million – that’s about US$5.4 million – worth of BTC using dollar-cost averaging, where you spread out purchases over time to smooth out price swings. This isn’t just a random punt; Kitabo’s been bleeding cash, losing ¥115.6 million (US$785,000) in fiscal 2024, and they’re hoping Bitcoin can help turn things around.

I find this fascinating. Kitabo’s joining a growing club of Asian companies using Bitcoin as a treasury asset – think of it as a hedge against a weakening yen or a way to diversify when traditional options aren’t cutting it. They’re even calling this their full-scale entry into crypto and real-world asset businesses, which sounds ambitious for a yarn maker!

My take is that it’s a smart, if gutsy, move. Dollar-cost averaging reduces the risk of buying at a peak, and if Bitcoin continues to climb, it could be a lifeline for a struggling firm. Additionally, it’s another indication that crypto’s going mainstream, even in unexpected areas.

What do you think? Excited for what’s next? I know I am!

 

Source: https://e27.co/us-japan-deal-eu-talks-and-japans-bitcoin-bet-a-new-chapter-for-global-finance-20250724/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Is the EU Leading the Charge or Losing the Race in Regulating AI?

Is the EU Leading the Charge or Losing the Race in Regulating AI?

As I sit down to reflect on the European Union’s emerging AI regulatory framework, I can’t help but feel a mix of admiration and unease. The EU is charting a bold course, aiming to classify AI tools based on their potential risks and impose stricter rules on high-risk systems like self-driving cars and medical technologies, while giving more leeway to lower-risk applications like internal chatbots.

As someone who has spent years covering the intersection of technology and policy, I’ve seen the transformative power of innovation and the chaos that can ensue when it’s left unchecked. The EU’s approach feels like a necessary step toward ensuring AI remains trustworthy and aligned with human values, but I worry it might come at the cost of stifling the very creativity it seeks to protect. This isn’t just a European issue—it’s a global one, and the world is watching closely.

The EU’s AI Act, which took effect in August 2024, is a groundbreaking piece of legislation, the first of its kind to tackle AI governance on such a comprehensive scale. The European Commission has divided AI systems into four risk categories: unacceptable, high, limited, and minimal. High-risk systems, like those used in healthcare or law enforcement, face rigorous requirements, including mandatory safety checks and detailed documentation. For instance, AI tools in medical devices must meet strict standards to ensure they don’t endanger patients, a move that reflects the EU’s deep commitment to safeguarding fundamental rights, as outlined in the official documentation of the AI Act. On the other hand, lower-risk systems, such as chatbots used within companies, are subject to lighter regulations, allowing businesses to innovate without being bogged down by red tape. It’s a thoughtful, risk-based approach designed to strike a balance between fostering innovation and protecting citizens.

I can’t help but admire the EU’s ambition here. Growing up in a world where technology often seemed to outrun regulation, I’ve seen the consequences of letting innovation run wild—data breaches, biased algorithms, and the erosion of privacy. The EU’s General Data Protection Regulation (GDPR), implemented back in 2018, set a global standard for data privacy, inspiring similar laws in places like Brazil and California. Over 130 countries have adopted data protection laws influenced by the GDPR, proving that the EU has the power to shape global norms. The AI Act could follow in its footsteps, becoming the go-to model for AI regulation worldwide. For companies operating in or targeting the European market, compliance isn’t just a legal checkbox—it’s a strategic necessity. Getting ahead of these rules could save businesses from costly last-minute scrambles and bolster their reputation as ethical innovators.

But there’s a catch, and it’s a big one. Critics worry that the EU’s regulatory zeal could backfire, particularly for smaller companies and startups. The European Commission estimates that compliance costs for high-risk AI systems could amount to €400,000 per system, depending on the complexity and scale. For small and medium-sized enterprises (SMEs), which make up 99% of all businesses in the EU and employ nearly 100 million people, these costs could be dealbreakers. I’ve spoken to entrepreneurs who fear they’ll be priced out of the European market or forced to abandon their AI projects altogether. If regulations push these smaller players away, Europe risks losing its competitive edge in a global AI race that’s heating up fast.

And then there’s the broader global context. While the EU is busy crafting its regulatory masterpiece, other major players like the United States and China are taking very different paths. The U.S., under President Donald Trump, has embraced a more hands-off approach, relying on voluntary guidelines and industry self-regulation. Meanwhile, China is pouring resources into AI development, with companies like DeepSeek emerging as global leaders. Analysts estimate that AI technology could bring $600 billion annually for China’s economy, fuelled by government support and a regulatory environment that’s far less restrictive than the EU’s. The third Artificial Intelligence Action Summit in Paris, held in February, highlighted these stark contrasts, with world leaders and tech executives grappling with how to regulate AI without losing ground to less regulated markets. China’s DeepSeek app, for example, which can self-train on coding and math problems, has only intensified these concerns, raising questions about whether the EU’s approach might leave it playing catch-up.

The EU’s AI Act also comes at a time when the AI landscape is evolving rapidly, with trends like AI-driven search snippets and workplace automation reshaping industries. Take Google’s AI Overviews, for example. A 2024 analysis by Seer found that these snippets, which provide answers directly on the search page, are reducing click-through rates for many businesses. While this is great for users who get quick answers, it’s a headache for companies that rely on organic traffic. On the workplace front, McKinsey’s 2024 report, “Superagency in the Workplace,” argues that AI can boost productivity and creativity but only if companies invest in training employees to collaborate with these tools. The report found that organizations that prioritize people-centric AI strategies—offering practical training, clear communication, and ethical guidelines—saw productivity gains. These insights suggest that regulation alone isn’t enough; success depends on how well organizations and societies adapt to AI’s potential.

Yet, for all the challenges, there’s a compelling case to be made for the EU’s approach. Proponents argue that well-crafted regulations can build trust and encourage responsible development. The AI Act’s focus on transparency, such as requiring developers to disclose details about their training data, resonates with growing public demand for accountability. 68% of Europeans want government restrictions on AI, citing concerns about privacy, bias, and job displacement. By addressing these issues head-on, the EU could position itself as a global leader in ethical AI, attracting businesses and consumers who value trust and safety. And let’s not forget the EU’s track record with the GDPR, which showed that robust regulation can coexist with innovation if it’s done right—thoughtfully, collaboratively, and with a clear eye on the bigger picture, as evidenced by its widespread global influence.

So, where does that leave us? As I see it, the EU’s AI regulatory framework is a bold and necessary experiment, one that reflects the bloc’s commitment to putting people first in an increasingly tech-driven world. But its success hinges on finding the right balance—encouraging innovation without sacrificing accountability and protecting rights without stifling growth. For businesses, the message is clear: don’t wait to adapt. Staying informed and preparing early could make all the difference, both in terms of compliance and reputation. For the EU, the challenge is even greater: to lead with vision, flexibility, and a willingness to learn from the global AI race. As a journalist, I’m cautiously optimistic, but I’ll be watching closely to see whether this framework becomes the global benchmark it aspires to be—or a cautionary tale of good intentions gone awry.

 

 

Source: https://intpolicydigest.org/is-the-eu-leading-the-charge-or-losing-the-race-in-regulating-ai/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j