North America News
Major Indices Drop as Tariff Fears Weigh on Markets
US stocks closed lower Monday after President Trump announced sweeping tariff hikes set for August 1. Letters were sent to Japan, South Korea, Malaysia, Kazakhstan, South Africa, Laos, and Myanmar threatening higher tariffs if deals aren’t reached. Rates include 25% on Japan, South Korea, Malaysia, Kazakhstan; 30% on South Africa; and 40% on Laos and Myanmar.
The Dow fell 422 points (-0.9%) to 44,406. The S&P 500 lost 49 points (-0.79%) to 6,230. The Nasdaq dropped 189 points (-0.92%) to 20,413. Small caps underperformed, with the Russell 2000 down 1.55% at 2,214.
Big decliners: Tesla -6.8% (after Musk announced a new political party and Trump’s tariff threat against South Africa), Arm -5.3%, Stellantis -5.0%, First Solar -4.3%, GameStop -4.2%.
Notable gainers: Roblox +4.0%, SoFi +3.7%, Palantir +3.5%, DoorDash +3.4%, Uber +3.3%.
US Employment Trends Index Inches Up in June
The Conference Board’s Employment Trends Index rose to 107.83 in June, up from a revised 107.49 in May. Despite the increase, the index continues to reflect a choppy labor market picture, with recent conflicting signals from ADP, ISM, and nonfarm payrolls. The downtrend appears to have stabilized for now.
US to Impose 25% Tariff on All Japanese Goods from August 1
The US announced a 25% tariff on all Japanese imports starting August 1, citing trade imbalances and national security concerns. Goods routed through third countries will not escape the duty. Japanese firms manufacturing in the US are exempt, and Washington offers fast-track approvals for new domestic investments. The US signaled openness to adjusting tariffs if Japan improves market access for US products.
Bessent: We are going to have several trade announcements in the next 48 hours
- US Treasury Secretary Bessent:
- Vietnam tariff is 20% overall
- I got a lot of new offers last night
- Tariff deals that will come out will be slightly higher than current CBO scoring
- Tariffs will substantially decrease the deficit
- Asked about the softening US dollar, says other currencies are strengthening
- Will meet with Chinese counterpart in the next few weeks
- There are things for us to do together if China wants to do it beyond trade
Trump Set to Dispatch Tariff Notices and Trade Deals at Noon on July 7
Donald Trump announced on his social platform that the United States will begin issuing tariff letters and trade agreements to multiple countries starting at 12:00 p.m. Eastern on Monday, July 7. In his statement, Trump added that any country supporting BRICS’ “anti-American policies” will face an extra 10% tariff without exception.
Commerce Secretary Howard Lutnick confirmed these new tariffs will kick in on August 1, noting that Trump is finalizing exact rates and terms.
More Tariff Letters Incoming; Implementation Starts August 1
On Sunday, Trump revealed that some trade deals have already been finalized. Between 12 and 15 letters are expected to go out on Monday, each warning foreign governments about higher tariff rates. Lutnick emphasized that the new tariffs will officially start on August 1, as Trump wraps up negotiations on the final figures.
Bessent Warns of Higher Tariffs If No Agreements Are Reached
Treasury Secretary Scott Bessent stated on Sunday that if no trade deals are secured, tariffs will revert to the elevated rates that were in place on April 2, effective August 1. These notices will be formally sent to trading partners this week.
Bessent mentioned that the U.S. is close to wrapping up several agreements, with major announcements expected before July 9—the deadline when suspended tariffs are set to resume. Additionally, around 100 smaller countries that haven’t actively negotiated will receive fixed tariff assignments.
Canada’s New Oil Pipeline to BC Coast “Highly Likely,” Says PM Carney
Prime Minister Mark Carney said a new oil pipeline leading to British Columbia’s coast is very likely to be deemed a nationally significant project. Speaking at the Calgary Stampede, Carney highlighted the economic potential and Canada’s resource strength.
He noted that while he supports the pipeline, it should come from private sector proposals rather than direct government orders. Carney also voiced support for a proposed C$16.5 billion carbon capture initiative in Alberta’s oil sands.
Commodities News
Gold Holds Near $3,333 as Tariff Announcements Fuel Uncertainty
Gold edged down 0.06% to $3,333 on Monday as Trump’s tariff threats boosted the US dollar and Treasury yields, pressuring bullion. The US Dollar Index rose to 97.55, while 10-year yields climbed to 4.39%.
Last week’s strong US jobs report lowered the odds of imminent Fed rate cuts. Meanwhile, China increased its gold reserves for an eighth month, reinforcing demand for gold as a hedge. Traders now await Fed meeting minutes and jobless claims for further cues.
Silver Drops as Yields Rise and Dollar Strengthens
Silver prices slid toward $36.00 support, losing about 1.6% intraday. A stronger US dollar, firmer Treasury yields, and improving global growth sentiment have weighed on precious metals. Traders have shifted away from safe-haven assets as US trade talks progress and global industrial data, including stronger German output and China’s solid FX reserves, support risk appetite.
Oil Prices Rally to Post-Ceasefire High Despite OPEC+ Boost
WTI crude reversed early losses to climb over $2.20, hitting $67.91 — the highest level since the June Iran ceasefire. OPEC+ surprised markets with an additional 548,000 barrels per day increase for August and hinted at another similar bump in September. Despite more barrels coming online, oil remains down just $6 on the year, aided by a weaker dollar.
China Adds to Gold Reserves for Eighth Straight Month
China’s central bank continues its steady gold accumulation. As of end-June, the People’s Bank of China held 73.90 million ounces of gold, up from 73.83 million in May.
In value terms, reserves increased to $242.93 billion from $241.99 billion month-on-month, reinforcing Beijing’s long-term de-dollarization strategy.
Crude Prices Hold Ground Despite Output Increase
Oil markets shrugged off OPEC+’s decision to raise output by 548,000 barrels per day in August, a larger-than-expected move. While prices dipped initially, the market quickly stabilized, suggesting attention has shifted to broader macro drivers like Fed rate cuts, Trump’s new trade proposals, and improving global growth forecasts.
On the technical side, prices are holding above $64, with $72 seen as resistance and $60 as the next key downside level. Traders expect another 550,000 bpd hike for September to finalize the rollback of 2.17 million bpd in voluntary cuts — including a 300,000 bpd quota increase for the UAE.
Goldman Sachs Sticks to $59 Brent Forecast for Q4 2025
Goldman Sachs maintained its Brent crude forecast at $59 per barrel for the fourth quarter of 2025 and at $56 for 2026. The bank expects eight OPEC+ members to raise production quotas by 550,000 barrels per day in September, completing the rollback of 2.2 million barrels per day in voluntary cuts.
OPEC+ had already agreed to increase output by 548,000 barrels per day in August. Goldman believes this reflects the group’s move to stabilize market share, control spare capacity, and keep U.S. shale growth restrained. Production is forecast to rise by 1.67 million barrels per day from March to September, with Saudi Arabia leading over 60% of that growth.
The bank foresees global oil demand increasing by 600,000 barrels per day in 2025 and by 1 million barrels per day in 2026, driven by strong Chinese demand and steady global economic growth. Risks include possible production reversals and a 30% chance of a U.S. recession in 2026.
OPEC+ to Boost August Output by 548,000 Barrels Daily
OPEC+ announced a production hike of 548,000 barrels per day for August, outpacing the previously expected increase of 411,000. The alliance pointed to strong global economic conditions and low inventories as reasons for the adjustment.
Sources inside the cartel indicated they will revisit September’s output targets at their next meeting on August 3.
Europe News
Eurozone Investor Confidence Hits 3-Year High
The Sentix investor sentiment index for the euro area jumped to 4.5 in July, far exceeding the expected 1.1. That’s the highest level since early 2022.
Germany led the improvement, with its national index climbing to -0.4, the best reading in over three years. The region-wide current situation index also improved for the third straight month to -7.3, though it remains in negative territory.
Eurozone Retail Sales Fall in May, Miss Momentum
Retail sales in the eurozone dropped 0.7% month-on-month in May, matching forecasts but signaling weak consumer activity. April’s number was revised up to +0.3% from +0.1%.
Breakdown of the declines:
- Food, drink, tobacco: -0.7%
- Non-food items: -0.6%
- Automotive fuel: -1.3%
Despite the pullback, annual retail sales were still up 1.8% compared to May 2024.
German Industrial Output Rebounds in May, Beats Forecasts
Germany’s industrial production jumped by 1.2% month-on-month in May, easily beating expectations for flat growth. The previous figure was revised down from -1.4% to -1.6%, highlighting the strength of the rebound.
However, the gains were uneven. Output from energy-intensive sectors fell 1.8%, acting as a drag on the overall numbers. Without those industries, industrial production rose by 1.4% — a more accurate picture of underlying momentum.
UK House Prices Flat in June, Market Shows Resilience
The Halifax House Price Index held steady in June, with 0.0% month-on-month change, matching forecasts. May’s figure was revised slightly to -0.3% from -0.4%.
The average property price now stands at £296,665, barely changed from May’s £296,782. Year-on-year, prices rose 2.5%. Halifax noted renewed buyer activity as mortgage approvals and transactions picked up following a post-stamp duty slowdown. Rising wages and stabilized interest rates are restoring buyer confidence.
SNB Sight Deposits Dip Slightly
Switzerland’s total sight deposits dropped to CHF 459.8 billion for the week ending July 4, down from CHF 460.7 billion previously.
Domestic sight deposits came in at CHF 424.4 billion, a decline from CHF 425.8 billion the week before, signaling a minor tightening in liquidity.
EU looking into deal to offset US car exports against imports – report
- Report on EU trade
Reuters is citing two EU sources on some details:
- EU looking into a possible deal on cars to offset US car exports against imports
- EU may secure baseline tariff exemptions for aircraft and spirits
- Exemptions would remove 10% US tariff
UBS Bets on Surprise ECB Rate Cut in July
In a contrarian call, UBS predicts the European Central Bank will cut rates at its July 24 meeting. However, the bank added a disclaimer: if US-EU trade talks end amicably, it will drop the forecast.
This goes against current market pricing, which reflects a 90% chance of no change, especially after the ECB signaled a summer pause in its June guidance.
ECB’s Nagel: German fiscal policy impulses to outweigh effect of tariffs
- Remarks from the ECB policymaker
- German fiscal policy impulses to outweigh effect of tariffs.
- See ground for cautious optimism as we look to the future.
- Looking ahead, we see promising signs of recovery in Germany.
- Slight annual increase possible this year for German growth.
- Calls for deeper intergration of European financial markets.
ECB’s Makhlouf said that the euro is not yet ready to replace the US dollar
- Irish central bank chief and ECB governing council member Gabriel Makhlouf
- said that while dollar dominance may decline over time, Europe still lacks a unified fiscal structure and a safe asset comparable to US Treasuries;
- said recent euro gains against the dollar are more reflective of investor concerns over U.S. governance than a fundamental shift in reserve currency dynamics;
- urged the EU to seize the current climate of global uncertainty to strengthen its internal market, improve collective financing, and enhance its strategic autonomy.
Asia-Pacific & World News
China Rejects Tariffs as Diplomatic Leverage
China’s Foreign Ministry reiterated its opposition to the use of tariffs as a coercive tool in international diplomacy. Officials warned that tariff wars benefit no one, labeling such moves counterproductive and destabilizing.
The comments signal Beijing’s ongoing resistance to trade threats amid renewed tensions with Western economies.
China Reroutes Exports Through Southeast Asia to Bypass US Tariffs
According to the Financial Times, Chinese exporters are increasingly channeling goods through Southeast Asia to dodge U.S. tariffs. Direct shipments from China to the U.S. fell 43% in May, while exports to Southeast Asia jumped 15% and to the EU rose 12%.
Despite the drop in direct exports to the U.S., China’s overall exports grew 4.8% that month. In response, Washington’s trade agreement with Vietnam now includes a 40% tariff on trans-shipped goods to curb this practice.
China Slaps Restrictions on EU Medical Device Purchases
China has imposed new restrictions on government procurement of European Union medical devices valued over 45 million yuan ($6.3 million). Imports of devices containing more than 50% EU-made parts are also affected.
This move comes after the EU barred Chinese firms from bidding on its €60 billion annual public tenders for medical devices, citing non-reciprocal access. Beijing criticized the EU’s approach as protectionist and said retaliation was necessary.
However, Chinese subsidiaries of European firms will be exempt from these restrictions. China and the EU are set to meet later this month for a leaders’ summit.
China Lays Out 14-Point Plan to Grow Services and Boost Rural Areas
On Monday, China unveiled a blueprint containing 14 measures to upgrade its domestic service industry and revitalize rural regions. Details beyond the initial announcement aired on CCTV have yet to be released.
Tesla Struggles in China as Local EV Rivals Gain Ground
The Wall Street Journal reported that Tesla’s share of China’s electric vehicle market is slipping as domestic competitors introduce models tailored to local tastes. Chinese automakers now offer vehicles with perks like multiple entertainment screens, fridges, and selfie cameras, features absent in Tesla’s standard lineup.
Meanwhile, Elon Musk’s image as a Washington–Beijing intermediary has weakened, particularly as ties with Trump have frayed. Chinese leaders in EV technology, like BYD and CATL, are also rolling out fast-charging systems capable of recharging cars in just five minutes, intensifying the challenge for Tesla.
PBOC sets USD/ CNY reference rate for today at 7.1506 (vs. estimate at 7.1626)
- PBOC CNY reference rate setting for the trading session ahead.
PBOC injected 197.3bn yuan via 7-day reverse repos at 1.40%
- 422.3bn yuan mature today
- net drain 225bn yuan
RBA Expected to Cut Rates, But Analysts See Possible Hold
While markets broadly expect the Reserve Bank of Australia to cut its cash rate on July 8, not everyone agrees. Bank of America analysts argue the RBA might hold steady, citing persistent inflation pressures.
The trimmed mean inflation gauge, a key measure, is projected to stay above the 2.5% target in upcoming data. Meanwhile, unemployment remains below the RBA’s 4.2% estimate, suggesting ongoing labor market tightness. High unit labor costs and weak productivity further support a cautious stance. Altogether, these factors make the case for a rate cut less certain.
Australian Job Ads Hit 12-Month Peak, Highlighting Market Strength
Australian job advertisements rose 1.8% in June, the highest level in a year, according to ANZ and Indeed data. Private-sector listings led with a 3.2% surge, signaling strong labor demand.
Job ads now sit only 0.4% below last year’s figures and are 16.1% above pre-pandemic levels. ANZ noted that tight labor conditions support a shallow rate-cut cycle by the Reserve Bank of Australia. The central bank is expected to cut its cash rate to 3.6% on Tuesday, after previous cuts in February and May. Despite global risks, including U.S. tariffs, Australia’s jobless rate remains low at 4.1%, though it’s projected to edge up to 4.3% in coming months.
New Zealand Shadow Board Urges RBNZ to Keep Rates Unchanged
Ahead of the July 9 policy meeting, New Zealand’s economic research institute (NZIER) ‘shadow board’ advised the Reserve Bank of New Zealand to maintain its Official Cash Rate at 3.25%. Despite a sluggish economy, board members cited rising annual inflation and global uncertainties as reasons to avoid immediate cuts.
Most see the OCR settling between 2.75% and 3.25% over the next year, hinting that the easing cycle could soon end. While a few members supported further reductions to support recovery, the majority argued that inflation risks outweigh the benefits of more cuts.
Japan’s Akazawa and US Commerce Secretary Intensify Tariff Talks
Japan’s chief trade negotiator Ryosei Akazawa held two intensive phone discussions with U.S. Commerce Secretary Howard Lutnick—one on Thursday and another on Saturday. The talks took place ahead of the July 9 expiration of a pause on a potential 24% reciprocal tariff on Japanese goods. Trump hinted that the final tariff rate could be even higher.
Prime Minister Shigeru Ishiba insisted Japan would not compromise on its national interests, calling the negotiations “extremely vigorous” and ongoing right up to the deadline. Japan reaffirmed its intention to coordinate closely with the U.S. as talks continue.
Japan Sees Sharpest Drop in Real Wages in Almost Two Years
Japan’s real wages fell 2.9% year-on-year in May, marking the steepest decline in nearly two years and the fifth straight monthly decrease when adjusted for inflation. Nominal wages rose only 1.0%—well below the 2.4% forecast and down from April’s 2.0% gain—marking the slowest growth since March 2024.
The slump was primarily driven by an 18.7% plunge in bonus payments. Base pay and overtime earnings also slowed during the month.
Crypto Market Pulse
Bitcoin Slips While Ethereum, XRP Hold Firm Amid Dollar Rebound
Bitcoin traded below $109,000 on Monday, unable to retest its recent $110,530 high as the US dollar strengthened. Ethereum held near $2,568, supported by solid technicals and a potential breakout above $2,600. XRP hovered around $2.27, with bulls targeting $2.33 and potentially $2.47.
Stronger dollar sentiment follows Trump’s renewed tariff threats and concerns over US debt sustainability. Ethereum’s MACD buy signal and RSI near 55 suggest room to advance. XRP remains supported above key moving averages, keeping the near-term bias bullish.
Meme Coins Pepe and SPX6900 Eye Further Breakouts
Pepe (PEPE) and SPX6900 (SPX) continue higher, fueled by Bitcoin’s new record weekly close above $109,000. Pepe broke a descending triangle resistance at $0.00001037 and may target $0.00001196 next. SPX also extends gains, signaling possible larger upside. Rising Open Interest and funding rates point to bullish momentum.
Elon Musk’s New ‘America Party’ to Accept Bitcoin
Elon Musk confirmed his America Party will embrace Bitcoin, calling fiat “hopeless.” Tesla currently holds over 11,500 BTC, worth around $1.26 billion. Musk’s crypto ties stretch back to Tesla’s $1.5 billion BTC purchase in 2021. While once skeptical, Musk now champions Bitcoin and is encouraged to integrate it further into Tesla and SpaceX operations.
XRP Continues Rally on Institutional Inflows
XRP is up for a second straight day, hovering around $2.28, buoyed by $10.6 million in weekly inflows into XRP-related investment products. This pushes year-to-date inflows to $335 million and total assets under management to $1.4 billion.
Futures market interest is also on the rise. Open Interest has grown 25% to $4.69 billion, the highest since May 30, reflecting growing institutional demand and renewed risk appetite in crypto markets.
Trump Meme Coin Holds Support as Tariff Delay Offers Breathing Room
The Official Trump (TRUMP) meme coin continues consolidating above $8.43, trading near $8.62 as the U.S. unofficially extends its tariff deadline to August 1.
With the formal 90-day pause ending this week, the extension gives countries like the EU more time to strike deals. Commerce Secretary Howard Lutnick confirmed the delay, saying Trump is still setting final terms.
Meanwhile, Open Interest in TRUMP futures remains firm at $357 million, although well below its $800 million peak earlier this year.
Toncoin Falls After UAE Denies Golden Visa Offer
Toncoin (TON) gave back weekend gains on Monday, trading down from $2.83 after briefly touching $3.00. The drop followed denials from UAE authorities, who rejected claims that staking $100,000 worth of TON could earn investors a 10-year golden visa.
The UAE’s ICP, SCA, and VARA issued a joint statement saying no such partnership exists with the Toncoin Foundation. The market responded quickly, with bearish sentiment creeping into the derivatives space and traders rethinking TON’s real-world utility narrative.
The Day’s Takeaway
United States
US equity markets fell sharply as tariff fears rattled investors. President Trump announced plans to raise tariffs on Japan, South Korea, Malaysia, Kazakhstan, South Africa, Laos, and Myanmar effective August 1 if trade deals aren’t finalized. The Dow dropped 0.9%, S&P 500 slid 0.79%, and Nasdaq lost 0.92%. Small caps were hit hardest, down 1.55%.
The Conference Board’s Employment Trends Index rose slightly to 107.83 in June, suggesting stabilization in the labor market despite conflicting recent data. Tesla shares tumbled 6.8% after Elon Musk revealed a new political party, prompting further criticism from Trump.
Canada
Canadian Prime Minister Mark Carney signaled strong support for a new oil pipeline to British Columbia’s coast, calling it “highly likely” to gain national significance status. Carney also backed a C$16.5 billion carbon capture project in Alberta.
Commodities
WTI crude climbed to $67.91 — the highest since the June Iran ceasefire — despite OPEC+ announcing an unexpected 548,000 bpd production hike for August and a potential repeat in September. Oil markets appear focused on strong global growth expectations and a weaker US dollar.
Gold held near $3,333, slightly down 0.06%, pressured by higher US yields and a stronger dollar. China added to its gold reserves for the eighth consecutive month, supporting long-term bullion demand. Silver slid toward $36.00, losing 1.6% intraday as rising yields and a firmer dollar weighed on precious metals.
Europe
Germany’s industrial production jumped 1.2% in May, beating expectations and reversing recent declines, although energy-intensive industries continued to struggle. Eurozone retail sales fell 0.7% in May but remained up 1.8% year-on-year. Sentix investor sentiment soared to a three-year high at 4.5, supported by Germany’s rebound.
The ECB is widely expected to hold rates later this month, though UBS made a contrarian call for a possible cut depending on trade negotiations.
Asia
Japan’s real wages fell 2.9% year-on-year in May, the largest drop in nearly two years. Nominal wage growth also slowed sharply due to a steep decline in bonuses. China reiterated its opposition to using tariffs as a coercive tool and announced a 14-point plan to boost its domestic services and rural economies. China’s foreign exchange reserves rose to $3.317 trillion in June.
Crypto
Bitcoin hovered below $109,000, failing to retest its recent highs as the US dollar rebounded. Ethereum held around $2,568, with technicals hinting at a possible breakout above $2,600. XRP traded near $2.27, with bulls targeting $2.33 and beyond. Meme coins Pepe and SPX6900 extended gains on strong technical setups, while Toncoin dropped after UAE officials denied the golden visa staking offer.
