Market Report.
📊 In June, the U.S. economy saw a stronger-than-expected increase in jobs. Nonfarm payrolls rose by a seasonally adjusted 147,000, surpassing the anticipated 110,000 increase. Additionally, the unemployment rate dipped to 4.1%, down from 4.2% in May.
🏛️ Government jobs accounted for a significant portion of this growth, rising by 73,000 in June, which represents about half of the total nonfarm payroll increase for the month, according to CNBC’s Alex Harring. It’s important to note that the ADP report focuses solely on private payrolls, excluding government positions.
🇺🇸 Yesterday, the U.S. House of Representatives passed President Donald Trump’s massive tax-and-spending bill in a 218-214 vote, delivering him a major political victory. The bill, dubbed the “One Big Beautiful Bill”, contains trillions of dollars in tax cuts and increased immigration enforcement spending, offset by significant cuts to Medicaid and other social programs. Republicans argue the Medicaid changes will cut waste, fraud and abuse, while defending new work requirements for eligibility. The nonpartisan Congressional Budget Office estimates the bill could add $3.4 trillion to the national debt over the next decade, though the White House contests these estimates.
🤝 It should be remembered that this bill was the reason for the breakup between Trump and Elon Musk, who believes that the increase in spending it entails is a betrayal of Trump’s campaign promises to fix the economy.
🌬️ Shares of European wind power firms gained on Wednesday and continued to rise on Thursday after the U.S. Senate narrowly approved a heavily amended version of President Trump’s “big beautiful bill”. The amendments to the bill were seen as a relief for the renewable energy sector, which has been grappling with funding challenges, competition from China, and tariff uncertainty. The U.S. market is crucial for Europe’s largest renewable developers like RWE, EDPR, and Iberdrola, accounting for around 50% of installed renewable capacity for the former two, and 40% for the latter. Manufacturers like Vestas (which has 35% of its onshore wind backlog in the U.S.) and Siemens Energy are more vulnerable. The bill is still viewed as largely dismantling the core mechanisms supporting clean energy under the Biden administration’s Inflation Reduction Act.
🌍 As the U.S. and EU engage in trade negotiations, European businesses are actively working behind the scenes to avoid severe retaliation against President Donald Trump’s tariffs. They are concerned that such actions could escalate tensions and negatively impact European industries. Prominent companies like Mercedes-Benz and LVMH are advocating for a more conciliatory approach regarding U.S. tariffs and are pushing the EU to reach a swift agreement. Trump announced that his administration will begin sending letters to trading partners today, outlining unilateral tariff rates. Payments for these tariffs will be due by August 1.
💶 European Central Bank (ECB) officials highlighted potential dangers for exporters from gains in the euro, according to an account of their June meeting. The ECB saw uncertainty over trade already clouding the outlook for the euro zone’s economy, weighing particularly on investment. Higher tariffs and the recent appreciation of the euro were seen as weighing on exports. ECB Vice President Luis de Guindos said a move of the euro to $1.20 would be “complicated” for the ECB. The ECB’s latest projections see inflation cooling to 1.6% in 2026 before returning to 2% in 2027, with the economy perking up thanks to higher public spending in Germany.
🇨🇳 The Chinese government intends to cancel the second day of a planned two-day summit with European Union leaders later this month. The summit was originally scheduled for July 24-25, with European Commission President Ursula Von der Leyen and European Council President Antonio Costa planning to meet with Chinese President Xi Jinping and Premier Li Qiang. The meeting will now be just a one-day event in Beijing, as the second day in Hefei has been canceled at Beijing’s request.
⚡ The cancellation is the latest sign of tensions between Brussels and Beijing, driven by longstanding disagreements over issues like the war in Ukraine and Chinese industrial policy. Beijing is concerned the EU may agree to a trade deal with the US that could damage Chinese interests, particularly provisions around supply chain security and export controls.
🤖 European companies, including ASML Holding, Airbus, and Mistral AI, have called on the European Union to suspend the implementation of its landmark artificial intelligence regulation for two years. The companies, representing over 45 organizations, argue the regulation puts Europe’s AI ambitions at risk and is not “innovation-friendly.” They are requesting a postponement of the rules applying to general-purpose AI models and high-risk AI systems, which are set to come into force next month. The AI Act aims to prevent the worst abuses of AI technology, but companies argue the code of practice goes beyond the bounds of the regulation and creates onerous additional rules. Major tech companies like Meta and Alphabet have also criticized the code of practice, calling it “unworkable and infeasible” in its current form.
🏦 German Chancellor Friedrich Merz signaled that Germany will not give up its opposition to a joint European Union deposit insurance scheme, which large banks view as key to forging closer financial ties in the bloc. Merz stated clearly in a speech that there is “absolutely no reason to pool functioning liability systems at the member-state level within the EU”, indicating Germany’s firm stance on the issue.
👏 Merz’s comments were met with applause from an audience of German cooperative-bank executives, who have lobbied hard against a pooled deposit insurance system. The German cooperative and savings banks have their own systems for protecting deposits and are concerned they could be on the hook for losses at lenders in other countries under a joint scheme. Officials at the European Central Bank and larger commercial lenders argue that joint deposit protection would make the system stronger and is a precondition for cross-border mergers.
🚫 Merz has also spoken out against a potential takeover of Commerzbank AG by Italy’s UniCredit SpA, signaling Germany’s protectiveness of its domestic financial institutions.
📱 Apple’s iPhone sales in China rose 8% year-over-year in the second quarter of 2025, the first time the company has recorded growth in China since Q2 2023. Apple’s stock has fallen around 15% this year due to various headwinds. Former U.S. President Trump had threatened Apple with tariffs and urged CEO Tim Cook to manufacture iPhones in America, which experts say would be nearly impossible. In the second quarter, Huawei was the biggest smartphone player in China by market share, followed by Vivo, with Apple in third place.
Market View:
📉 Equity markets in the United States remain bullish despite strong labour market data, which would appear to delay the much-anticipated interest rate cuts. The Mini S&P 500 futures are trading above 6,300 points, while Nasdaq 100 futures managed to surpass 23,000 points a few hours ago, though they are currently experiencing slight pullbacks.
💵 The dollar appeared to strengthen during yesterday’s session following the positive US employment data. This suggested, once again, that there would be no reasons to lower interest rates. The US Dollar Index (DXY) briefly rose close to the 97.50 level, but selling pressure against the dollar quickly resumed, pushing it back below the 97-point mark. This initially caused declines in the EUR/USD pair, which dropped to 1.1715, but it has since recovered to levels near 1.1780.
📉 European futures are weak following yesterday’s gains. DAX 40 futures are currently trading at 23,920 points, while Euro Stoxx 50 futures stand at 5,325 points.
🛢️ The crude oil market has experienced some upward movement since Wednesday, with WTI crude rising by approximately 3% and currently trading at $66.75 per barrel.
🥇 Gold futures fell yesterday towards the $3,320 level, likely due to the strong US macroeconomic data, but they have since rebounded and are now trading bullishly above $3,350 per ounce.
💰 Bitcoin continues to advance upward, having exceeded $110,500 before retreating to its current level of $108,955.
