• US President Trump announced trade deals with the Philippines, Indonesia and Japan, with the latter involving a USD 550bln investment in the US and 15% tariffs for Japanese goods.
• US stocks closed mixed with underperformance in tech, APAC stocks were mostly higher; Nikkei 225 outperformed.
• Japanese PM Ishiba is likely to announce resignation as early as this month, according to Yomiuri. Other reports suggest August-end. 
• European equity futures indicate a positive cash market open with Euro Stoxx 50 future up 1.2% after the cash market closed with losses of 1.0% on Tuesday.
• DXY is flat, havens (CHF, JPY) lag G10 peers, antipodeans lead, EUR/USD remains on a 1.17 handle.
• Looking ahead, highlights include EU Consumer Confidence, US Existing Home Sales, Supply from UK, Germany & US.
• Earnings from VAT, Lonza, Equinor, Thales, Tesla, Alphabet, ServiceNow, IBM, Chipotle, GE Vernova, Freeport, AT&T, Thermo Fisher Scientific, Lamb Weston, Infosys, Moody's, CME & Hilton.

SNAPSHOT

US TRADE

EQUITIES

• US stocks finished the day somewhat mixed as the tech-heavy Nasdaq 100 lagged and was weighed on by weakness in mega-cap names Nvidia, Microsoft, Broadcom, and Netflix, while the Russell 2000 pared Monday's losses. As there was a lack of tier-1 data and with the Fed in a blackout period ahead of the confab next Wednesday, focus resided around a deluge of US earnings and also remarks from US President Trump and Treasury Secretary Bessent in which Trump announced a trade deal with both the Philippines and Indonesia, which will pay 19%. Furthermore, Trump said they will probably be meeting with Chinese President Xi in the not too distant future and that Xi has invited him to China, while Bessent suggested that August 1st is a pretty hard deadline, despite saying on Monday that the quality of the deal is what matters, not the time keeping, and he will conduct talks with China next Monday and Tuesday in Stockholm.
• SPX +0.03% at 6,308, NDX -0.50% at 23,064, DJI +0.46% at 44,525, RUT +0.81% at 2,249.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump announced that they completed a massive deal with Japan, which he said is perhaps the largest deal ever made with Japan to invest USD 550bln into the US and will open their country to trade including cars and trucks, rice and certain other agricultural products, and other things. Trump added that Japan will pay reciprocal tariffs to the US of 15% and is forming a JV with the US in Alaska and they are going to make a deal on LNG, while he added that Europe is coming in on Wednesday.
• Japan's top trade negotiator Akazawa said they were able to reach an agreement that is beneficial to both countries and struck a deal with the US after a 70-minute meeting with President Trump, while he added that steel and aluminium are not included in the tariff deal.
• Japanese PM Ishiba confirmed they agreed with the US to lower tariffs with auto tariffs lowered to 15% and will continue working closely with the US. Ishiba said the deal does not include lowering tariffs on Japan's agricultural products, while Japan will raise the portion of rice imports from the US within the minimum access framework.
• US President Trump announced a trade deal with the Philippines and stated that “The Philippines is going OPEN MARKET with the United States, and ZERO Tariffs. The Philippines will pay a 19% Tariff”. Trump separately announced a deal with Indonesia with the tariff rate set at 19%, while the US will now sell American made products to Indonesia at a 0% tariff.
• US President Trump said there will probably be a meeting with Chinese President Xi in the not-too-distant future and that Xi has invited him to China, while he added they are getting along with China very well and he does not mind if the Philippines gets along with China.
• US President Trump said we are going to get drug prices down and drug companies will have a lot of problems if they don't agree, while he added that they will use import restrictions to force foreign suppliers to cut drug prices.
• China's Commerce Minister held a video call with the EU's trade chief and had candid and in-depth discussions, while they discussed China and EU trade cooperation and issues, as well as EU sanctions on Chinese firms and China lodged solemn representations over sanctions.
• US President Trump will meet UK PM Starmer during his weekend trip and they will seek to formalise a trade deal.
• Brazilian Finance Ministry official Durigan said they have been working on a plan to protect themselves from potential 50% taxation by the US, and the work has not been completed, while they have tried to do everything possible to reverse the 50% tariff by the US and have been looking at the possible need to help Brazilian companies due to US tariffs which will be done with the least possible fiscal impact.

NOTABLE HEADLINES

• US President Trump said Fed Chair Powell is going to be out soon anyway, while he added the economy is strong and that Powell keeps rates too high. Furthermore, Trump said that Powell’s got to be out in 8 months and Trump suggested that they should be at 1%.

APAC TRADE

EQUITIES

• APAC stocks were mostly higher as focus centred on the latest trade developments after US President Trump announced three trade deals in one day with the Philippines, Indonesia and Japan, with the latter involving a USD 550bln investment in the US and 15% tariffs for Japanese goods.
• ASX 200 gained with the advances led by strength in materials, miners, energy and resources, while defensives are at the other end of the spectrum.
• Nikkei 225 surged above 41,000 following the announcement of a US-Japan trade deal involving a 15% tariff on Japanese goods including autos and auto parts which is less than the previous threat of 25% tariffs and in turn, boosted automakers which dominated the list of biggest gainers with several up by double-digit percentages, while there were also tailwinds as the JPY slightly softened in the aftermath of a report that PM Ishiba is to announce his resignation by the end of August.
• Hang Seng and Shanghai Comp conformed to the mostly positive risk tone with US President Trump noting that there will probably be a meeting with Chinese President Xi in the not-too-distant future, while US Treasury Secretary Bessent said they will likely work out an extension regarding the August 12th deadline with China and he will attend talks next Monday and Tuesday with China in Stockholm.
• US equity futures (ES +0.2%, NQ +0.1%) gradually edged higher in a restrained reaction to the latest trade developments and as participants await a slew of earnings releases.
• European equity futures indicate a positive cash market open with Euro Stoxx 50 future up 1.2% after the cash market closed with losses of 1.0% on Tuesday.

FX

• DXY trades rangebound and was largely unaffected by the announcement of the US-Japan tariff deal, with the DXY languishing firmly beneath the 98.00 level after weakening yesterday which coincided with a softening of yields.
• EUR/USD gave back some of its gains but remained above the 1.1700 level after benefitting from the recent dollar selling, while participants await several upcoming key events, including potential trade developments with the US on Wednesday, followed by the ECB meeting and EU-China summit on Thursday.
• GBP/USD took a breather after reclaiming the 1.3500 territory with upside capped after the recent surprise jump in UK borrowing data and with little reaction seen to the comments from BoE Governor Bailey.
• USD/JPY rebounded from the prior day's lows with an early choppy reaction seen to the announcement of the US-Japan trade deal, while there was a mild tailwind seen following reports that Japanese PM Ishiba is to resign in which an announcement could be made by the end of August.
• Antipodeans remained afloat amid the mostly positive risk appetite but with trade contained overnight amid a lack of tier-1 data releases to spur price action.
• PBoC set USD/CNY mid-point at 7.1414 vs exp. 7.1596 (Prev. 7.1460)

FIXED INCOME

• 10yr UST futures eased back from yesterday's peak as risk sentiment was underpinned by the US-Japan trade deal.
• Bund futures faded the prior day's gains amid a lack of haven demand and with a EUR 5bln Bund issuance scheduled later.
• 10yr JGB futures slumped following the announcement of the US-Japan trade deal and with prices not helped by the latest 40yr JGB auction which resulted in the weakest demand ratio since 2011.

COMMODITIES

• Crude futures were marginally higher amid the mostly positive risk environment but with gains capped amid light energy-specific drivers and following mixed private sector inventory data which showed a narrower-than-expected drawdown in headline crude stockpiles.
• US Private Inventory Data (bbls): Crude -0.6mln (exp. -1.6mln), Distillates +3.5mln (exp. -1.1mln), Gasoline -1.2mln (exp. -0.9mln), Cushing +0.3mln.
• Spot gold mildly pulled back after rallying yesterday alongside a softer dollar and lower yield environment.
• Copper futures held on to the spoils from the prior day's rally amid trade-related optimism with the US reaching trade deals with three different countries.
• World refined copper market recorded a 97,000 metric tonne surplus in May 2025, according to the ICSG.
• Brazilian miner Vale reported Q2 iron ore output at 83.6mln tons (prev. 67.7mln tons Q/Q), iron sales 77.3mln tons (prev. 66.1mln tons Q/Q).

CRYPTO

• Bitcoin steadily retreated throughout the session from the USD 120k level to sub-119k territory.

NOTABLE ASIA-PAC HEADLINES

• Japanese PM Ishiba is to resign with the PM to announce his resignation by the end of August, according to Mainichi newspaper. It was separately reported that Japanese PM Ishiba is likely to announce resignation as early as this month, according to Yomiuri.
• BoJ Deputy Governor Uchida said Japan's economy has recovered moderately although some weakness has been seen in part and noted that Japan's economic growth is likely to moderate due to the effects of trade and other policies. Uchida said uncertainty surrounding trade policies remains extremely high and it is important to maintain loose monetary policy to support the economy. Furthermore, he said interest rates are expected to be raised in accordance with economic and price improvements if the scenario is realised and he will judge whether the economy and prices move in line with the forecast without any pre-set idea.
• Thereafter, BoJ Deputy Governor Uchida said at present, BoJ must support the economy through accommodative monetary policy. US-Japan trade deal roughly falls in line with assumptions BoJ made in projections at prior quarterly report on May 1.
• European Commission President von der Leyen eyes a rare-earth mining agreement with Japan, according to Nikkei.

GEOPOLITICS

MIDDLE EAST

• Israel's Defence Minister said there is a possibility of a renewed campaign against Iran.
• US State Department said US Special Envoy Witkoff is heading to the Middle East, while an official also commented that Witkoff will travel to Europe this week for meetings on issues including Gaza and will continue pushing for a Gaza ceasefire.
• US is to mediate the Israel-Syria meeting on Thursday to avoid new crises, according to Axios.

RUSSIA-UKRAINE

• US Energy Secretary Wright told Fox News that sanctioning Russian oil is a very real possibility.