Newsquawk Daily US Opening News - 7th July 2025

• US President Trump said 12 nations will receive tariff letters on Monday (deliveries to start from 17:00BST). Also, threatened 10% additional tariff for those aligned with BRICS.


• US Treasury Secretary Bessent said letters to trading partners will notify them that if no deal is reached, they will revert to April 2nd tariff levels; tariffs to take effect on August 1st.


• European bourses began the day with modest gains but action is tentative, Euro Stoxx 50 +0.3%; ES -0.4% amid trade uncertainty, NQ -0.5% underperforms on TSLA -6.5%


• USD firmer vs all major peers. Antipodeans hit by the tone, JPY on the USD strength and soft domestic wage data, Cable below 1.36 and EUR/USD at a 1.1723 low


• Fixed benchmarks contained and experiencing two-way trade into the tariff letters, USTs near-enough unchanged, Bunds lower but off worst


• Crude began on the backfoot after OPEC+ eight agreeing to increase output by 548k (prev. 411k); since, benchmarks off lows and modestly firmer. Metals dented by the USD.


• Looking ahead, highlights include supply from the UK (BoE Gilt sale), US President Trump meeting Israeli PM Netanyahu & US tariff letters


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TARIFFS/TRADE

• 
  US President Trump said trade letters are signed and are going out on Monday addressed to 12 countries but declined to say which countries or the different tariff levels involved. Trump later commented that they will have a deal or letter with most nations done by July 9th and could send out 12 or 15 letters on tariffs on Monday.
  


• US President Trump posted "I am pleased to announce that the UNITED STATES TARIFF Letters, and/or Deals, with various Countries from around the World, will be delivered starting 12:00 P.M. (Eastern), Monday, July 7th"


• 
  US President Trump posted "Any Country aligning themselves with the Anti-American policies of BRICS, will be charged an ADDITIONAL 10% Tariff. There will be no exceptions to this policy."


• 
  US Treasury Secretary Bessent said President Trump will send letters to trading partners notifying them if no deal is reached, they will revert to April 2nd tariff levels with the tariffs to take effect on August 1st, while Bessent added that they are close to several deals and expect to see some big announcements in the next days. Furthermore, Bessent said 100 smaller countries will get set a tariff rate and many never even contacted the US.
  


• 
  White House Economic Adviser Hassett said it is possible that some trade negotiations will push past the deadline, while he added that trade deals with the UK and Vietnam provide guidelines for additional agreements with other countries, according to a CBS interview.


• 
  EU diplomats said on Friday that EU negotiators failed to achieve a breakthrough in US trade talks and negotiations to continue into the weekend, while EU negotiators were looking to secure a US tariff pause extension if no wider trade deal is agreed. It was also separately reported that the US threatened the EU with a 17% tariff on food exports, according to FT.


• 
  Japan’s tariff negotiator Akazawa held in-depth phone talks with US Commerce Secretary Lutnick on Thursday and Saturday, according to Japan’s government.


• 
  Japanese automakers are reportedly exploring all options to help reduce trade imbalances with the US, via Nikkei; one idea is Toyota Motor (7203 JT) importing cars made in the US back to Japan.


• 
  China retaliated against the EU ban regarding public tenders for medical devices by imposing import restrictions on medical devices. China’s Finance Ministry said it is to exclude imports of medical devices exceeding CNY 45mln from the European Union from July 6th, while imports of medical devices from non-EU countries should not contain EU-made components worth more than 50% of the contract value.
  


• 
  India and the US are likely to take the final decision on a mini trade deal in the next 24-48 hours (reported on Sunday), with an average tariff under the mini trade deal likely to be 10%, while talks have currently only been completed on a mini-trade deal and negotiations on a larger bilateral trade agreement will begin after July 9th, according to CNBC-TV18.


• 
  Thailand is to offer the US more trade concessions to avert a 36% tariff with Thailand’s Finance Minister expected to submit the revised orders before July 9th with a proposal to boost bilateral trade volume and reduce Thailand’s USD 46bln trade surplus with the US by 70% within 5 years, according to Bloomberg.


• 
  South African Trade Department spokesperson says it remains committed to a trade deal with the US; conversations are constructive and fruitful.


• US-Indonesia trade deal includes buying US soybean, corn and energy products, according to an official.


• German government spokesperson says time is money when it comes to tariff negotiations; adds, Chancellor Merz is coordinating with EU President von der Leyen, Italy PM Meloni, and French PM Macron on tariff talks.

EUROPEAN TRADE

EQUITIES

• 
  European bourses began the session with modest gains but overall action is choppy/tentative as we await trade updates, Euro Stoxx 50 +0.3%; awaiting Trump to send the letters to 12-15 nations today and clarity on whether the July 9th tariffs have been pushed to August 1st, as commentary indicates.


• 
  Sectors are mixed and split down the middle, Energy names show the deepest pressure after OPEC+ increased oil output more than expected at its weekend meeting, sources signalling further supply increases at the upcoming August meeting; furthermore, Shell (+2.8%) trimmed production guidance for Q2 across LNG and integrated gas.


• 
  Insurance names outperform, benefitting from a broker upgraded to Generali (+1.5%) while Travel & Leisure names cheer lower crude benchmarks this morning, in the first part of the session at least.


• Stateside, futures are in the red, ES -0.4%. As the market awaits clarity on the trade front as outlined above.


• Modest underperformance is seen in the NQ -0.6%; hit by Tesla (-6.5%), as Musk considers a new political party within the US and Apple (-1.0%) after phone shipments from China in May were down 9.7% Y/Y for the tranche that includes iPhones.


• Click for the sessions European pre-market equity newsflow


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FX

• 
  USD firmer vs all major peers. Strength comes despite uncertainty on the trade front as we await the tariff letters. Instead, the USD is potentially drawing support from the pro-Dollar approach the administration is taking as Trump threatened an additional 10% tariff on nations aligning themselves with "Anti-American policies of BRICS"; DXY at a 97.439 peak, marginally taking out last week's 97.42 best.


• 
  Antipodeans suffer the most given the risk tone, though specific newsflow has been light. However, this will pickup with the RBA and RBNZ rate decisions due on Tuesday and Wednesday, respectively.


• 
  JPY hit by the USD and softer-than-expected domestic wage data which has further trimmed the odds of a BoJ hike by end-2025, now at sub-50%. USD/JPY as high as 145.48, looking to 145.95 from June 25th.


• 
  GBP also suffers. Pressure remains on the Pound after the PMQ-sparked sell off for UK assets last week. Since, reports suggest the Chancellor has told the Cabinet taxes will need to increase. Otherwise, UK specific news light and potentially to remain the case as the UK already has a US deal. GBP/USD sub-1.36 to a 1.3576 base.


• 
  EUR also hit, though not to quite the same degree as the above peers; EUR/USD at the low-end of a 1.1723 to 1.1790 band. Single currency attentive to the imminent trade letters, as newsflow in recent days has been on the negative side. Elsewhere, a handful of ECB speakers on the wires but nothing that has fundamentally shifted the narrative.


• PBoC set USD/CNY mid-point at 7.1506 vs exp. 7.1626 (Prev. 7.1535).


• PBoC surveyed financial institutions about their views on recent USD weakness, according Reuters sources; did not explicitly state the purpose of the survey but once source said they interpreted it as a sign authorities are concerned about sharp CNY appreciation


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FIXED INCOME

• Generally speaking, contained two-way trade into Trump's tariff letters.


• 
  USTs had a firmer start, posting gains of around five ticks though this waned alongside pressure in EGBs into/after the European cash equity open. Since, developments have been light as we await a tariff update. Holding around the unchanged mark in a 111-05+ to 111-12+ band.


• 
  Bunds also contained at first, but then succumbed to around 10 ticks of pressure on strong German industrial data. However, this was then quickly retraced and Bunds lifted to a 130.62 peak before waning into and after the cash equity open, to a 130.19 low. No move to Sentix or ECB speakers since, but Bunds have managed to pick themselves up off worst but remain in the red.


• 
  Gilts the marginal outperformer. No tariff update expected, as the UK already has a deal. The reported honesty from the Chancellor around the need for tax increases potentially welcome by Gilts, with gains of around 25 ticks at best; however, they remain shy of Friday's 92.79 best and markedly shy of Wednesday’s pre-PMQs 93.41 peak. As a reminder, BoE Gilt ops. recommence today with a short-term offering.


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COMMODITIES

• 
  Crude began on the backfoot, with modest discrepancy in terms of performance amid the lack of settlement. Follows on from OPEC+ action at the weekend which saw a larger than expected supply increase and further bearish sources via Reuters since (outlined in detail below), updates that pushed WTI and Brent to lows of USD 65.40/bbl and USD 67.22/bbl.


• Across the European morning benchmarks had been gradually lifting off lows, potentially driven by a refocussing on Saudi lifting its August OSPs by more than expected and/or a fading of some of the OPEC+ driven pressure. More recently, a modest bounce to highs of USD 67.04/bbl and USD 68.72/bbl has occurred, though with no clear fundamental driver behind the move.


• Metals await trade updates. Despite the tepid risk tone, XAU is under pressure this morning hit by the USD strength. XAU down to USD 3300/oz at worst, but is currently holding modestly off that low. A base that takes XAU back to support from the last few weeks at USD 3255/oz and USD 3246/oz.


• 
  Base metals also in the red, with the tepid tone and USD strength weighing. 3M LME Copper is under pressure, drifting further from the USD 10k mark it reclaimed on July 1st, hit a three-month peak at USD 10.02k in the following session and since has been on a downward trajectory. Today, as low as USD 9.77k


• OPEC+ said eight member countries agreed to raise oil output by 548k bpd in August (prev. 411k bpd increases) and will next meet on August 3rd.


• 
  OPEC+ "will likely" approve another output increase of around 550k BPD for September, according to Reuters sources; September hike will complete the return of 2.17mln BPD in voluntary output cuts. A September hike would also accommodate 300k BPD production quota rise for the UAE.


• Saudi Arabia set the August Arab light crude to Asia at plus USD 2.20/bbl vs Oman/Dubai average, while it set the OSP to NW Europe at plus USD 4.65 vs ICE Brent and set the OSP to the US at plus USD 3.90 vs ASCI.


• Qatar set the August Marine Crude OSP at Oman/Dubai plus USD 1.40/bbl and Land Crude OSP at Oman/Dubai plus USD 1.30.


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NOTABLE DATA RECAP

• German Industrial Output MM (May) 1.2% (Prev. -1.4%)


• EU Sentix Index (Jul) 4.5 vs. Exp. 1.1 (Prev. 0.2)


• 
  EU Retail Sales MM (May) -0.7% vs. Exp. -0.7% (Prev. 0.1%, Rev. 0.3%); YY (May) 1.8% vs. Exp. 1.2% (Prev. 2.3%, Rev. 2.7%)


• Swedish CPIF Flash YY (Jun) 2.9% vs. Exp. 2.5% (Prev. 2.3%); Ex Energy Flash YY 3.3% vs. Exp. 3.0% (Prev. 2.5%)


• UK Halifax House Prices MM (Jun) 0.0% vs. Exp. 0.0% (Prev. -0.4%, Rev. -0.3%); YY 2.5% (Prev. 2.50%, Rev. 2.6%)


• Swiss Sight Deposits (w/e Jul 4) of domestic banks 424.433bln (prev. 425.831bln); total sight deposits 459.83bln (prev. 460.702bln)

NOTABLE EUROPEAN HEADLINES

• 
  UK Chancellor Reeves has warned ministers that taxes will need to increase after the government U-turned on its welfare bill, despite repeated pledges not to increase the taxes of working people, according to CityAM.


• 
  UK ministers are to launch a GBP 500mln scheme to help struggling families, according to FT.


• 
  EU is to stockpile critical minerals due to war risk, according to FT.


• 
  ECB's Centeno says he "does not know if 25bps will do the trick", says risks remain tilted to the downside. Current stance will remain restrictive at 2% if output does not recover, via Econostream's X; amount and timing of further cuts is difficult to say. Big risk that the investment level will be short of projections. Article adds: a correction in EUR/USD is likely if the economy is too weak to support appreciation; undershooting inflation is currently the main risk for the ECB and it is conceivable to cut or pause at the July meeting.


• 
  ECB's Nagel says, on the German economy, growth at the start of the year was stronger than anticipated. "the German economy faces significant headwinds in the short term. Nevertheless, there are grounds for cautious optimism as we look to the future."


• 
  UBS expects the ECB to cut by 25bps in its July meeting; adds, if there is a benign outcome in EU trade talks, will abandon forecast for a July cut.

NOTABLE US HEADLINES

• US President Trump signed the One Big Beautiful Bill Act into law at the White House.


• Elon Musk launched a new political party and commented regarding why he changed his stance on Trump, as well as noted that increasing the deficit from USD 2tln under Biden to USD 2.5tln is insane and will bankrupt the US.

GEOPOLITICS

MIDDLE EAST

• 
  Israeli military issued an evacuation order to people at Yemen’s ports of Hodeidah, Ras Isa and Al-Salif, as well as to those inside the Hodeidah power station, while it announced to carry out airstrikes in those areas due to military activities being conducted there. Israel's Defence Minister later confirmed military strikes on Houthi targets in Yemen's ports of Hodeidah, Salif, Ras Isa, as well as the Ras Qatib power plant


• A Liberia-flagged, Greek-owned bulk carrier was attacked 51NM off Yemen’s Hodeidah, while the UKMTO later announced that all crew abandoned a ship that was attacked southwest of Yemen’s Hodeidah.


• Israeli PM’s office said the changes requested by Hamas to the Qatari proposal are not acceptable to Israel, while the negotiating team will depart to Qatar for Gaza talks.


• 
  Israeli PM Netanyahu said he is determined to ensure hostages’ return to Israel and remove the Hamas threat from Gaza, while he said his negotiators in ceasefire talks have clear instructions to achieve an agreement under conditions Israel has accepted. Furthermore, Netanyahu said ahead of his White House meeting that he believes the discussion with US President Trump can certainly help advance these results.
  


• 
  US President Trump said he will discuss Iran with Israeli PM Netanyahu and noted Iran’s nuclear program was set back permanently but they may restart in a different location, while Trump also said there could be a Gaza deal during the week ahead.
  


• 
  First session of indirect ceasefire talks between Israel and Hamas in Qatar ended inconclusively and the Israeli delegation does not have sufficient mandate to reach an agreement with Hamas as it has no real power, according to two Palestinian officials cited by Reuters.


• Hamas government office rejected a US State Department accusation that Hamas was involved in an attack on Americans at a Gaza Humanitarian Foundation site on Saturday.


• UK government re-established diplomatic relations with Syria.


• The second round of (Israel-Hamas) negotiations in Doha will begin this afternoon, via Al Arabiya sources. Subsequently, there is reportedly a positive atmosphere in Israel-Hamas negotiations, no breakthrough so far, according to Al Hadath.

RUSSIA-UKRAINE

• US President Trump said they won’t be sending patriot missiles to Ukraine but talked about it and noted they have to be protected, while he said Russian President Putin is worried about sanctions and understands it may be coming.


• Russian military forces gained control of Sobolivka in Ukraine’s Kharkiv region and Piddubne in Donetsk region.


• Russian Foreign Minister says Russia does not need a temporary ceasefire, but rather a lasting peace.

GLOBAL NEWS

• Russian President Putin told BRICS through a video link that it is important to enhance cooperation at BRICS and the usage of national currencies, while he commented that the liberal globalisation model is becoming obsolete.

CRYPTO

• Firmer, but Bitcoin is still shy of the USD 110k mark and by extension yet to retest peaks from last week. Specific newsflow light, focus firmly on broader market direction and tariff updates.

APAC TRADE

• 
  APAC stocks were mostly subdued following a lack of bullish catalysts from over the weekend and with the region cautious ahead of upcoming key events, including central bank announcements and the July 9th tariff deadline.


• 
  ASX 200 marginally retreated amid weakness in miners and as gold producers suffered due to a decline in the precious metal, although the downside in the broader market was limited by resilience in defensives and ahead of tomorrow's RBA announcement where the central bank is widely expected to deliver a consecutive 25bps rate cut.


• 
  Nikkei 225 was pressured following softer-than-expected growth in Labour Cash Earnings which resulted in the largest decline in Japan's real wages in almost two years, while automakers were weighed on by the ongoing US tariff threat.


• 
  Hang Seng and Shanghai Comp conformed to the uninspired mood amid trade uncertainty and frictions with China retaliating against the EU ban on public tenders for medical devices by imposing import restrictions on medical devices.

NOTABLE ASIA-PAC HEADLINES

• China released a plan to expand the domestic service industry and help promote rural revitalisation.


• China signed an agreement with Brazil to strengthen cooperation in infrastructure, medicine and new energy.


• 
  US President Trump said they pretty much have a deal on TikTok and the US will start talks with China regarding TikTok on Monday or Tuesday. It was separately reported that TikTok is building a new version of the app planned for the US with the existing app to eventually shut down in the US in March 2026, according to The Information.


• South Korea passed an expanded extra budget worth KRW 31.8tln.

DATA RECAP

• Japanese Labour Cash Earnings (May) 1.0% vs Exp. 2.4% (Prev. 2.3%, Rev. 2.0%)


• Japanese Real Cash Earnings (May) -2.9% vs Exp. -1.7% (Prev. -1.8%, Rev. -2.0%)

07 Jul 2025 - 11:01- MetalsData- Source: Newsquawk