• APAC stocks traded mixed following the similar performance stateside where tariff updates remained in focus.
• US President Trump said he will announce something on pharmaceuticals very soon and will be announcing semiconductor tariffs, believes the copper tariff will be 50%.
• President Trump said the US is probably two days off from sending the EU a letter, which means a deal.
• European equity futures indicate a slightly higher cash market open with Euro Stoxx 50 future up 0.3% after the cash market closed with gains of 0.6% on Tuesday.
• DXY is a touch higher with the USD mixed vs. peers (stronger vs. havens, weaker vs. antipodeans).
• RBNZ maintained the OCR at 3.25%, as expected, hinted at future rate cuts ahead.
• Looking ahead, highlights include BoE FSR, FOMC Minutes, RBA’s Hunter, BoE Governor Bailey, ECB’s Lane, Nagel & de Guindos, Supply from UK, Germany & US.

SNAPSHOT

US TRADE

EQUITIES

• US stocks were choppy and the major indices finished mixed amid a lack of tier-1 data or Fed speak and as tariff updates dominated the slate after President Trump sent out 14 trade letters on Monday and with Commerce Secretary Lutnick anticipating another 15-20 trade letters to go out over the next 2 days. Furthermore, Trump stated during a cabinet meeting that he is to announce something on pharmaceuticals very soon and believes the copper tariff will be 50%, which immediately lifted copper prices by over 10% to a record high.
• SPX -0.07% at 6,226, NDX +0.07% at 22,702, DJI -0.37% at 44,241, RUT +0.66% at 2,229.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump said some letters are at 60% and 70% rate, while he said he could have been much harsher on trade and that he could go higher with tariffs.
• US President Trump said they have a really good relationship with China lately and China has been very fair on the trade deal, while he speaks with Chinese President Xi often. Trump also said the EU has been speaking to the US and is treating the US very nicely, while they are probably two days off from sending the EU a letter which means a deal.
• US President Trump said August 1st is not a change, it is a clarification maybe and we are picking a number that is low and fair, while he added that BRICS are getting a 10% charge pretty soon and that BRICS was set up to hurt the US. Furthermore, he said the dollar is king and will keep it that way.
• US President Trump said he will announce something on pharmaceuticals very soon and will be announcing semiconductor tariffs, while he believes the copper tariff will be 50%. Trump added “going to give people about a year, year and a half to come in and after that they are going to be tariffed if they have to bring the pharmaceuticals, drugs into the country, and will be a very high rate, something like 200%".
• US President Trump delayed reciprocal tariffs as Treasury Secretary Bessent wanted more time on deals, according to WSJ.
• US President Trump posted they "will be releasing a minimum of 7 Countries having to do with trade" on Wednesday morning and with an additional number of countries to be released in the afternoon.
• US Commerce Secretary Lutnick expects another 15-20 trade letters to go out over the next 2 days.
• EU negotiators are closing in on a trade deal with US President Trump that would leave the EU facing higher tariffs than the UK, with the EU not expecting to achieve the same access to the US market as British steel, cars and other products subject to sectoral duties. Furthermore, Brussels is ready to sign a temporary “framework” agreement that sets Trump's “reciprocal” tariff at 10% while talks continue, according to FT.
• China's Commerce Ministry placed eight Taiwanese companies on its export control list due to concerns regarding dual-use technologies.

NOTABLE HEADLINES

• US President Trump said Fed Chair Powell should resign immediately, while he later posted that Fed Chair Powell should cut interest rates and that now is the time.
• White House NEC Director Kevin Hassett has emerged as a contender for the next Fed Chair in a possible threat to early favourite Kevin Warsh and has met with President Trump at least twice in June regarding the job, according to WSJ.

APAC TRADE

EQUITIES

• APAC stocks traded mixed following the similar performance stateside where tariff updates remained in focus after the US flagged more tariff letters and President Trump suggested a 50% tariff on copper.
• ASX 200 marginally retreated with most sectors in the red although price action was confined within tight parameters.
• Nikkei 225 swung between gains and losses amid global trade uncertainty, while there were balanced comments from BoJ's Koeda who stated it is inappropriate to say the specific timing of the next rate hike now due to high uncertainty but added the BoJ must debate how much it should eventually shrink its expanded balance sheet and balance of JGB holdings.
• Hang Seng and Shanghai Comp conformed to the mixed overall picture in the region as property names dragged the Hong Kong benchmark lower, while the mainland remained afloat as participants reflected on mixed inflation data from China.
• US equity futures (ES -0.1%, NQ U/C) were lacklustre after yesterday's inconclusive performance as participants awaited tariff updates.
• European equity futures indicate a slightly higher cash market open with Euro Stoxx 50 future up 0.3% after the cash market closed with gains of 0.6% on Tuesday.

FX

• DXY gradually extended on the prior day's marginal gains amid a lack of tier-1 data and as focus centred on recent tariff updates including US President Trump signalling a 50% tariff on copper and he also flagged trade letters for a minimum of 7 countries on Wednesday morning followed by a further number of countries in the afternoon. Furthermore, participants also look ahead to the latest FOMC Minutes, while Trump renewed his calls for Powell to lower interest rates and to resign.
• EUR/USD marginally softened in relatively quiet trade despite some optimistic comments from US President Trump regarding the EU, which he stated has been speaking to the US and is treating the US very nicely, while he added they are probably two days off from sending the EU a letter and that a letter means a deal.
• GBP/USD remained contained following a recent slip to sub-1.3600 territory, with price action not helped by light catalysts.
• USD/JPY continued to advance and reclaimed the 147.00 status with little to derail the yen's recent weakening trend.
• Antipodeans were choppy amid the mixed risk appetite and in the aftermath of the RBNZ rate announcement in which the central bank maintained the OCR at 3.25%, as expected, but hinted at future rate cuts ahead.
• PBoC set USD/CNY mid-point at 7.1541 vs exp. 7.1806 (Prev. 7.1534).

FIXED INCOME

• 10yr UST futures remained constrained after trickling lower yesterday amid supply and ongoing trade updates.
• Bund futures lacked demand after a recent retreat and heading into the Bund issuances scheduled later today.
• 10yr JGB futures tracked recent downside in global peers with price action not helped by the lack of pertinent tier-1 data, while there were somewhat balanced comments from BoJ's Koeda.

COMMODITIES

• Crude futures slightly pulled back from yesterday's peak with headwinds seen following the latest private sector inventory data which showed a surprise substantial build in headline crude stockpiles.
• US Private Inventory Data (bbls): Crude +7.1mln (exp. -2.1mln), Distillate -0.8mln (exp. -0.3mln), Gasoline -2.2mln (exp. -1.5mln), Cushing +0.1mln.
• EIA STEO stated 2025 world oil demand is seen at 103.5mln BPD (prev. 103.5mln BPD) and 2026 world oil demand at 104.6mln BPD (prev. 104.6mln BPD).
• Spot gold was lacklustre amid a marginally firmer dollar and heading into today's FOMC Minutes.
• Copper futures held on to the prior day's significant gains after surging over 10% to a record high in the aftermath of tariff comments from US President Trump who believes the copper tariff will be 50%.
• Chile's Foreign Ministry said it has not received information from counterparts indicating the implementation of an effective tariff on copper, while Codelco's Chairman said they cannot give an opinion on President Trump's proposed copper tariffs until it is official as they need to see if some countries will be excluded, and see what copper products are affected.
• Mexico's Economy Minister said he will have a call with US authorities to discuss copper tariffs and see what they apply to.

CRYPTO

• Bitcoin trickled lower after failing to sustain a brief return above the USD 109k level.

NOTABLE ASIA-PAC HEADLINES

• China's state planner chair said to expect the size of China's economy to exceed CNY 140tln this year and noted that foreign tech curbs can only strengthen China's tech innovation and resolve on self-reliance.
• BoJ's Koeda said recent rises in Japan's food and rice prices were stronger than expected at the time of BoJ's May policy meeting and they are watching the development carefully, while he added the BoJ's weighted median inflation is still below 2% and must scrutinise whether momentum for stable inflation is becoming embedded in Japan's economy. Koeda also commented that it is inappropriate to say the specific timing of the next rate hike now due to high uncertainty over the economic outlook and stated the BoJ must debate how much it should eventually shrink its expanded balance sheet and balance of JGB holdings.
• RBNZ kept the OCR at 3.25%, as expected, while it stated that if medium-term inflation pressures continue to ease as projected, the Committee expects to lower the OCR further and annual consumer price inflation will likely increase towards the top of the Monetary Policy Committee's 1-3% target band over mid-2025. RBNZ stated the economic outlook remains highly uncertain and further data on the speed of New Zealand's economic recovery, the persistence of inflation, and the impacts of tariffs will influence the future path of the OCR. The minutes from the meeting stated the Committee expects to lower the official cash rate further, broadly consistent with the projection outlined in May and the case for keeping the OCR on hold at this meeting highlighted the elevated level of uncertainty and the benefits of waiting until August in light of near-term inflation risks. Furthermore, the Committee discussed the options of cutting the OCR by 25bps or keeping the OCR on hold at this meeting and some members emphasised that further monetary easing in July would provide a guardrail to ensure the recovery of economic activity.

DATA RECAP

• Chinese CPI MM (Jun) -0.1% vs. Exp. -0.1% (Prev. -0.2%)
• Chinese CPI YY (Jun) 0.1% vs. Exp. 0.0% (Prev. -0.1%)
• Chinese PPI YY (Jun) -3.6% vs. Exp. -3.2% (Prev. -3.3%)

GEOPOLITICS

MIDDLE EAST

• US President Trump exerted strong pressure on Israeli PM Netanyahu during their meeting to end the war, according to Yedioth Ahronoth citing informed sources.
• US envoy Witkoff is hopeful they will have an agreement for a 60-day ceasefire by the end of the week.
• Qatari delegation arrived on Tuesday for talks at the White House regarding the hostage deal and ceasefire in Gaza, according to Axios citing a source familiar.
• IDF presence in Gaza is understood to be the 'only issue' still to be resolved in the push for Israel-Hamas ceasefire and the two sides have bridged significant differences on several other issues, according to Sky News citing sources.
• French intelligence assessed that all parts of Iran's nuclear programme have been seriously hit and damaged, while the French intelligence chief said Iran’s nuclear programme has been pushed back several months. Furthermore, it was stated that a little part of Iran's highly enriched uranium was destroyed, but the rest remains in the hands of the authorities.

RUSSIA-UKRAINE

• US President Trump said he is not happy with Russian President Putin and is looking at Russian sanctions.
• White House considers giving Ukraine another Patriot air defence system, according to the Wall Street Journal.
• Ukrainian attack on a beach in the Russian city of Kursk killed three people, according to the regional governor.