by Wayne Cole and Amanda Cooper

Sydney/London (Reuters)-the shares and the dollar fell on Monday while trade tensions between the United States and China intensified and investors became defensive before employment on the United States and a widely awaited reduction in European interest rates.

The actions of the steel industry (link), which export metal to the United States, fell in response to the threat of Donald Trump, late Friday, to double customs duties on imported steel (link) and 50 %aluminum, starting June 4. This decision was criticized by European Union negotiators (link).

On Sunday, the American secretary to the Treasury, Scott Bessent, said that Donald Trump would soon support himself with Chinese President Xi Jinping in order to flatten the dispute on essential minerals (link).

Beijing (Link) then forcefully rejected Donald Trump’s commercial criticism, suggesting that a call could take some time.

With the resurgence of tensions on customs prices and trade, the feeling seemed fragile in Europe, where the Stoxx 600 fell by 0.2 % during the day and the state obligations of the euro zone sold, while the euro benefited from a movement of disengagement from investors in favor of dollar assets.

“The flip-flops in terms of commercial policy seem to have to continue and it seems that the uncertainty thus created does not bother Donald Trump at all. This should give investors the reason to renew the sale of the US dollar,” said Derek Halpenny, strategist at MUFG.

The dollar has lost 9 % of its value compared to a basket of six major currencies since the start of the year. The index was down 0.53 % over the day to 98.83.

The Officials of the White House also continued to minimize a court decision (Link) that Donald Trump had exceeded his authority by imposing generalized customs duties on imports from the United States business partners.

Investors will be on the lookout for signs indicating if Donald Trump will go forward with customs duties of 50 % on Wednesday or if he will backtrack as he often did before.

The shelters were the subject of high demand on Monday, the Japanese yen, the Swiss franc and the gold having straightened.

The surprising attack on Ukraine (link) on the Russian air bases aroused some speculation about the impact on peace talks that will resume on Monday.

In Poland, the nationalist opposition candidate (Link) Karol Nawrocki narrowly won the presidential election, bringing a major blow to the efforts of the centrist government to consolidate the pro-European orientation of Warsaw.

Price turbulence

In the US markets, the term contracts of the S&P 500 fell 0.3 %, while the Nasdaq’s term contracts lost 0.4 %, which suggests a decline at the opening of the markets. The S&P had climbed 6.2 % in May, while the Nasdaq had straightened 9.6 %, in the hope that the final customs duties on imports would be much lower than the staggering levels initially announced by Donald Trump.

The anticipation of customs duties has already caused significant fluctuations in the American economy, the contraction of the first quarter probably turning into a leap during this quarter, as imports decrease.

The GDPNOW estimate of the Atlanta Fed is 3.8 % at an annual rate for the April-June period, but analysts assume that this growth will slow down strongly during the second half.

This week, data on the manufacturing industry and employment in the United States will make it possible to take the pulse of the activity, with an expected increase of 130,000 jobs in May and an unemployment rate which should remain at 4.2 %.

An increase in unemployment is one of the few developments that could encourage the federal reserve to consider a new relaxation, investors who have largely given up a reduction this month or next month.

About 75 % of us have been made in September, although Fed officials have refrained from approving such a price.

Fed governor Christopher Waller (Link) said on Monday that reductions remained possible later in the year, because he saw risks of decreasing economic activity and employment and risks of increase in inflation linked to customs duties.

The Senate will start this week to examine a bill on taxes and expenses which will add about $ 3,800 billion to the debt of the federal government, which amounts to $ 36,200 billion.

On the other side of the Atlantic, the European Central Bank is considered almost certain to reduce its rates by a quarter of a point to 2.0% Thursday, while the markets will be sensitive to the indications on the possibility of another movement in July.

The Bank of Canada meets on Wednesday and the markets estimate that there is a 76 % chance that it maintains its rates at 2.75 %, while being pessimistic about the future, taking into account the risk of recession fueled by customs duties in this country.

On Monday, the dollar fell 0.9% on the yen to less than 143, and dropped by 0.6% to 0.818 Swiss francs. The euro increased by 0.55% to $ 1,1412, around its highest level since the end of April.

In the raw materials markets, gold increased by $ 3,356 to $ 3,356 after losing 1.9% last week. [GOL/]

Brut Brent oil increased by almost 4% to 65 dollars per barrel after OPEC+ decided to increase its production in July by the same amount as for each of the previous two months, relief for some who feared an even greater increase. [O/R]

(In the interest of people whose English is not the mother tongue, Reuters automates the translation of its articles in a number of other languages. Since automatic translation may generate errors or not include the necessary context, Reuters does not guarantee the accuracy of the text automatically translated, but provides these translations only for the convenience of its readers. Reuters declines all responsibility in the event of damage or by using the fully automated translation function.)

Copyright © 2025 Thomson Reuters