• US President Trump said they will have straight, simple tariffs of between 15% and 50% on countries, while he added the US is in serious talks with the EU and if they agree to open up to US businesses, US will let them pay lower tariffs.
• Reports noted that the US and the EU were closing in on a trade deal with a 15% tariff rate, albeit this is yet to be officially confirmed, and White House Trade Adviser Navarro said to take the reports with a pinch of salt.
• EU member states are set to vote on EUR 93bln of counter-tariffs on US goods on Thursday and a broad majority of EU members would support using the anti-coercion instrument in the event of no US trade deal and US tariffs of 30%.
• Alphabet (GOOGL) shares rose 1.7% after-market following earnings whilst Tesla (TSLA) slipped 4.4% as CEO Musk warned of “rough times”.
• APAC stocks mostly extended on gains; European equity futures indicate a higher cash market open with Euro Stoxx 50 futures up 1.3% after the cash market closed with gains of 1.0% on Wednesday.
• Looking ahead, highlights include Global PMIs, German GfK Consumer Sentiment, US Jobless Claims, Canadian Retail Sales, ECB & CBRT Policy Announcements, Speakers including RBNZ’s Conway & ECB President Lagarde, Supply from Italy & US.
• Earnings from LVMH, BNP Paribas, TotalEnergies, STMicroelectronics, Dassault Systemes, Carrefour, Michelin, BE Semiconductor, Richemont, Nestle, Roche MTU Aero, Deutsche Bank, Lloyds, IG, Reckitt Intel, American Airlines, Blackstone, Dow Chemical, Nasdaq, Union Pacific, Honeywell & Keurig Dr Pepper.

SNAPSHOT

• Click for the Newsquawk Week Ahead.

US TRADE

EQUITIES

• US stocks were bid and bonds were hit on Wednesday as the focus centred on trade updates following the announcement of a US-Japan trade deal in which Japan will pay a 15% tariff on imports to the US, which is down from the previously threatened 25%, while reports also noted that the US and the EU were closing in on a trade deal with a 15% tariff rate, albeit this is yet to be officially confirmed and White House Trade Adviser Navarro said to take the reports with a pinch of salt.
• SPX +0.78% at 6,359, NDX +0.43% at 23,162, DJI +1.14% at 45,010, RUT +1.53% at 2,283.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump said they will have straight, simple tariffs of between 15% and 50% on countries, while he added the US is in serious talks with the EU and if they agree to open up to US businesses, US will let them pay lower tariffs. Trump said they will be charging straight tariffs to most of the rest of the world and are in the process of completing a deal with China, while they are making deals with various Asian countries on energy and made a deal with the EU but it was related to military equipment.
• EU and US were reportedly heading for a potential trade deal with a 15% US baseline tariff on EU goods, while a EU-US deal could include exemptions for some EU goods, according to Reuters citing EU diplomats. EU member states are set to vote on EUR 93bln of counter-tariffs on US goods on Thursday and a broad majority of EU members would support using the anti-coercion instrument in the event of no US trade deal and US tariffs of 30%. FT also reported that the US and the EU close in on a 15% tariff deal which would waive tariffs on some products, including aircraft, spirits and medical devices.
• German Chancellor Merz said he is hearing there may be a decision on trade with the US.
• French President Macron said they want to provide stability and have the lowest tariffs possible, while they will coordinate the EU response to US tariffs.
• US White House Trade Adviser Navarro said the Japan trade deal should spur other deals along and would like to see relief in EU VAT. Furthermore, Navarro said would take it with a pinch of salt and that the EU putting out news on trade deals is aspirational, when asked about the FT report of the US & EU closing in on a 15% tariff deal.
• White House said on reports of an EU trade deal, that discussions about a possible deal should be considered speculation.
• White House said the US-Japan investment deal will focus partly on semiconductor design and fabrication, natural gas, and new shipbuilding yards. Furthermore, Japan will immediately increase imports of US rice by 75% and will purchase USD 8bln in US goods, including corn, soybeans, fertiliser, bioethanol, and sustainable aviation fuel.
• South Korea's Finance Ministry said the 2 + 2 trade talks with the US were cancelled due to the US Treasury Secretary's schedule, while the US proposed talks in the immediate future and the sides will set the time for another round of talks ASAP. Furthermore, it stated that South Korea's trade envoy is to still meet with his US counterpart during his trip, while there were separate reports that the US and South Korea have discussed creating a fund to invest in American projects as part of a trade deal and South Korea is to invest more than USD 100bln as part of a US trade deal, according to Yonhap.
• US federal prosecutors are laying groundwork to criminally charge companies and individuals that try to evade US tariffs, according to Bloomberg.

NOTABLE HEADLINES

• US President Trump signed AI executive orders to fast-track big projects and to turn America into an AI export powerhouse.
• US President Trump was told by the DoJ in May that his name is among many in the Epstein files, according to WSJ.
• White House official told Reuters on Wednesday that the administration was not denying that President Trump's name appears in the files.
• US Treasury Secretary Bessent said they could see 1-2 rate cuts this year and noted that he has breakfast with Fed Chair Powell almost every week. Bessent separately commented that a new Fed Chairman nominee is likely to be announced in December or January.
• White House said US President Trump will visit the Federal Reserve on Thursday at 16:00EDT/21:00BST.

AFTER-MARKET EARNINGS

• Alphabet Inc (GOOGL) Q2 2025 (USD): EPS 2.31 (exp. 2.16), Revenue 96.43bln (exp. 93.85bln), Cloud Revenue 13.624bln (exp. 13.14bln), Ad revenue 71.34bln (exp. 69.64bln), Search revenue 54.19bln, FY Capex view about USD 85bln (prev. 75bln, exp. 73.31bln); shares rose 1.7% after-market.
• IBM (IBM) Q2 2025 (USD): EPS 2.80 (exp. 2.65), Revenue 16.98bln (exp. 16.58bln); shares fell 5.2% after-market.
• Tesla (TSLA) Q2 2025 (USD): Adj. EPS 0.40 (exp. 0.41), Revenue 22.5bln (exp. 22.09bln); CEO Musk warned of "rough times". shares fell 4.4% after-market.

APAC TRADE

EQUITIES

• APAC stocks mostly extended on gains following the positive handover from Wall St and as recent trade developments continued to underpin risk sentiment.
• ASX 200 lacked conviction and lagged behind regional peers with heavy losses seen in gold miners after a drop in the precious metal, while participants also digested several quarterly production updates.
• Nikkei 225 continued its rally and briefly breached the 42,000 level to the upside as the euphoria from the US-Japan trade agreement lingered and with the electrical equipment manufacturers leading the advances, although the index has since pulled back from today's best levels.
• Hang Seng and Shanghai Comp were higher with little fresh catalysts to derail the recent positive momentum and following some optimistic comments from US Treasury Secretary Bessent ahead of next week's US-China talks in Sweden in which he stated that they are in a very good place with China right now and are back on track with China negotiations, while he also seemingly suggested they could do a rolling 90-day deadline when asked about the tariff deadline with China.
• US equity futures were rangebound following the prior day's advances and with mixed fortunes seen from the key after-market earnings from the likes of Alphabet and Tesla.
• European equity futures indicate a higher cash market open with Euro Stoxx 50 futures up 1.3% after the cash market closed with gains of 1.0% on Wednesday.

FX

• DXY lacked direction after softening yesterday with pressure seen against higher-beta FX in response to the US-Japan trade deal. Furthermore, US President Trump continued his criticism of Fed Chair Powell and reiterated his call for lower rates, while the data calendar is set to pick up with Jobless Claims, Building Permits, New Home Sales and PMIs due later.
• EUR/USD sats around a two-week peak but with gains capped after conflicting headlines on US-EU trade talks as reports initially noted that the US and the EU are closing in on a 15% tariff deal including some exemptions. However, the bloc is set to vote on a possible EUR 93bln package of countermeasures today, while White House Trade Advisor Navarro suggested taking reports of a nearing deal with a pinch of salt and the White House also stated that discussions about any possible deal should be considered speculation. Looking ahead, participants now await the ECB policy meeting and if there are any notable developments from the ongoing EU-China summit in Beijing.
• GBP/USD took a breather after gaining a firmer footing on the 1.3500 handle which coincided with strength in cyclical peers owing to the recent US trade deals.
• USD/JPY declined and tested the 146.00 level to the downside after breaching through this week's lows and following PM Ishiba's denial of resignation reports.
• Antipodeans extended on advances after recent cyclical outperformance and as risk sentiment remained mostly positive.
• PBoC set USD/CNY mid-point at 7.1385 vs exp. 7.1503 (Prev. 7.1414).

FIXED INCOME

• 10yr UST futures lacked demand after retreating yesterday amid the heightened risk appetite and trade optimism.
• Bund futures were heavily pressured amid reports that the US and EU are heading for a 15% tariff deal, although White House Advisor Navarro said to take these reports with a pinch of salt, and the White House also stated that discussions about any possible deal should be considered speculation.
• 10yr JGB futures marginally extended on recent losses to further beneath the 138.00 level in a continuation of the recent haven outflows.

COMMODITIES

• Crude futures gradually edged higher in rangebound trade after this week's choppy performance amid a lack of major energy-specific catalysts and with the broader focus on trade-related developments ahead of the August 1st tariff deadline.
• Spot gold languished near the prior day's lows beneath the USD 3,400/oz level as havens were shunned on trade optimism
• China June YTD gold output fell 0.3% Y/Y to 179.083 metric tons and China June YTD gold consumption fell 3.54% Y/Y to 505 metric tons. according to the China Gold Association.
• Copper futures remained afloat after advancing alongside the positive global risk environment.

CRYPTO

• Bitcoin marginally declined after failing to sustain an earlier return to above the USD 119k level.

NOTABLE ASIA-PAC HEADLINES

• Chinese President Xi said China and the EU are at another critical historic juncture and should enhance communication, increase mutual trust and deepen cooperation, while China and EU leaders should demonstrate vision and responsibility, as well as make correct strategic choices that meet the expectations of the people.
• EU's von der Leyen said rebalancing bilateral relations is essential and they have reached an inflection point, while she added it is vital for China and Europe to acknowledge respective concerns and come forward with real solutions. President von der Leyen said as cooperation has deepened, so have imbalances and noted that the China–EU relationship is one of the most important and consequential in the world.
• European Council President Costa said to Chinese President Xi that they need concrete progress on issues related to trade and the economy.
• US Commerce Secretary Lutnick said regarding the TikTok sale that he thinks a deal will happen and America will buy it.
• US lawmakers subpoenaed JPMorgan (JPM) and Bank of America (BAC) over the IPO of a Chinese battery startup, while the House committee had previously urged banks to stop work on CATL’s initial public offering, according to WSJ.

GEOPOLITICS

MIDDLE EAST

• Israel’s President told soldiers in Gaza that there were not "intense negotiations" and hopes they hear good news soon.
• Hamas handed its response regarding the ceasefire proposal to mediators, according to Reuters.
• Tehran's nuclear negotiator Gharibabadi said Iran is willing to return to the negotiating table with the US, "the sooner the better" but must be convinced the talks aren't a cover for further military action, according to Axios.

RUSSIA-UKRAINE

• Heads of the Russian and Ukrainian delegations held a meeting in Istanbul, while they agreed to exchange more prisoners including military and civilians.
• Ukraine's Umerov said Ukraine proposed a leaders' meeting with Russia at the end of August. Furthermore, Russia's Medinsky said all humanitarian agreements have been fulfilled and proposed to Ukraine establishing three working groups to work online, as well as proposed to consider declaring a number of short ceasefires.
• Chinese-made engines are being covertly shipped via front companies to a state-owned drone manufacturer in Russia to avoid detection in the wake of Western sanctions, according to Reuters citing three European security officials and documents seen.

OTHER

• North Korea leader Kim supervises artillery firing, according to KCNA