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After months of negotiations, the two blocs finally settled on an initial trade framework late on Sunday night. The salient point of the agreement is that EU goods will now face a blanket 15% tariff when exported to the US. As usual, both sides are claiming victory over the outcome, but the fact is that the 15% tariff is far higher than anything the EU has faced before. With that said, the figure is certainly more appealing than the 30% tariff that the EU would have faced had a deal not been established. As EU head Ursula von der Leyen herself admitted, the trade deal was “the best we could get”. The figure also matches the 15% tariff agreed upon as part of last week’s trade deal with Japan, setting a strong precedent for future trade agreements. Thursday marks the end of July, which means that countries around the world only have a few days left to lock in trade deals before the August tariff deadline comes into effect. So far, the UK, the EU, Japan and a number of South-East Asian countries have been able to secure their positions, but negotiations with some of America’s largest trading partners remain in limbo. All three major US stock indices closed in the green last Friday, with the S&P 500 and Nasdaq Composite both hitting new record highs. The S&P 500 enjoyed a particularly impressive five-day streak by establishing a new record high every single day of the week. Futures contracts are trading higher still in light of the new deal trade with the EU. Where to begin? The August deadline on Friday may provide some unexpected drama as countries scramble to escape the incoming tariffs, but there are enough planned events to keep traders very busy this week. Tuesday offers the first glimpse into the US labour market in the form of the latest JOLT survey. Wednesday follows along in the same vein with the ADP employment change, while providing the latest GDP figures from the EU and the US. Two interest rate decisions are also scheduled for Wednesday, firstly from the Bank of Canada, then later on from the Federal Reserve. Neither is expected to enact a rate cut this time round, but the accompanying commentary may provide something for traders chew on. On Thursday morning, the Band of Japan is expected to hold rates steady on the Yen, while later in the day markets will have to come to terms with the latest PCE Price Index, which is forecast to show a slight uptick in US inflation. As if that were not enough, Non-Farm Payrolls hit the newswires on Friday, with 102k new jobs expected and a 4.2% unemployment rate. On top of the above, earnings season steps up a notch this week with Visa (V) reporting on Tuesday, Microsoft (MSFT) and META on Wednesday, then Apple (AAPL), Amazon (AMZN) and Mastercard (MA) on Thursday. #Tariff #EU #SPX
In a rare turn of events, gold, silver and copper are all simultaneously gunning for record highs. Gold came very close to achieving a new all-time high close yesterday, but ultimately had to settle for $3,431 per ounce. Silver meanwhile achieved yet another yearly high by reaching $39.25 last night. Last but not least, copper prices rose over 2% on Tuesday to come within touching distance of $5.70 per pound. Copper imports into the US are facing the looming threat of a 50% tariff, which has pushed prices up dramatically since being announced by president Trump earlier in the month. A number of vessels carrying copper are currently in a race to reach US ports before the new duties come into effect on the first of August. The rush to unload the precious cargo has forced shipping companies to employ some creative measures, such as shipping to Hawaii as opposed to the intended destination in the contiguous states, as well as paying a premium to skip queues upon arrival in port. Tariffs in general are once again a driving force behind market sentiment. The announcement of a trade deal between the US and Japan pushed both nations’ stock markets higher yesterday. The Nikkei 225 gained 3.2% over the course of the day, tipping the index over 41,000 points. In the US meanwhile, the S&P 500 edged another all-time high close last night, already its second of the week. Earnings reports from Alphabet (GOOG) and Tesla (TSLA) could stir things up later today , as expectations from investors are absolutely sky-high. Anything less than great news could potentially put pressure on tech stocks. General Motors (GM) tanked 8% yesterday after disappointing profit figures while Lockheed Martin (LM) crashed over 10% on similarly dismal quarterly results. #Metals #SPX #NI225
Crypto week may be over, but the legislation signed into US law last Friday has far-reaching consequences. The Genius Act allows different financial institutions to issue their own stablecoins and lays out the regulatory framework necessary to do so. Put simply, the act defines what is allowed and what is not, sweeping away the murky grey area that has traditionally surrounded stablecoins. The new legislation will now allow crypto companies to push forward with developments that in some cases had been put on hold for years. Crypto markets are in full swing and while Bitcoin has gone off the boil since reaching the $120k mark, the broader alt market has been more than happy to pick up the slack. Bitcoin dominance continued to plummet over the weekend, while cryptocurrencies up and down the rankings exhibited double-digit gains, in some cases hitting record highs of their own. President Trump’s tariff deadline is approaching by the hour and delegations from across the globe are scrambling to hash out trade deals. If such agreements are not ironed out by the first of August, trading partners will be slapped with sweeping, broad-stroke tariffs reaching as high as 40% for some countries. The big question is of course the European Union, which is facing 30% duties on exports to the US unless a deal is hammered out over the next ten days. Negotiations with Japan became a lot more complicated yesterday after the ruling coalition lost control of the upper house. Japanese markets are closed today so the election result has not yet had a chance to impact the Nikkei 225 index. Very little on the economic calendar over the coming week. Fed Chair Powell is set to speak tomorrow although his words are unlikely to greatly affect market sentiment. Rumours of Trump potentially firing Powell are once again doing the rounds but as usual there does not seem to be much substance to them. The biggest news from the Fed is that governor Christopher Waller is now openly calling for a rate cut at the end of the month, going so far as to say that current rates should be 3% instead of the current 4.5%. Manufacturing and services PMIs dominate Thursday’s proceedings, although the European Central Bank could surprise currency traders by adjusting rates on the Euro. Expectations are currently firmly in favour of a rate hold at 2%. A few heavy hitters on the earnings calendar this week: Coca-Cola (KO) on Tuesday; Alphabet (GOOG), Tesla (TSLA) and IBM on Wednesday. #Crypto #NI225 #Earnings
After suffering a series of setbacks earlier in the week, all three crypto bills finally passed through the House of Representatives yesterday. The Genius Act, which focuses on the issuance of stablecoins, now only awaits the signature of president Trump. The Clarity Act and Anti-CBDC Act meanwhile still have to face the scrutiny of the Senate. A collective sigh of relief swept through the crypto sphere following the successful vote, among developers and investors alike. While shares in Coinbase (COIN) and Robinhood (HOOD) obviously took the news very well, the bigger surge is currently unfolding in the wider cryptocurrency market. Bitcoin has been relatively stable in recent sessions, consolidating near record highs of $120k, but the real drama is currently unfolding in the alt market. Alt coins up and down the table have experienced staggering gains this week and some voices are already calling for “alt season”. Whether or not such calls are justified is up for debate, but the bigger picture is certainly more optimistic than it has been in a long time. Greater regulatory clarity can only be a good development for the beleaguered industry and the steps made this week have already prompted the likes of JPMorgan Chase, Citigroup and Bank of America to announce their intent to embrace stablecoins. US retail data published yesterday revealed a surprise increase in sales in June, while the latest unemployment figures uncovered an unexpected fall in jobless claims. The combined data points pushed the S&P 500 and Nasdaq Composite indices to new record highs. Both indices received a helping hand from tech giants Microsoft (MSFT) and Nvidia (NVDA), which both hit record highs of their own yesterday. Nvidia continued to push north of a $4 trillion valuation after the chipmaker received permission to sell its H20 chips to China. #Crypto #SPX #MSFT
Yesterday’s CPI report confirmed a slight increase in inflation last month in the US. The headline figure fell in line with predictions at 2.7% annually while core inflation, which excludes food and energy prices, came just below expectations at 2.9%. The response in US indices was mixed, with the Dow Jones and S&P dropping 1% and 0.4% respectively. Meanwhile, Nvidia (NVDA) and Microsoft (MSFT) both notched new record high closes yesterday, pushing the Nasdaq Composite index to a record high of its own. Nvidia stock surged 4% following news that the company had been given the green light to resume selling chips to China after having previously been banned from doing so. All three crypto-related bills failed to advance through the House of Representatives yesterday following procedural hurdles. While close, Tuesday’s vote was enough to block the Genius Act, Clarity Act and Anti-CBDC Act from moving forward. The result was an obvious blow to the crypto industry, but several hours later president Trump announced that the congressmen blocking the vote had agreed to change their position following a meeting in the Oval Office. A second vote could proceed as early as this morning. Crypto companies such as Coinbase (COIN) initially reacted poorly to the development but recouped much of the losses by the closing bell. Understandably, cryptocurrencies also took a sizeable hit but as with Coinbase, the sector still has hope that the new legislation will see the light of day sooner rather than later. Bitcoin pushed all the way to $123k on Monday but now rests at around $117k. Interestingly, the broader alt market suffered less than Bitcoin, resulting in a significant drop in Bitcoin dominance. Tuesday saw a number of major US banks report their second quarter earnings, marking the unofficial start of earnings season. JPMorgan (JPM), Wells Fargo (WFC), Citigroup (C) and Blackrock (BLK) are already out, while Bank of America (BAC), Goldman Sachs (GS) and Morgan Stanley (MS) are set to report later today, as are Johnson & Johnson (JNJ) and ASML Holding (ASML). Taiwan Semiconductor Manufacturing Company (TSMC) and Netflix (NFLX) are among the heavy hitters on Thursday, while American Express (AXP) and 3M (MMM) report on Friday. #NDX #Crypto #Earnings
Silver convincingly pushed north of $38 an ounce last Friday, matching prices not seen since 2011. The move has been a long time coming and follows in the footsteps of other precious metals. Gold has understandably had its fair share of headlines this year, haven risen 28% since January and breaking record after record long the way. Despite a lack of comparable coverage, silver is up 33% over the same time frame. Precious metals in general have been very active recently, with platinum establishing a fresh record high on Friday at $1,459 per ounce and copper achieving the same accolade the week prior. If anything, silver is still lagging behind and has a lot of catching up to do before it surpasses its historic high of $49.95 an ounce set all the way back in 1980. There are a number of factors pushing silver higher. Part of the reason is simple spillover from the broader metals market, resulting in a rotation into silver from copper and other metals. A larger reason is that fundamentally, the case for silver remains strong due to robust industrial demand coupled with tightening international supplies. Silver is useful for a number of applications including solar panels and electric vehicles – both growing sectors – while geopolitical uncertainty is having a negative effect on key mining regions. Supplies in the London vaults are supposedly dwindling. After reaching a record high last Friday, Bitcoin pushed higher still over the weekend and continued to break new ground this morning. Prices are now above $122,000 and the crypto sphere is currently undergoing a market-wide surge. As valuations rise, so too does the hype surrounding “crypto week” in the US, a week during which several crypto-adjacent bills will be discussed and voted on in Congress. The purpose of all of this is to foster greater regulatory clarity in the cryptocurrency sector, for developers and users alike. Very little to whet the appetite this week. Inflation is the only real item on the menu, with the US and Canada reporting on Tuesday, the UK publishing on Wednesday, Eurozone on Thursday and finally Japan to close out the week on Friday. The US inflation figures will no doubt have an influence on the next Fed rate call scheduled for the end of the month. A slight increase is expected from the 2.4% recorded in May, with analysts forecasting a year-over-year headline figure of 2.6% in June. Meanwhile, tariffs are back in the arena, as this weekend Trump threatened the EU and Mexico with a new batch of 30% duties, to take effect on the first of August. #Silver #Bitcoin #Inflation
