Macro Wrap

The DJIA, the S&P500, and the Nasdaq Composite Index fell 0.9%, 0.8%, and 0.9% respectively. The Eurostoxx 50 rose 1%. The Dollar Index rose 0.3% to 97.48 and EUR-USD fell 70 pips to 1.1710. The US 2Y yield gained 1.5bp to 3.895 and the 10Y yield rose 3bp to 4.38%.The German 10Y yield rose 4bp to 2.64% and the UK 10Y yield rose 3bp to 4.59%. Brent crude oil prices rose 1.9% to USD69.58 and gold was unchanged at USD3,337.

US President imposed additional tariffs of 25%-40% on 14 countries, including Japan and South Korea and said letters will be sent to range of countries in the coming days while he extended the deadline on reciprocal tariffs to 1 Aug, However, he emphasised that he remains open to negotiations and that the stated 1 August deadline is ‘not 100% firm, Trump also threatened an additional 10% tariffs on the ‘anti-American’ BRICS or any other countries that might align with them. Negative for risk assets, USD and positive for Gold.

OPEC+ oil-producing countries agreed to increase production by 548,000 barrels per day in August, further accelerating the pace of production increases. The cartel group had already accumulated production increases totalling 1.918 million barrels per day by August since April this year, leaving only 280,000 barrels per day remaining to fully exit the 2.2 million barrels per day production cut agreement. Negative for crude oil prices.

Economic data watch: US NFIB small business optimism survey for Jun (est. 98.6 from 98.8 in May) and NY Fed 1-year inflation expectation for Jun (est. 3.13 % y/y vs. 3.20% in May).