📰 Market Report.
📉 Today is an important day for the stock markets, with the dollar reaching considerable levels of weakness, and today’s employment data, NFP, will undoubtedly determine the direction for the coming weeks. A weaker jobs report could increase the probability of a July Fed rate cut to around 70%.
📊 According to Reuters, the U.S. labor market is expected to have slowed further in June, with the unemployment rate edging up to over 3.5-year high of 4.3%. The anticipated moderation in job growth is likely to be insufficient to spur the Federal Reserve to resume interest rate cuts in July. Nonfarm payrolls are expected to have increased by 110,000 jobs in June, below the 3-month average gain of 135,000. The expected rise in the jobless rate to the highest level since October 2021 may encourage the Fed to resume policy easing in September.
💰 Investors are waiting for the passage of Trump’s massive $3.3 trillion tax and spending bill in Congress. Congressman Thomas Massie, the new political partner of Elon Musk, says he has enough votes to block President Trump’s ‘One Big Beautiful Bill’ in the House.
🇺🇸 President Trump announced that the U.S. has struck a trade deal with Vietnam, which includes a 20% tariff on Vietnamese imports to the U.S. In return, Vietnam will give the U.S. “total access” to its markets, allowing U.S. products to be sold in Vietnam at zero tariff. The new 20% tariff on Vietnamese goods replaces a previous 46% blanket tariff that was lowered to 10% during a 90-day pause, set to expire soon. The S&P 500 rose slightly on the news of the trade deal.
⚠️ However, the new trade deal between the US and Vietnam risks provoking retaliatory steps from China, as it includes a 40% tariff on goods deemed to be transshipped through Vietnam. China, as Vietnam’s largest trading partner and a key source of inputs for domestic production, may respond with retaliatory measures, which could have an outsized impact on Vietnam’s economy. The deal does not provide a clear path for addressing concerns about sectoral tariffs, which are central to negotiations for many of the US’s major trading partners, including Japan, South Korea, and the EU.
🇪🇺 In the case of Europe, EU trade chief Maros Sefcovic plans to meet with US Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer in Washington to negotiate a deal before a July 9 deadline, which could lead to a 50% increase in tariffs on EU exports to the US if no agreement is reached.
🇯🇵 Regarding the possible agreement with Japan: Japan is taking a firm stance to protect its national interests in the trade negotiations with the U.S.
🛡️ Japanese Prime Minister Shigeru Ishiba said Japan is determined to protect its national interests as trade negotiations with the U.S. struggle and President Trump threatens even higher tariff rates. Ishiba stated that Japan is different from other countries as it is the largest investor in the U.S., creating jobs, and its focus is on investment rather than tariffs. Japan has yet to secure a trade deal after nearly three months of negotiations, as it tries to get the U.S. to exempt its automakers from the 25% tariff on the automobile industry.
🔧 Ishiba said Japan will continue to create jobs in the U.S. while protecting its domestic industries, and if auto sales to the U.S. drop, it will boost domestic demand and diversify export destinations.
🔓 The U.S. has lifted restrictions on exports to China for chip design software developers and ethane producers, a sign of de-escalating U.S.-China trade tensions. The U.S. also rescinded a restrictive licensing requirement on exports of ethane to China that was imposed in late May and June. These restrictions were part of countermeasures imposed by the Trump administration in response to China’s export suspension of rare earths and related magnets earlier this year.
🤝 After talks, the U.S. and China have confirmed a framework under which China will review export applications for controlled items, while the U.S. will cancel corresponding restrictive measures.
🧲 Europe also wants rare earths. The EU’s top diplomat, Kaja Kallas, urged China’s Foreign Minister Wang Yi to end restrictions on rare earths exports, which pose significant risks to European companies and endanger global supply chains. Kallas called on China to provide concrete solutions to rebalance the economic relationship, level the playing field, and improve reciprocity in market access. Kallas highlighted the serious threat that Chinese companies’ support for Russia’s war in Ukraine poses to European security, and called on China to cease all material support for Russia’s military.
📱 The European Commission President Ursula von der Leyen lost a court fight against attempts to force her to disclose secret text messages with Pfizer Inc.’s CEO as the EU was negotiating massive vaccine deals during the COVID-19 pandemic.
⚖️ Judges at the EU’s General Court ruled that the Commission “has not given a plausible explanation to justify the non-possession” of the text messages, and did not sufficiently clarify whether the messages were deleted or the president’s phone was replaced.
📰 The New York Times had asked the court to force the disclosure of the message exchange between von der Leyen and Pfizer’s CEO, which could show how a costly vaccine deal was struck in 2021. The European Commission argued that while text messages were exchanged, they were not considered important records and were not kept. The ruling is an embarrassment for von der Leyen.
🚗 Tesla reported around 384,000 vehicle deliveries in the second quarter of 2025, a 14% decline from a year ago and the second straight quarterly drop. Wall Street analysts were expecting Tesla to report deliveries of around 387,000 vehicles. Certain aspects of the Trump administration’s tax-and-spending package could harm Tesla’s solar and battery business, and lower EV sales by around 100,000 vehicles per year by 2035. Tesla’s stock rose nearly 5% on the delivery numbers, which were better than some analysts had expected, though the company’s shares are still down 22% for the year.
🗓️ Tesla will discuss its full financial results for the second quarter with investors on July 23, after markets close.
📈 Market View:
📊 Several factors are keeping the markets positive in the United States: the anticipation of weak labour market data, which could increase pressure for a rate cut, and the new trade agreement with Vietnam. The Mini S&P 500 futures are rising above 6,280 points, while the Nasdaq 100 futures are above 22,870 points.
💵 The dollar continues its sharp decline, as we indicated last week would happen, with the dollar index now trading below 97, at 96.80 at the moment. Our estimates suggest it will soon stabilise in the range of 96 to 96.50. This situation is causing the EUR/USD pair to rise uncontrollably, which has alarmed the ECB authorities, as we mentioned yesterday.
📉 Equities in Europe improved during yesterday’s session but made little progress and remain below the levels seen at the start of the week. The DAX 40 futures stand at 23,980 points, while the Euro Stoxx 50 futures are at 5,345 points.
🛢️ Meanwhile, the crude oil market remains static and heavily intervened. Brent crude remains around the $68 level, currently trading at $67.90.
🥇 Gold has been strengthening since last week, with futures trading above $3,365 per ounce, likely driven by the weakness of the dollar.
₿ Lastly, Bitcoin has surged in recent hours and is likely to reach the highs from the beginning of the month soon, approaching the $110,275 range. It is currently trading at $109,500.
