🛍️ Market Report.
😴 If you had grown accustomed to a slight calm in the markets over the last few days, it is time to wake up. Donald Trump remains in the White House, and here we have a few “gift” comments that always bring uncertainty and make Wall Street nervous.
🇺🇸 U.S. President Donald Trump has announced that the United States will impose a 35% tariff on imports from Canada, effective August 1, 2025. This is a significant increase from the current 25% tariff rate that has been in place for most Canadian goods since earlier this year. President Trump cited ongoing trade disputes, Canada’s retaliatory tariffs, and concerns over the flow of fentanyl into the U.S. as reasons for the increase.
📅 The announcement comes as the U.S. and Canada approach a self-imposed July 21 deadline to finalize a new trade agreement.
💱 The yen is experiencing a downward trend amid uncertainty surrounding the trade deal. In cross rates, the yen has declined for the seventh consecutive week against the euro and has reached a five-month low against the Australian dollar.
📜 Trump has publicly stated that the EU will “probably” receive such a letter within days, suggesting that talks are at a critical juncture and that the U.S. is prepared to escalate if no agreement is reached. EU officials describe the negotiations as complex and sensitive, with significant differences yet to be resolved.
💼 President Trump’s budget chief, Russell Vought, accused Federal Reserve Chairman Jerome Powell of “grossly mismanaging the Fed” and suggested he had misled Congress about the renovation of the central bank’s headquarters. Vought’s letter raises the question of whether Trump will seek to remove Powell from his position, though the Supreme Court has suggested Fed board members have special protection from being fired by the president.
🏗️ Vought criticized the renovation project, claiming it is way over budget at $2.5 billion, roughly $700 million over the initial cost, with a cost per square foot that is double the cost for renovating a typical historic federal building. He suggested the renovation project may be out of compliance with the approved plan and called on Powell to respond to questions within 7 business days.
🇫🇷 French Prime Minister Francois Bayrou called on the European Central Bank (ECB) to do more to support the economy, as France struggles to contain its budget deficit and address slowing growth. Bayrou said France faces similar challenges as the US, but without the strong dollar that allows the Federal Reserve to create money to fuel “optimism” in the economy. He said he “dreams” of the ECB feeling it has a role to play for growth in the EU, and suggested the ECB could cut interest rates to support economic activity.
📉 France’s growth outlook is deteriorating, with output expected to expand less than the euro area average this year. Sovereign borrowing costs have also increased relative to its European peers. Bayrou said for lenders to keep investing in France, there needs to be a positive gap between interest rates and expected growth.
💰 The European Securities and Markets Authority (ESMA) criticized crypto oversight in Malta for falling short in several areas related to an unidentified crypto provider it authorized. The review identified shortcomings in the approval process, including the provider’s client on-boarding processes, risks related to its use of Web3 services, and its ability to comply with anti-money laundering and sanctions requirements.
🇲🇹 ESMA said Malta’s regulator, the MFSA, did not adequately assess previous and ongoing enforcement actions against the provider when approving the license. According to Bloomberg, the unnamed provider is believed to be OKX, which received a “pre-authorization” from Malta in January 2025 and was later fined by Malta’s regulator for breaching anti-money laundering rules.
🛡️ Geopolitics:
⚓ Germany’s armed forces are facing delays to one of its biggest procurement projects – the acquisition of six new multipurpose combat ships from Dutch shipbuilder Damen Naval. The initial plan was for the first frigate to be delivered in 2028, with the final one by 2033. The delays cast a shadow over Europe’s efforts to bolster its military capabilities following Russia’s invasion of Ukraine, and amid US demands for Europeans to do more for their own defense. The German government is in contact with Dutch authorities to try to find solutions, but is unable to provide any information on timelines or potential cost increases at this time.
🇬🇧 British Prime Minister Keir Starmer and French President Emmanuel Macron announced tougher migration controls, including a “one in, one out” returns scheme where the UK would deport undocumented migrants arriving by small boats. The agreement aims to address high levels of immigration, including asylum seekers arriving by small boats across the Channel from France, in an effort to stem the rise of the populist Reform UK party. The two leaders also agreed to strengthen their defense cooperation, including ordering more Storm Shadow cruise missiles for use in Ukraine, and signed an agreement to deepen their nuclear cooperation.
🇷🇺 Trump said that he plans to make a “major statement” about Russia on Monday and expects the Senate to pass a bill that would tighten sanctions on the Kremlin. In an interview with NBC News, he remarked, “They’re going to pass a very major and very biting sanctions bill, but it’s up to the president whether or not he wants to implement it.”
💣 Little by little, the promises Donald Trump made during the campaign seem to be fading away, and the Trump administration is returning to the foreign policy of its predecessors Biden and Obama.
⚛️ Israel has determined that a portion of Iran’s underground stockpile of near-bomb-grade enriched uranium withstood recent American and Israeli assaults last month, and this material may be available to Iranian nuclear engineers, according to the New York Times.
📊 Market View:
📈 US futures maintain their optimism. The Mini S&P 500 futures remain above 6,300 points, close to all-time highs. Nasdaq 100 futures are slightly below 23,000 points, currently trading at 22,950 points.
💵 The dollar continues to strengthen, approaching the 98-point zone on its DXY index. The EUR/USD pair loses the 1.17 level and begins to cool off, currently trading at 1.1675.
📉 European stock markets retreated during yesterday’s session and appear pessimistic about today’s session, possibly driven by Trump’s comments and the potential tariffs that could be imposed on Europe if no agreement is reached. DAX 40 futures have fallen by 1.5% from their recent highs, currently standing at 24,470 points, similar to the movements of the Eurostoxx 50, which has dropped to its current level of 5,440 points.
🛢️ Crude oil is declining amid trade tensions, with Brent crude expected to fall below $70 per barrel, currently trading at $68.95.
🥇 Gold futures have strengthened, surpassing $3,350 in recent hours and slightly retreating since then to the current $3,345.
₿ Bitcoin has activated its bullish patterns and is surging. The “head and shoulders” pattern in Bitcoin, which we identified in previous reports, appears to have been triggered, surpassing its highs above $112,000 and currently trading at $118,190.
