Macro Wrap

The DJIA and the S&P500 fell 1% and 0.4% respectively, while the Nasdaq Composite Index rose 0.2%. The Eurostoxx 50 fell 0.3%. The Dollar Index rose 0.6% to 98.62 and EUR-USD fell 60 pips to 1.1600. The US 2Y yield rose 4bp to 3.94% and the 10Y yield gained 5bp to 4.48%. The German 10Y yield fell 2bp to 2.71% while the UK 10Y yield rose 3bp to 4.63%. Brent crude oil prices fell 0.7% to USD68.71 and gold dropped 0.6% to USD3,325

US retail inflation on a month-on-month basis, rose 0.3% in June, up from 0.1% in May. Year-on year, CPI climbed to 2.7%, slightly above market expectations. The increase was largely driven by tariff-sensitive goods, with notable gains in household furnishings (+1.0% MoM), appliances (+1.9%), audio-visual equipment (+1.1%), and apparel (+0.4%). Core CPI rose 2.9%, in line with estimates. Food, transportation services, and used car prices increased, while energy costs fell less. Gasoline and fuel oil prices continued to decrease, and inflation for shelter and new vehicles slightly declined. Sentimentally positive for USD.

German investor expectations index rose to 52.7 in Jul from 47.5 in Jun, reflecting resilience of the German economy in the face of US tariff threats as the government ramps up spending. sentimentally positive for Euro.

Economic calendar – UK Inflation Rate, EU Balance of Trade, US PPI, US Industrial Production