Macro Wrap

The DJIA, the S&P500, and the Nasdaq Composite Index rose 0.5%, 0.6%, and 0.9% respectively. The Eurostoxx 50 jumped 1.4%. The Dollar Index was unchanged at 97.56 and EUR-USD was also stable at 1.1720. The US 2Y yield fell 5bp to 3.84% and the 10Y yield fell 7bp to 4.33%. The 20Y and 30Y yields both fell 6bp to 4.86% and 4.87% respectively. The German 10Y yield dipped 1bp to 2.67% and the UK 10Y yield fell 2bp to 4.61%. Brent crude oil prices edged up 0.1% to USD70.19 and gold rose 0.4% to USD3,314.

US President Trump set new tariffs on seven countries, including 20% for the Philippines, 25% for Brunei and Moldova, and 30% for Algeria, Iraq, Libya, and Sri Lanka. Among the more important trading partners, the US is going to impose 50% tariff in Brazil. This is a sharp jump from the 10% set in April. US is expected to begin levying a 50% tariff on copper imports from Aug. 1, confirming a move that will hurt American producers of everything from automobiles to appliances. sentimentally negative for industrial commodities.

FOMC Minutes: Most Fed officials see a rate cut as likely this year, citing temporary inflation pressures and potential economic softening, Some support an early cut, while others prefer no change in 2025. The Fed funds futures are pricing in no change in July, a total of 19bp cut by September, 35bp by October, and 53bp by year-end. Sentimentally negative for USD.

Economic data watch – US Initial Jobless Claims, US Fed Speech.