• EU and US agreed on a trade deal with 15% tariffs; EU to buy USD 750bln in US energy, and make USD 600bln in investments.
• EC President von der Leyen later confirmed the 15% rate is for a vast majority of EU exports including cars, semiconductors and pharmaceuticals; 50% tariff on steel and aluminium remains.
• US and China are expected to extend the trade truce by 90 days, according to SCMP.
• APAC stocks are mixed with Japan lagging due to political uncertainty, US futures are higher (ES +0.5%), Europe set to open firmer (Eurostoxx 50 future +1%).
• DXY is steady with FX markets broadly contained, EUR/USD remains on a 1.17 handle, USD/JPY failed to hold above the 148 mark.
• Looking ahead, highlights include Dallas Fed Manufacturing Business Index, Treasury Financing Estimates, OPEC+ JMMC, US and China talks in Stockholm, supply from the US.

SNAPSHOT

US TRADE

EQUITIES

• US stocks saw gains on Friday amid trade optimism ahead of a key risk week. Sectors were predominantly firmer with outperformance seen in Materials, Industrials and Consumer Discretionary, while Energy, Communication, and Real Estate lagged. The outperformance in Materials was largely due to a solid earnings report from Newmont (NEM), while weakness in Communication was due to the large downside in Charter (CHTR) post-earnings.
• SPX +0.40% at 6,389, NDX +0.23% at 23,272, DJI +0.47% at 44,902, RUT +0.40% at 2,261.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump announced a deal with the EU involving a 15% tariff and stated the EU will buy USD 750bln in US energy and is opening up all countries, while he added the EU will purchase US military equipment and will make USD 600bln in US investments. Trump added that the deal is the biggest ever made and will be great for cars, as well as noted that agriculture is also to have a big impact. Furthermore, Trump said they are looking at deals with three to four other countries and countries will probably receive a letter of clarification or confirmation this week.
• European Commission President von der Leyen confirmed there will be 15% tariffs across the board and said the trade deal creates certainty and stability for businesses on both sides of the Atlantic. Von der Leyen said the deal reaffirms the transatlantic partnership and the 15% tariff rate is for a vast majority of EU exports including cars, semiconductors and pharmaceuticals, while she added that they agreed on zero-for-zero tariffs on certain agricultural products and on strategic products such as aircraft component parts and certain chemicals. Furthermore, she commented that tariffs will be cut and a quota system in place for steel, while there will be major purchases of US LNG and details on the trade deal framework will happen over the next few weeks.
• US senior administration official said the EU agreed to open markets to all but a few products, while President Trump suggested the EU buy USD 1tln of US energy during his term, but the EU settled at USD 750bln and agreed to 15% tariffs on autos, semiconductors and pharmaceuticals. The admin official stated that EU leaders accepted that US would stick to 50% tariffs on steel and aluminium and the EU wants to continue discussing steel and aluminium tariffs. The official stated that President Trump has the ability to change tariffs back if countries don't live up to their commitments and the EU lowered tariffs on many products in the agriculture sector, but not all. Furthermore, the aircraft investigation is still in progress in which the tariff will be zero for now and it is likely that aircraft won't face tariffs, but must wait for the probe to end, while the spirits issue is still to be decided and the US did not include it due to large EU agricultural surpluses.
• USTR Greer and Commerce Secretary Lutnick travelled to Scotland for the EU trade talks, while Lutnick stated the US will release the results of the Section 232 regarding chip imports in two weeks and separately commented that there are no more extensions to the August 1st deadline for tariffs.
• German Chancellor Merz said it is good that the EU and US reached a deal on tariffs and the deal avoids a conflict that would have hit the German economy, particularly in the autos sector, while Merz added that they protected their core interests even if he would have liked to see further facilitation of transatlantic trade.
• French European affairs minister said the trade deal between the EU Commission and the US will bring temporary stability, but it's still an unbalanced deal, while the minister added that the deal has merits of exempting certain key French sectors such as aeronautics, spirits and medicines.
• Dutch PM Schoof said the EU-US agreement is vital for an open economy like theirs, while he added that it is important to work out the details of the framework trade deal as quickly as possible.
• US President Trump is said to freeze export controls in order to secure a trade deal with China, according to FT. It was separately reported that US and China are expected to extend the trade truce by 90 days, according to SCMP.
• South Korea’s Finance Minister and Foreign Minister will meet with US counterparts this week, while South Korea is preparing a trade package and is drawing a mutually agreeable plan including a shipbuilding partnership. It was separately reported that South Korea suggested tens of billions of dollars worth of shipbuilding projects to the US in trade talks, according to Yonhap.
• UK government said PM Starmer is to meet US President Trump for wide-ranging talks in Scotland and they are expected to discuss progress on implementing the UK-US trade deal, hopes for a ceasefire in the Middle East, and applying pressure on Russia's Putin to end the war in Ukraine.

NOTABLE HEADLINES

• NASA spokesperson said about 20% of the workforce is set to depart the agency as part of an overall effort to become streamlined and more efficient amid concerns about mission safety.
• IAM District 837 members in St. Louis voted to reject the Boeing (BA) defence contract, while the Co. said it was disappointed that employees voted down the richest contract offer it's ever presented to IAM 837 and stated that no talks are scheduled with the union.

APAC TRADE

EQUITIES

• APAC stocks were ultimately mixed despite early tailwinds following the announcement of the US-EU trade deal, while gains were capped ahead of a slew of risk events this week and with Japan pressured amid political uncertainty.
• ASX 200 traded higher but with upside limited amid light catalysts and ongoing global trade uncertainty, while participants digested quarterly activity updates.
• Nikkei 225 wiped out its opening gains and dipped into negative territory amid political headwinds with Japan's ruling LDP said to have collected enough signatures on Friday to call a general meeting that will hold PM Ishiba accountable for the party's recent crushing election loss, while participants also brace for the BoJ policy meeting this week where analysts reportedly see the BoJ providing a less gloomy view and signalling the potential for resuming rate hikes later in the year.
• Hang Seng and Shanghai Comp were mixed ahead of US-China trade talks in Sweden and with the trade truce expected to be extended for 90 days.
• US equity futures (ES 0.5%, NQ +0.6%) were underpinned as participants reacted to the US-EU trade agreement but with further upside capped ahead of a slew of risk events this week.
• European equity futures indicate a positive cash market open with Euro Stoxx 50 futures up 1.0% after the cash market closed with losses of 0.1% on Friday.

FX

• DXY was little changed despite the announcement of the US-EU tariff deal which reduces trade uncertainty, although many other countries are still facing the August 1st tariff deadline with President Trump noting they are looking at deals with three to four other countries and that countries will probably receive a letter of clarification or confirmation this week. Furthermore, the US is set to conduct two-day talks with China beginning today, while attention will also be on the FOMC mid-week and the NFP report on Friday.
• EUR/USD eked marginal gains following the announcement of the US-EU trade agreement with tariffs set at 15% and involves EU purchasing USD 750bln of US energy and investment of USD 600bln into the US. This initially lifted the single currency as the deal ensured that the bloc averts a higher tariff hit, although momentum petered out shortly after as participants contemplated the ramifications of the shifting trade dynamics.
• GBP/USD remained lacklustre after retreating late last week and amid quiet weekend newsflow from the UK, where PM Starmer is preparing to meet with US President Trump on Monday for wide-ranging talks including discussions on the progress of implementing the US-UK trade deal.
• USD/JPY kept afloat with early upside capped by resistance at the 148.00 level and as risk sentiment in Japan soured.
• Antipodeans were uneventful owing to an extremely quiet calendar and the ultimately mixed risk appetite.
• PBoC set USD/CNY mid-point at 7.1467 vs exp. 7.1653 (Prev. 7.1419).

FIXED INCOME

• 10yr UST futures lacked demand following the recent US-EU trade agreement and with participants bracing for upcoming risk events including the FOMC meeting mid-week.
• Bund futures remained lacklustre after last week's slide and with German Chancellor Merz noting that the EU-US deal avoids a conflict that would have hit the German economy, particularly in the autos sector, while he added that they protected their core interests even if he would have liked to see further facilitation of transatlantic trade.
• 10yr JGB futures advanced alongside a deterioration in risk sentiment in Japan amid political headwinds and ahead of the BoJ announcement later in the week.

COMMODITIES

• Crude futures oil prices attempted to nurse some of Friday's losses but with the rebound limited amid quiet energy-specific catalysts from over the weekend and with the OPEC+ JMMC unlikely to make any alterations to the group's output plans at their meeting later today.
• Spot gold initially slumped as havens were pressured following the US-EU trade deal, but then gradually recouped its losses.
• Copper futures returned to flat territory as markets failed to meaningfully follow through on the early trade-related euphoria heading to a slew of risk events this week.

CRYPTO

• Bitcoin traded indecisively and swung between gains and losses above the USD 119,000 level.

NOTABLE ASIA-PAC HEADLINES

• PBoC conducted CNY 400bln 1-year Medium Term Lending Facility with the rate at 2.00% for a CNY 100bln net injection.
• Chinese Premier Li said at the World AI Conference that China will help establish an international AI collaboration group and that AI should be an international public good that benefits humanity, while he stated global AI development is accelerating and AI is moving from perceiving the world to changing the world.
• China’s Agriculture Ministry announced a plan to promote the consumption of agricultural products.
• Beijing issued a warning of geological disasters such as landslides for 10 of its 16 districts.
• US Commerce Secretary Lutnick said President Trump really likes TikTok, but it has to move to US ownership.

DATA RECAP

• Chinese Industrial Profits YY (Jun) -4.3% (Prev. -9.1%)
• Chinese Industrial Profits YTD YY (Jun) -1.8% (Prev. -1.1%)

GEOPOLITICS

MIDDLE EAST

• Israel’s military announced a pause of military activity in designated areas in Gaza where it is not operating until further notice, with the pause in fighting to be daily in three areas of Gaza.
• Two Jordanian air force planes and one Emirati plane dropped a total of 25 tonnes of aid in Gaza in the first air drop in months, according to a Jordanian official source. Furthermore, the World Food Programme said it hopes Israeli humanitarian pauses will allow for a surge in urgently needed food for Gaza and it has enough food in or on its way to the region to feed the entire Gaza population for almost three months.
• US President Trump said he doesn’t know what is going to happen regarding Gaza and Israel is going to have to make a decision, while he added we will see what happens and the US is going to do more aid.
• Hamas’s exiled chief Khalil al-Hayya said ceasefire negotiations with Israel are meaningless under a continued blockade and starvation, while he added the immediate and dignified delivery of food and medicine to our people is the only serious and genuine indication of whether continuing the negotiations is worthwhile.
• Yemen’s Houthis said they will target ships that belong to companies which deal with Israeli ports, regardless of their nationality and ships will be attacked regardless of their destination if shipping companies don’t heed their call.

RUSSIA-UKRAINE

• Kremlin spokesperson said Russia prefers political and diplomatic means to resolve the conflict in Ukraine, although Kyiv and the West rejected that path.
• Poland scrambled aircraft to ensure airspace security after Russia launched a missile attack on Ukraine, according to the Polish armed forces.
• European Commission President von der Leyen said following a conversation with Ukrainian President Zelensky that the EU will continue to support Ukraine on its European path.

OTHER

• Thailand's military noted clashes continue in several areas on the border with Cambodia, while it was separately reported that Thailand’s acting PM agreed in principle to have a ceasefire but wants to see a sincere intention from Cambodia and wants bilateral dialogue as soon as possible.
• Malaysia’s Foreign Minister said that Cambodia’s PM and Thailand’s acting PM will visit Malaysia on Monday to discuss the conflict, while a Thai Foreign Ministry spokesperson confirmed there will be a meeting on Monday.
• US President Trump spoke with the leaders of Cambodia and Thailand, while he stated that both are looking for an immediate ceasefire and peace, as well as stated that they are looking to get back to the trading table with the US.
• US Secretary of State Rubio spoke with the leaders of Cambodia and Thailand and urged both sides to deescalate tensions immediately and agree to a ceasefire, while he said the US is prepared to facilitate talks.
• North Korea said it has no interest in any new policy of South Korea and will not sit down for dialogue, while it rejects conciliatory overtures by South Korea and said North Korea and South Korea have moved irreversibly past the concept of one nation.
• South Korea Presidential Office said it is to continue to take actions needed for peace after North Korea's rejection of peace overtures, while the South Korea Unification Ministry said North Korea's reaction is an indication of the challenge in inter-Korea ties.

EU/UK

NOTABLE HEADLINES

• ECB’s Cipollone said the economy is sending conflicting signals and needs to see how trade will affect prices.
• Germany is reportedly to avoid EU punishment for breaching budget rules, according to FT,
• Several were killed in a train crash in Germany near the town of Biberach, close to the border with France.
• S&P affirmed Luxembourg at AAA; Outlook Stable, while Fitch lowered Finland’s sovereign rating from AA+ to AA; Outlook Revised to Negative from Stable.