Key Points

• ASML shares drop 6.5% as 2026 growth remains uncertain despite Q2 earnings beat
• Central banks ramp up domestic gold purchases to boost reserves as prices surge past $3,328/oz
• Rolls-Royce invests $75M to expand South Carolina plant, targeting U.S. data center demand
• GM shifts Escalade and truck production to Michigan, expanding gas-powered output amid strong demand
• Tesla’s North America sales chief exits as executive turnover grows and sales slump persists

Preview

Global markets are reacting to mixed corporate signals and shifting trade dynamics. ASML’s 6.5% share drop underscores semiconductor sector uncertainty, while central banks boost gold reserves as prices hit record highs. Rolls-Royce and GM are expanding U.S. production to capture resilient domestic demand, even as Tesla faces leadership churn amid declining sales. Investors remain focused on trade policy shifts, supply chain realignments, and the outlook for key growth sectors heading into the second half of 2025.

ASML Shares Drop on Uncertain 2026 Outlook Despite Q2 Beat

ASML shares fell 6.5% after the Dutch semiconductor equipment giant warned it could not confirm growth in 2026, citing macroeconomic and geopolitical uncertainty. The company reported Q2 net sales of €7.7 billion and net profit of €2.29 billion, both beating estimates, with net bookings surging to €5.5 billion. However, its Q3 revenue guidance of €7.4–7.9 billion missed market expectations of €8.3 billion, and full-year 2025 sales growth was narrowed to 15%. AI-driven demand remains a key driver, with strong EUV orders, but tariff and geopolitical risks weigh on the longer-term outlook.

Investment Insight:

While ASML’s AI-related demand continues to underpin strong bookings, the cautious 2026 guidance signals a potential plateau in semiconductor capital expenditure amid global trade and economic headwinds. Investors may view the stock’s recent pullback as an opportunity, but sustained upside likely hinges on the High NA EUV tool adoption pace and clarity on U.S.-China trade policy.

Central Banks Turn to Domestic Gold as Prices Soar

Central banks are increasingly sourcing gold directly from local mines to bolster reserves, save costs, and support domestic industries amid record-high prices. According to the World Gold Council, 19 of 36 surveyed central banks now buy from domestic miners, up from 14 last year, with Ghana, Tanzania, Colombia, and the Philippines among the most active. Spot gold trades at $3,328.3 per ounce, up 27% year-to-date, making local purchases an attractive hedge while conserving foreign exchange reserves.

However, reliance on artisanal mining raises concerns over labor practices and environmental standards, though central banks could help formalize supply chains.

Investment Insight:

Rising central bank demand, especially from gold-producing nations, is reinforcing bullish momentum in the metal, which remains a key hedge against geopolitical and currency risks. Investors should monitor producer nations with growing domestic purchases, as reduced international supply may sustain upward price pressure. Gold miners in emerging markets could benefit from direct central bank agreements, while refiners with London Good Delivery certification remain strategically positioned to capture additional processing demand.

Rolls-Royce Invests $75 Million to Expand South Carolina Plant

Rolls-Royce will invest $75 million to expand its Aiken, South Carolina, facility, boosting production of mtu Series 4000 diesel engines used in backup power systems for data centers and critical infrastructure. The expansion will create 60 new jobs and shift more component machining to the U.S., reducing reliance on German production.

The move underscores Rolls-Royce’s growing focus on energy and power systems, complementing its aerospace business. Production at the expanded site is expected to begin in July 2027, positioning the facility as a key hub in its North American power systems strategy.

Investment Insight:

The expansion highlights Rolls-Royce’s strategic pivot toward the high-growth data center and energy infrastructure markets, providing diversification beyond aerospace. The localization of production strengthens its U.S. market position and aligns with trends favoring domestic manufacturing for critical infrastructure.

Investors should watch for potential revenue growth in power systems and long-term margins as domestic production scales and data center demand accelerates.

GM Expands Production of Gas-Powered SUV, Trucks in Michigan

General Motors announced it will move production of the Cadillac Escalade to its Orion Assembly plant in Michigan and expand manufacturing of Chevrolet Silverado and GMC Sierra pickups to meet strong demand. Production is set to begin in early 2027, complementing existing output at plants in Texas and Indiana. The move is part of GM’s previously announced $4 billion U.S. investment and reflects a strategic pivot amid slower-than-expected EV adoption. Orion Assembly, initially slated to become an EV-exclusive facility, will now be retooled for gas-powered models.

Investment Insight:

GM’s decision underscores persistent consumer demand for profitable gas-powered SUVs and trucks, even as EV adoption lags. This strategic adjustment could bolster near-term cash flow and margins, supporting the company’s U.S. investment plans. However, the shift also raises questions about GM’s long-term EV transition timeline, signaling that investor focus should remain on balancing legacy vehicle profitability with eventual EV growth targets.

Tesla’s Top North American Sales Executive Leaves Amid Slump

Tesla confirmed the departure of Troy Jones, its vice president of sales, service, and delivery in North America, amid a steep decline in sales and growing executive turnover. The move follows other high-level exits, including a key AI executive and a top aide to CEO Elon Musk. Tesla has been attempting to revive demand through refreshed vehicle models, low-cost financing, and the launch of its robotaxi service in Austin. However, competition in the EV market and Musk’s political visibility continue to weigh on Tesla’s brand and margins.

Investment Insight:

Executive churn at Tesla raises concerns over internal stability as it faces declining sales and mounting competition. While long-term upside may come from Full Self-Driving technology and robotics initiatives, near-term risks remain elevated, with margins likely to stay under pressure. Investors should watch for delivery and margin updates in upcoming earnings to gauge the effectiveness of Tesla’s demand-boosting measures.

Conclusion

Markets are navigating a mix of technology headwinds, strategic industrial shifts, and geopolitically driven trade flows. ASML’s cautious 2026 outlook underscores cyclical and export-policy risks in semiconductors. Central banks are deepening gold reserves through domestic sourcing amid record prices. Industrial activity remains robust as Rolls‑Royce and GM expand U.S. manufacturing in response to energy and trade dynamics.

Tesla’s executive exit highlights mounting pressure in electrified auto markets. Investors should monitor how policy, tariffs, and demand trends intertwine with corporate guidance and capital allocation as the second half of the year unfolds.

Upcoming Key Dates to Watch

Date	Event	Why It Matters
Jul 17, 2025	U.S. Initial Jobless Claims	Key gauge of labor market strength, shaping Fed policy outlook
Jul 18, 2025	U.S. CPI report – Consumer inflation data	Will directly influence interest‑rate expectations and bond yields
Jul 22, 2025	FOMC Meeting Minutes	Provides insight into Fed’s stance on rates and economic risks

 

Key Points

• Nvidia to Resume China AI Chip Sales – Nvidia secured U.S. approval to restart H20 GPU shipments to China.
• China Q2 GDP Beats Forecasts at 5.2% – Strong industrial output offset weak retail sales, but deflationary pressures and soft real estate investment fuel calls for fresh fiscal stimulus.
• Port of Los Angeles Hits Record Traffic – Container volumes surged 8% in June as importers raced to beat Trump’s August 12 tariff deadline on Chinese goods.
• Trump Threatens 100% Secondary Tariffs – The U.S. president set a 50-day deadline for Russia to reach a Ukraine peace deal.
• U.S. Housing Market Cools Further – Nearly one-third of major housing markets report annual price declines.

Preview

Global markets brace for renewed trade and policy shocks as Nvidia’s U.S.-approved China chip sales lift tech sentiment, while China’s 5.2% GDP growth underscores lingering domestic headwinds. Shipping demand surged ahead of looming U.S. tariffs, and Trump’s threat of 100% secondary tariffs heightens geopolitical risk. Meanwhile, U.S. housing markets cool further, signaling potential regional investment opportunities.

Nvidia Cleared to Resume H20 AI Chip Sales to China

Nvidia announced it expects to restart H20 GPU shipments to China after receiving assurances from the U.S. government that export licenses will be approved. Sales were halted in April due to tightened U.S. export controls, which had cut Nvidia’s China market share nearly in half. The decision follows a meeting between CEO Jensen Huang and President Trump, coinciding with a preliminary U.S.-China trade framework easing tech export restrictions. Nvidia shares rose 4.5% in early trading, signaling investor optimism over regained Chinese market access.

Investment Insight

The resumption of H20 GPU shipments could provide a meaningful revenue boost for Nvidia, reinforcing its competitive edge in China against domestic rivals like Huawei. Investors may view this as a short-term catalyst for earnings, but ongoing U.S.-China tech tensions and future regulatory shifts remain key risks.

China’s Q2 Growth Beats Estimates but Deflation Fears Linger

China’s GDP expanded 5.2% in Q2, slightly above forecasts but slower than Q1’s 5.4%, keeping Beijing on track to hit its 5% annual target. Industrial output rose 6.8%, while retail sales slowed sharply to 4.8%, reflecting weak consumer demand. Fixed asset investment grew just 2.8% as real estate investment contracted 11.2%. Economists warn that price discounting is eroding trade gains, with the GDP deflator down 1.2% year-on-year — the steepest drop since the global financial crisis. Calls for deeper fiscal stimulus and structural reforms are mounting, even as policymakers weigh delaying large-scale measures.

Investment Insight

While above-target growth reduces immediate pressure for aggressive stimulus, deflationary risks and weak domestic consumption threaten China’s economic momentum in H2. Investors should monitor upcoming Politburo signals and potential fiscal measures; infrastructure and consumer-focused sectors could benefit if Beijing moves ahead with targeted support. However, lingering tariff uncertainty and structural headwinds may cap upside for Chinese equities.

Port of Los Angeles Hits Record Container Volume Amid Tariff Rush

The Port of Los Angeles logged its busiest June ever, processing 892,340 TEUs — an 8% year-on-year rise — as importers accelerated shipments ahead of President Trump’s August 12 tariff deadline, which could raise levies on Chinese goods to 145%. The rush followed a temporary tariff pause that lowered rates to 45%, boosting U.S. manufacturing orders from China and fueling its $114.7 billion trade surplus last month. Port officials expect cargo volumes to ease after August as new tariffs take hold, with the National Retail Federation forecasting a double-digit decline in shipments through year-end.

Investment Insight

The record traffic underscores the “tariff whipsaw effect,” where shifting trade deadlines disrupt supply chains and frontload orders. Logistics providers and select shipping companies may see short-term gains, but rising freight costs and softening retail demand point to volume contraction later this year. Investors should remain cautious on transport and retail-exposed equities as the tariff uncertainty pressures margins and dampens holiday-season demand.

Trump Sets September Deadline, Threatens 100% Secondary Tariffs on Russian Export Buyers

President Donald Trump warned he will impose “secondary tariffs” of around 100% on nations buying Russian exports if Moscow fails to reach a peace deal on Ukraine within 50 days. Speaking at the White House alongside NATO Secretary General Mark Rutte, Trump expressed frustration with President Vladimir Putin, saying he expected a deal months ago. The proposed levies could heavily impact major Russian energy buyers such as China, India, Brazil, and Turkiye. Trump also announced additional U.S. military equipment purchases funded by European allies to bolster Ukraine via NATO supply chains.

Investment Insight

The tariff threat raises geopolitical and market risks, particularly for energy-importing nations reliant on Russian oil and gas. Secondary sanctions could tighten global energy supplies, driving volatility in oil prices and pressuring emerging-market currencies tied to Russian trade. Energy and defense sectors may benefit in the short term, but global trade disruption risks heighten uncertainty for broader markets, especially in Europe and Asia.

Nearly One-Third of Major U.S. Housing Markets Now Facing Price Declines

The U.S. housing market continues to cool as high mortgage rates, rising supply, and slowing demand weigh on prices. Annual home price growth slowed to 1.3% in June, the weakest pace in two years, according to ICE. Nearly one-third of the largest 100 housing markets now report annual price declines of at least 1%. Inventory jumped 29% year-over-year, though gains have slowed in recent months. Price weakness is concentrated in the South and West, with steep drops in Cape Coral, Austin, and Tampa, while the Northeast and Midwest still show solid price growth.

Investment Insight

Cooling prices and rising inventories signal a shift toward a more balanced housing market, potentially easing affordability pressures for buyers. However, continued regional disparities and persistent high mortgage rates suggest selective opportunities for real estate investors. Markets in the Northeast and Midwest may remain resilient, while overvalued markets in the South and West could face further price corrections, creating entry points for long-term investors.

Conclusion

Today’s developments underscore the interconnected pressures shaping markets—from the resurgence in global AI chip sales to trade-driven shipping spikes and the threat of sweeping tariffs. China’s outperformance masks underlying softness in consumption and real estate, suggesting policymakers may need to act. In the U.S., cooling housing data echoes a broader economic recalibration, while geopolitical tensions—marked by looming secondary sanctions—add uncertainty. Investors should watch China’s upcoming fiscal response, Nvidia’s execution in China, and U.S. consumer resilience as interest rates remain elevated. Strategic positioning across tech, regional real estate, and trade-exposed assets will be essential amid evolving risk dynamics.

Upcoming Key Dates to Watch

Date	Event	Forecast
Tue, Jul 15	China CPI & PPI (Jun)	Monitor deflation risks
Thu, Jul 17	U.S. Retail Sales & Industrial Production (Jun)	Key to consumer-led growth
Fri, Jul 18	BoJ & BoE Monetary Policy Minutes	Insights on global rate outlooks

Key Points

• European equities fall after Trump announces 30% tariffs on EU goods, with Germany’s DAX leading losses and autos hit hardest.
• China’s exports beat expectations in June, with rare earth shipments surging 60% and trade surplus widening despite a continued drop in U.S.-bound exports.
• Bitcoin tops $122,600 amid record ETF inflows and anticipation of pro-crypto legislation in Congress during ‘Crypto Week’.
• Wall Street braces for earnings season as S&P 500 profit growth slows and the G20 kicks off in South Africa without U.S. Treasury Secretary Bessent.
• Australia strengthens trade ties with China amid lingering security tensions, as PM Albanese meets Xi following a full reset of key commodity flows.

Preview

Markets opened the week under pressure from renewed trade tensions as Trump’s EU tariff move rattled Europe. China’s export resilience and Bitcoin’s surge past $120K offered contrasting optimism. Investors now look to earnings season for clarity on U.S. corporate margins, while geopolitical dynamics—from the G20 to Australia-China relations—remain fluid.

European Markets Slide as Trump Imposes 30% Tariff on EU Imports

European equities fell sharply Monday after President Trump announced a 30% tariff on EU goods, effective August 1. The Stoxx 600 dropped 0.5%, led by a 1% decline in the autos sector. Germany’s DAX shed 0.8%, while the FTSE 100 held slightly higher. EU Trade Commissioner Maros Sefcovic said a deal with the U.S. is still “very close,” though the threat casts a shadow over €1.7 trillion in transatlantic trade.

Earnings expectations for European firms have already reversed course, with Q2 EPS now forecast to fall 0.2% year-on-year, down from a 7.2% gain projected in April. Meanwhile, the Bank of England hinted at a potential rate cut as labor market softness builds, with markets pricing a 25bps reduction in August.

Investment Insight:

The tariff escalation adds fresh pressure to Europe’s export-heavy sectors, particularly autos and pharma, and compounds existing earnings headwinds. Investors should watch German and Irish equities for outsized impact. With the BoE signaling policy easing, GBP assets may see volatility while eurozone earnings revisions could intensify into Q3. Defensive positioning and selective U.S.-exposed European plays may offer relative insulation.

China’s Exports Beat Expectations as Rare Earth Shipments Hit Record High

China’s exports surged 5.8% year-on-year in June, surpassing forecasts and underscoring resilience in the face of U.S. tariffs. Rare earth exports soared 60.3% to an all-time high, with global buyers stockpiling ahead of the Aug. 12 deadline. Exports to the U.S. continued to slide, down 16.1%, despite a temporary truce, while shipments to Southeast Asia and the EU rose 16.8% and 7.6%, respectively. Imports posted their first gain this year, up 1.1%.

Steel, autos, and integrated circuit exports also jumped, reflecting robust industrial activity. Still, economists warn the momentum may fade in H2, with trade tensions and weak domestic demand clouding the outlook.

Investment Insight:

China’s better-than-expected export performance masks structural risks, as frontloaded shipments and geopolitical flashpoints threaten sustainability. The rare earth surge signals urgency among buyers to hedge supply chain exposure. Investors should monitor commodity plays linked to Chinese export dynamics and brace for potential volatility tied to second-half policy shifts or a breakdown in U.S.-China trade diplomacy.

Bitcoin Hits All-Time High Above $120,000 Ahead of U.S. ‘Crypto Week’

Bitcoin surged past $122,600 on Monday, setting a new record amid robust institutional inflows into Bitcoin ETFs and anticipation over major U.S. crypto legislation. ETF inflows reached $1.18 billion last Thursday — the strongest single-day showing in 2025. The rally precedes ‘Crypto Week’ in Congress, where lawmakers will debate bills including the Genius Act, aimed at regulating stablecoins and paving the way for private digital dollar issuance.

Market confidence has been further boosted by pro-crypto rhetoric from President Trump and growing expectations that regulatory clarity will unlock broader capital participation.

Investment Insight:

Bitcoin’s breakout underscores the strategic reallocation underway among institutions betting on digital assets as inflation hedges and geopolitical safe havens. While macro risks — including Fed policy and tariff-driven volatility — remain, regulatory progress could unlock the next leg of capital rotation into crypto. Investors should monitor legislative outcomes this week, as passage of key bills may catalyze new inflows and sustain momentum toward year-end targets of $140K–$160K.

G20 Diplomacy Frays as Earnings Season Kicks Off Under Trade Cloud

The week ahead marks the start of Q2 earnings season, with U.S. banking giants JPMorgan, Citi, Goldman Sachs, Morgan Stanley, and Bank of America reporting within days. Analysts expect S&P 500 earnings-per-share growth to decelerate to 4% from 12% in Q1, pressured by rising input costs and modest pricing power amid Trump’s widening tariff campaign.

Meanwhile, tensions simmer ahead of the G20 finance ministers’ meeting in Durban, South Africa, as U.S. Treasury Secretary Scott Bessent skips the summit following a diplomatic rift between President Trump and President Ramaphosa. South Africa now faces a 30% U.S. tariff, further straining ties ahead of the G20 Leaders summit in November.

Investment Insight:

Markets will closely watch U.S. bank results for signs of tariff-driven margin compression, particularly in trading and lending income. European financials, buoyed by a strong first half, may offer relative upside in Q3. On the geopolitical front, rising G20 friction and America’s selective tariff policy could accelerate the fragmentation of global trade alignments — an environment that may benefit firms with diversified regional exposure and low U.S.-EU reliance.

Australia Balances Trade Gains with Security Strains in China Reset

Australian Prime Minister Anthony Albanese arrived in Shanghai on a six-day visit aimed at deepening economic ties while managing simmering security tensions with Beijing. The trip marks his second since taking office and follows a series of trade normalizations — including the removal of tariffs on barley, wine, beef, and lobster — that have largely restored pre-2020 export flows.

However, security concerns persist, with recent flashpoints including naval incidents, espionage trials, and Australia’s Pacific defense posturing. Albanese is set to meet President Xi Jinping amid a broader regional recalibration driven by Trump-era tariffs and the emerging BRICS bloc.

Investment Insight:

Australia’s commodity sectors — particularly wine, beef, and minerals — stand to benefit from the continued thaw in trade relations with China. Yet investors should monitor defense-linked tensions that could reignite frictions and reintroduce volatility to bilateral trade. Companies with diversified export destinations and low strategic resource dependencies are better positioned as Canberra walks the tightrope between economic integration and national security.

Conclusion

Today’s newsletter reflects a broad theme of geopolitical risk intersecting with global economic and corporate dynamics. European markets are reacting to U.S. trade policy, China’s strong trade data underscores resilience despite weaker ties with the U.S., and Bitcoin’s surge highlights growing institutional interest ahead of regulatory clarity.

Earnings season begins under the shadow of trade pressures and G20 tensions, while Australia‑China relations remind us of the fragile balancing act between security and commerce. Investors should prepare for macro volatility as tariffs, central bank policy, and geopolitical headwinds could test both risk assets and safe havens.

 

Upcoming Key Dates to Watch

Date	Event	Why It Matters
July 15, 2025	U.S. CPI Report	Key inflation gauge that may shift Federal Reserve rate outlook.
July 15, 2025	China Q2 GDP & Retail Sales	Tests China’s economic resilience amid trade uncertainty.
July 20, 2025	Japan Upper House Election	Outcome may influence fiscal policy and yen volatility.

Preview

Markets woke up to a whirlwind of economic signals and regulatory tensions. The U.K. economy contracted for a second month in a row, prompting speculation of an imminent rate cut. In the U.S., the pharmaceutical industry is bracing for impact as Trump floats a staggering 200% tariff that could reshape global drug manufacturing. Meanwhile, Tesla races to catch up in the autonomous vehicle space, eyeing Phoenix as its next Robotaxi battleground. Bitcoin is in full breakout mode – blasting through $113K as investors dive headfirst back into risk assets.

UK Economy Contracts Again in May, Raising Recession Fears

The U.K. economy unexpectedly contracted by 0.1% in May, following a 0.3% decline in April, missing expectations for a modest rebound. Weakness was concentrated in production (-0.9%) and construction (-0.6%). The slump comes despite the country securing a U.S. trade deal, with domestic headwinds – including rising labor costs, higher employer contributions and lingering business uncertainty – weighing on output. Analysts now expect Q2 GDP to underperform earlier forecasts, prompting speculation that the Bank of England could cut rates as early as August.

Investment Insight:

Markets are now pricing in an 80% chance of an August rate cut by the Bank of England, despite inflation sitting just above 3%. Investors should watch for further signals from BOE officials, especially Andrew Bailey, ahead of the August 14 GDP release. A dovish pivot could support U.K. equities and rate-sensitive sectors like real estate and small caps, while putting downward pressure on the pound. Fixed income investors may look to extend duration in anticipation of falling yields.

Trump’s 200% Tariff Threat Leaves Pharma Firms Scrambling

President Trump has reiterated plans to impose sweeping tariffs of up to 200% on pharmaceutical imports, giving companies 12-18 months to prepare. While no formal timeline has been set, the threat has sent shockwaves through the sector, with analysts warning of massive cost inflation, margin erosion and potential drug shortages. UBS noted the grace period is insufficient for supply chain reshoring, which typically takes 4-5 years. The industry is hoping for carve-outs in ongoing trade talks, but clarity remains elusive as the Section 232 investigation report is expected by month’s end.

Investment Insight:

Pharma stocks could face significant margin pressure if tariffs are enacted, particularly for firms reliant on non-U.S. manufacturing (e.g., Sanofi, Novartis, Roche). U.S.-centric firms with stronger domestic supply chains (e.g., Eli Lilly, Pfizer) may become relative outperformers. Investors should also watch for signs of reshoring trends benefiting U.S. contract manufacturers and life sciences REITs. Near-term volatility is likely until the Section 232 report is released – options markets may see increased activity around large-cap pharma. Stay alert for any movement in U.S. trade negotiations, particularly with the EU and Switzerland.

Preview

This week covers a global spectrum of market-moving developments. We examine Brazil’s bold response to renewed U.S. tariffs under Trump. In South Korea, the central bank holds rates steady amid a heated housing market, while leadership changes shake up Elon Musk’s X platform. Finally, Nvidia briefly hits a historic $4 trillion valuation, underscoring the ongoing AI-fueled tech rally. Let’s unpack what these stories mean for markets, policy direction and investor sentiment heading into a volatile second half of 2025.

Brazil Vows Retaliation to Trump’s 50% Tariff

President Trump announced a 50% tariff on Brazilian imports effective August 1, increasing pressure over Brazil’s prosecution of former leader Bolsonaro. Brazil’s President Lula condemned the move, calling it political interference and invoking the nation’s Economic Reciprocity Law to launch countermeasures – possibly impacting U.S. exports like coffee, beef and minerals. The decision triggered a selloff in Brazilian assets, with the real dipping about 2% and stocks falling ~1.3%. Tensions between the U.S. and Brazil have now escalated into a full-blown trade confrontation.

Investment Insight:

The tariff standoff heightens trade-risk exposure in key commodity and agribusiness markets. U.S. importers of Brazilian goods may face increased input costs, potentially pressuring food and beverages sectors. Conversely, Brazil-focused exporters should hedge FX volatility, as the real may remain weak amid heightened political conflict. Investors should monitor potential Brazilian retaliation through tariffs or tech taxes – these could affect U.S. industrials and tech firms. Finally, a prolonged trade dispute could ripple into broader emerging-market sentiment and warrant caution for global portfolios tied to commodity flows.

Bank of Korea Holds Rates Amid Housing Surge, Eyes Future Cuts

The Bank of Korea (BOK) held its key interest rate at 2.5% on Thursday as it monitors the impact of new policies aimed at cooling a red-hot housing market. Seoul home prices spiked over 19% YoY in June, fueling a surge in household debt. The central bank cited financial stability concerns – especially tied to the country’s unique jeonse rental system – as a key factor for pausing. Despite soft GDP and rising external trade pressure, BOK is expected to cut rates in August and possibly November if current measures succeed in slowing debt and price growth.

Investment Insight:

Investors should expect South Korea to maintain a cautious easing trajectory. With household debt rising rapidly and the looming threat of U.S. tariffs on exports like autos and steel, the BOK’s balancing act will continue. Equity markets may benefit modestly in the short term from anticipated rate cuts, particularly in real estate and consumer finance sectors. However, foreign investors should also watch for FX volatility and trade-sensitive sectors as risks rise. For exposure to South Korean assets, a selective approach favoring domestic consumer plays and low-debt firms may offer relative safety amid ongoing policy recalibration.

Preview

Markets are navigating a fresh wave of inflation signals, executive shake-ups and troubling signs from the world’s second-largest economy. China’s deepening deflation reflects structural overcapacity and weak demand, complicating its policy path. Meanwhile, inflation expectations in the U.S. are falling back to pre-tariff levels, soothing market nerves. On the corporate front, Hershey names a new CEO from Wendy’s.

China Producer Prices See Sharpest Drop Since 2023

China’s producer price index (PPI) plunged 3.6% in June, its steepest annual fall since July 2023, deepening the country’s deflationary struggles. Consumer prices rose a modest 0.1%, returning to growth after four months of declines, while core CPI climbed 0.7% year-on-year. A lingering price war – partly triggered by oversupply and weak demand – continues to hurt industrial profitability. Despite recent gains in exports, economists warn that without stronger policy stimulus, China may struggle to escape its deflationary spiral.

Investment Insight:

The sharper-than-expected PPI decline signals persistent margin pressure on Chinese manufacturers, especially in export-driven and consumer-facing sectors. Beijing’s focus on ending destructive price competition could support quality-focused firms, but absent major fiscal stimulus, recovery may lag. Investors should watch for policy responses and be cautious with exposure to industrials and discretionary sectors tied to China’s domestic demand. Export-reliant companies might fare better near term, especially those diversifying toward Southeast Asia.

Trump to Impose 50% Tariff on Copper Imports

President Trump announced a 50% tariff on copper imports, aiming to boost domestic production. He also hinted at an upcoming 200% tariff on pharmaceutical imports, giving firms up to 18 months to relocate manufacturing to the U.S. Copper prices soared 13.12%, their biggest one-day gain since 1989 and shares of U.S. copper miner Freeport-McMoRan rose 5%. The U.S. currently imports nearly half of its copper, mainly from Chile. A formal tariff proclamation is expected by the end of July.

Investment Insight:

The copper tariff underscores Trump’s push for resource nationalism and reshoring of critical supply chains. U.S.-based copper producers stand to benefit significantly, potentially making stocks like Freeport-McMoRan attractive in the near term. However, higher input costs could ripple across construction, manufacturing and EV sectors. Investors should consider both commodity price upside and inflationary risks across copper-intensive industries, as well as the broader impact of potential pharmaceutical tariffs on healthcare stocks.

Preview

Shein pivots to Hong Kong after regulatory deadlock in London, Trump revives aggressive tariffs on 14 countries and India rattles the high-frequency trading world with a crackdown on Jane Street. Meanwhile, Asian stocks sway under geopolitical pressure and the U.S. tax code faces sweeping changes. From trade wars to tech disruption, each move has deep implications for capital flows, investor confidence and global risk exposure.

Shein Files Hong Kong IPO to Pressure UK Regulators

Shein has filed confidentially for a Hong Kong IPO after failing to get regulatory approval for a London listing. Disagreements between UK and Chinese regulators center on risk disclosures, especially concerning Shein’s supply chain links to Xinjiang. The move signals mounting frustration as Shein also faces regulatory heat from the EU and U.S. over trade practices and ESG concerns. Hong Kong may offer an alternative.

Investment Insight:

Shein’s IPO saga reflects geopolitical risk for global investors in Chinese firms. While a Hong Kong listing could unlock value, persistent ESG red flags and regulatory scrutiny raise governance concerns. Investors should expect valuation volatility and weigh reputational risk. Long-term upside depends on Shein’s ability to improve transparency, meet global standards and adapt to shifting trade frameworks in the U.S., EU, and UK.

Trump Announces New Tariffs on 14 Nations

Starting August 1, President Trump will impose steep tariffs – ranging from 25% to 40% – on imports from 14 countries, including Japan, South Korea and Indonesia. The move revives his “reciprocal tariff” agenda after a three-month pause and reflects growing trade protectionism. Trump’s action aims to correct trade deficits but risks global retaliation. Financial markets responded negatively, with U.S. indices closing sharply lower on tariff concerns.

Investment Insight:

Trump’s tariff hike signals rising global trade friction – bearish for exporters, logistics firms and global equities. Investors should brace for near-term volatility in manufacturing, tech and automotive stocks. Countries hit hardest may retaliate, increasing risks for multinationals. Stay cautious on emerging markets with high U.S. export exposure. Long-term plays could emerge in domestic reshoring and supply chain resilience themes.

Preview

India’s Financial Markets Face a Pivotal Shift

India’s financial markets face a pivotal shift as SEBI clamps down on high-frequency trading giants, notably Jane Street, which was temporarily banned and fined $570 million for alleged market manipulation. This regulatory crackdown targets sophisticated foreign traders profiting at the expense of retail investors amid India’s booming equity derivatives market – the world’s largest by volume.

The move signals growing scrutiny on algorithmic trading practices that dominate about 60% of derivatives trading. With firms like Citadel Securities and Jump Trading reassessing their India operations, the market could see reduced liquidity and slower growth. Investors should watch closely as SEBI expands its probe and adjusts regulations, reshaping the high-speed trading landscape in one of the world’s fastest-growing financial hubs.

Trump’s Tax Bill Reshapes U.S. Budget with Cuts

President Donald Trump’s newly signed tax-and-spending bill marks one of the most consequential fiscal overhauls in recent U.S. history, cementing the 2017 Tax Cuts and Jobs Act into permanent law while introducing fresh tax relief aimed at seniors, middle-income households and businesses.

The legislation lifts the SALT deduction cap temporarily, expands the child tax credit and introduces deductions for tip and overtime income, car loan interest and pass-through business income. It also launches “Trump accounts” for children’s savings. However, the bill delivers steep cuts to Medicaid, SNAP and federal student loan programs, raising concerns about the social safety net’s future. The rollback of clean energy tax credits signals a broader ideological shift in fiscal priorities. Markets showed muted reaction as investors await macroeconomic impacts and 2026 budget negotiations.

Investment Insight:

Trump’s fiscal package signals a pro-growth, pro-supply-side shift that may temporarily bolster consumer demand and small business investment—especially in high-income, high-tax states. Yet, deep entitlement cuts and elimination of green energy incentives could fuel longer-term political volatility and curb support for ESG-focused sectors.

Investors should monitor policy-driven rotation away from renewable energy and education services, while sectors like retail, auto and financial services may see moderate tailwinds from enhanced consumer deductions and business-friendly tax structures.

OPEC+ Surprise Output Hike Signals Confidence in Oil Market Stability

In a move signaling renewed confidence in global oil demand and market fundamentals, eight core OPEC+ members—including Saudi Arabia and Russia—agreed to a larger-than-expected production hike of 548,000 barrels per day starting in August. This acceleration outpaces their previously planned increase of 411,000 bpd and marks a continued rollback of voluntary output cuts originally set to stabilize prices during a period of oversupply and geopolitical tension.

OPEC cited low global inventories and steady economic growth as justifications for the hike. Oil prices, which had seen short-term boosts due to seasonal demand and recent Israel-Iran tensions, remain stable, with Brent settling at $68.30 and WTI at $66.50.

Investment Insight:

The faster pace of OPEC+ production increases signals confidence that global demand will absorb the extra supply—potentially tempering oil prices in the short term. For investors, this could pressure energy equities and reduce near-term upside in oil futures. However, lower input costs could provide relief to transport, logistics and industrial sectors.

Watch for possible headwinds to renewable energy plays if fossil fuel supply remains abundant and affordable and monitor potential bottlenecks at geopolitical chokepoints like the Strait of Hormuz. Long-term investors may find value in diversified energy holdings that can weather both production increases and policy volatility.

Preview

Markets closed early yesterday ahead of the Independence Day holiday – but not before packing in a wave of headlines. From a strong U.S. jobs report that sent gold prices tumbling and yields rising, to oil demand upgrades and biotech deal rumors shaking up the pharma space, investors had plenty to digest. Meanwhile, equities continued their record-setting rally, fueled by resilient economic data and tech momentum. Balfour’s conviction picks once again proved prescient, with Datadog rallying hard on its S&P 500 inclusion.

Gold Falls as U.S. Jobs Data Bolsters Dollar and Treasury Yields

Gold prices dipped on Thursday as stronger-than-expected U.S. labor data lifted the dollar and Treasury yields. June’s payrolls came in at 147,000 – well above the 110,000 estimate – while jobless claims dropped to their lowest level since mid-May. The 2 year yield, often seen as a barometer for rate expectations, spiked 8.3 basis points, reflecting a market reassessment of Fed policy easing. The U.S. Dollar Index climbed 0.4% and spot gold slid 0.5% to $3,344 per ounce, pressured by rising yields and a more attractive greenback.

Investment Insight:

This jobs print complicates the Fed’s path to easing. With labor remaining resilient and services PMI edging back into expansion territory, bets on near-term rate cuts are fading. Gold’s decline is more than seasonal: it signals market recalibration. Investors banking on looser policy will need to watch tomorrow’s NFP and inflation revisions closely.

Barclays Ups 2025 Brent Forecast to $72 on Stronger Demand Outlook

Barclays raised its Brent oil forecast for 2025 by $6 to $72 per barrel, citing stronger-than-expected demand and tighter supply dynamics. Despite a faster phase-out of OPEC+ voluntary cuts, global inventories declined in Q2 – driven by upward revisions in OECD demand and sluggish non-OPEC supply. The bank also lifted its 2026 forecast to $70 per barrel, reflecting optimism around fundamentals even as geopolitical risk premiums faded after the U.S.-mediated ceasefire between Israel and Iran.

Investment Insight:

The upward revision signals that physical demand is outpacing earlier bearish assumptions – a theme now visible across both OECD consumption and Q2 inventory drawdowns. For investors, the message is clear: structural tightness may persist even in a geopolitically calmer environment. While volatility remains, the path of least resistance in crude seems higher, particularly if OPEC+ under-delivers on production gains.

Preview

Markets are walking a narrow path today, caught between soft macro data, political friction and evolving corporate signals. Trump’s megabill – once seen as inevitable – is facing real resistance in the House, threatening both timelines and investor confidence. Microsoft’s fresh wave of layoffs points to continued pressure on corporate agility, even as profits soar. Tesla’s second consecutive delivery decline raised eyebrows, though not enough to rattle bulls – at least not yet. Meanwhile, falling mortgage rates are reviving refinancing demand, though homebuyers remain hesitant. And in geopolitics, the Pentagon’s pause on arms shipments to Ukraine marks a potential turning point, one that could redefine transatlantic defense dynamics.

House GOP Risks Collapse of Trump’s Megabill

House Republicans are struggling to muster the votes needed to advance Trump’s “megabill” in the House. Procedural rules stalled Wednesday night as at least five GOP members voted against it, forcing Speaker Mike Johnson and President Trump into intense behind‑the‑scenes lobbying. Both conservative hardliners (like Chip Roy and Thomas Massie) and moderates alarmed by steep Medicaid cuts remain in opposition. Any revisions would kill the July 4 target and send the measure back to the Senate.

Investment Insight:

The legislative gridlock adds to economic uncertainty. Failure to pass the bill means no immediate debt‑ceiling resolution, likely rattling bond and Treasury markets. Watch for higher yields and volatility in financials. Additionally, delay in tax cuts and spending could weigh on consumer‑sensitive sectors. If momentum stalls into next week, defensive bonds and cash equivalents may become more attractive until clarity returns.

Microsoft Slashes 9,000 Jobs Amid Restructuring Push

Microsoft is laying off about 9,000 employees – under 4% of its workforce – in its latest restructuring move. The layoffs, spanning teams and regions, follow earlier cuts of over 6,000 in May and are aimed at reducing management layers. Gaming, in particular, will see trimmed operations. The move coincides with the start of Microsoft’s fiscal year and ongoing efforts to streamline operations.

Investment Insight:

Layoffs typically signal cost-cutting or efficiency moves and in Microsoft’s case, the strategy appears to be preemptive rather than reactive. With strong fundamentals, growing cloud revenues and margin discipline, these cuts could reinforce Microsoft’s long-term operating leverage. However, recurring rounds of layoffs and management shakeups could create short-term internal friction and suggest shifting strategic priorities. Investors should watch for margin trends in Azure and signals of restructuring gains in upcoming earnings calls.