Asia Markets Dip as U.S. Tariff Delay Sparks Confusion; Oil Slides on OPEC+ Supply Boost

Asian markets edged lower on Monday as investors reacted to mixed signals from U.S. officials over impending tariff hikes, while oil prices declined after OPEC+ unexpectedly ramped up production.
U.S. Tariff Uncertainty Weighs on Markets
President Donald Trump announced Sunday that the U.S. would notify trading partners of higher tariffs by July 9, with new rates taking effect August 1. However, conflicting statements from officials left markets uncertain about the scope and scale of the changes.
In April, Trump had proposed a 10% baseline tariff on most nations, with “reciprocal” rates as high as 50% initially set for July 3. Treasury Secretary Scott Bessent suggested some countries could revert to April’s higher rates if negotiations stall. Trump also floated potential levies of “60% or 70%” on nations aligning with BRICS policies, further muddying the outlook.
ANZ analysts warned that escalating tariffs could “intensify downside risks to U.S. growth and increase upside risks to inflation.” Markets responded cautiously, with S&P 500 and Nasdaq futures down 0.3%, while Japan’s Nikkei (.N225) fell 0.5% and China’s CSI 300 (.CSI300) dropped 0.5%.
Dollar and Bonds See Safe-Haven Flows
The dollar index rose 0.2% to 97.142, but trade concerns kept pressure on the currency. The Australian dollar, often a proxy for trade sentiment, slid 0.7% to $0.6501. Meanwhile, 10-year Treasury yields dipped 2 basis points to 4.328% as investors sought safety.
Focus now turns to the Federal Reserve’s policy minutes, due this week, for clues on the timing of potential rate cuts. With few major economic releases or Fed speakers scheduled, trading may remain subdued.
Central Bank Watch: RBA and RBNZ in Focus
The Reserve Bank of Australia (RBA) is expected to cut rates by 25 basis points to 3.60% on Tuesday, marking its third easing this cycle. Markets anticipate further reductions to 2.85%-3.10%. New Zealand’s central bank, meeting Wednesday, is likely to hold rates at 3.25% after aggressive cuts over the past year.
Oil Prices Drop as OPEC+ Boosts Supply
Crude futures extended losses after OPEC+ agreed to increase output by 548,000 barrels per day in August—more than expected—with a similar hike possible in September. Analysts interpreted the move as an effort to pressure high-cost producers, particularly U.S. shale firms.
“OPEC+ is targeting Brent around $60-65/barrel to curb non-OPEC supply growth,” said CBA analyst Vivek Dhar. Brent crude fell 0.4% to $68.01, while U.S. WTI dropped 1.1% to $65.28.
Gold Holds Gains Amid Dollar Weakness
Spot gold slipped 0.3% to $3,324/oz but retained most of last week’s 2% advance as the dollar softened.
Outlook
With trade tensions simmering and central banks in focus, markets remain vulnerable to sudden policy shifts. The OPEC+ supply hike adds another layer of volatility, particularly for energy-sensitive assets. Investors will watch for clarity on tariffs and Fed policy in the days ahead.