MARKET WRAPS
Watch For:
EU PPI; Germany manufacturing orders; France industrial production; trading update from Norwegian Air
Opening Call:
European stock futures traded lower as Trump's tariff deadline loomed. Asian benchmarks fell; the dollar fell; Treasury yields rose; while oil futures fell and gold rose.
Equities:
Stock futures fell early Friday as concerns mount over the looming deadline to strike trade deals with the U.S.
The European Union is aiming for a trade "agreement in principle" with the Trump administration rather than a more comprehensive deal by July 9, said European Commission President Ursula von der Leyen.
Negotiating with the U.S. is "a huge task" because of the volume and complexity of the trade relationship, she said. "What we are aiming at is an agreement in principle," added von der Leyen.
Forex:
Concerns over the Fed's independence could continue to "cast a long shadow over the USD," said DBS's Philip Wee. Trump may ratchet up pressure on Chair Jerome Powell for rate cuts.
"Appointing a shadow Fed Chair could serve as a powerful tactic to undermine the sitting chair and exert informal control over monetary policy," Wee added. The futures markets see the Fed lowering rates every quarter between 3Q 2025 and 3Q 2026, he added.
Bonds:
A firmer-than-expected U.S. June jobs report leads Goldman Sachs economists to bring forward their Fed rate-cut expectations and lower the terminal rate, pointing to a lower range for U.S. yields across the curve.
The economists maintained their European and U.K. rate forecasts. GS forecasts Bund yields to reach 2.80% later in the year before surpassing 3% in 2026, as near-term risks around trade uncertainty eventually give way to upside risks due to German fiscal expansion.
Meanwhile, the Bank of England's path is unlikely to be affected by the rise in country risk premium, as front-end longs remain relatively well protected, GS says.
Energy:
Oil futures fell early Friday after the U.S. took measures to curb the trade of Iranian oil. On Thursday, the Treasury Department's Office of Foreign Assets Control said it is taking action against networks facilitating Iranian oil trade, while the State Department announced sanctions on oil smugglers exporting Iranian oil.
Crippling Iran's oil industry, its top source of revenue, has been a key goal of the Trump administration's "maximum pressure" strategy, ANZ said.
Metals:
Gold rose slightly in Asia amid U.S. fiscal-deficit concerns. The House of Representatives narrowly passed President Trump's "big, beautiful" tax and spending megabill on Thursday.
"After factoring in the additional revenues from new tariffs, it appears that the budget deficit will remain close to 6% of GDP for the next few years," Capital Economics' Paul Ashworth said. "The Federal debt is undoubtedly on an unsustainable path," he added.
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Copper prices have gained more than 16% to breach $10,000 a ton since the U.S. announced its reciprocal tariffs on trading partners, ANZ said. However, interest from Chinese fabricators appears to be waning due to the elevated prices, the bank said.
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Iron ore sentiment is positively driven by increased governmental focus on supply-side reforms this week, after China's top economic leaders said they want to "reduce 'disorderly' low--price competition and phase out outdated industrial capacity," with a key focus on steel and other sectors, Vivek Dhar of Commonwealth Bank of Australia said.
Prices for iron ore will likely be supported by these measures, which can improve steel mill margins without hurting iron ore demand, Dhar added.
TODAY'S TOP HEADLINES
Wall Street Worries as Crisis-Level Deficits Become the Government's Default Mode
U.S. budget deficits were already approaching $2 trillion when Republican lawmakers set out to extend and expand tax cuts this year. Interest rates were high and the bond market was jumpy, producing worrying spikes in borrowing costs.
Republicans forged ahead anyway, defying warnings from Wall Street to Washington that they were pushing the country further down a dangerous fiscal path.
Want to Know Where the Economy Is Heading? It's All About Earnings.
Lies, damned lies, and government statistics, Mark Twain might have been moved to say if he were around to read June's employment report. For a clearer view of the job market-and the overall economy-look to earnings season, which begins in two weeks, instead.
There was nothing wrong with the jobs report, at least not on the surface. The Bureau of Labor Statistics reported 147,000 nonfarm jobs were added in June, well above the consensus guess of 106,000 from economists surveyed by Bloomberg, which had been pared by the time of the report's release on Friday. Revisions didn't mar the report, either. The two preceding months' payrolls tally were revised up by 16,000, a trivial change but positive in direction.
Burberry Got Too Fancy. This American Is Taking It Back to Its British Roots.
LONDON-Soon after taking over as Burberry's chief executive last summer, Joshua Schulman popped into the company's Fifth Avenue store in Manhattan. The shop floor was cavernous, minimalist and showcased select $3,000 handbags.
What he didn't see were any $500 umbrellas-the type of higher-volume accessory that, along with trench coats, made Burberry an icon of functional, aspirational luxury for well over a century. As an American who had long admired the British brand, Schulman was puzzled.
Trump Says He Made No Progress With Putin on Ukraine in Call
WASHINGTON-President Trump spoke by phone Thursday with Russian President Vladimir Putin about the war in Ukraine but made no headway on halting the fighting.
"I didn't make any progress with him today at all," Trump said of Putin, speaking to reporters as he left Washington to deliver a speech in Iowa.
Apollo-Backed Athora Buys U.K. Insurer for $7.8 Billion
Savings and retirement services group Athora Holding said it struck a deal to acquire Pension Insurance Corp. for roughly 5.7 billion pounds ($7.77 billion), betting on the British specialist insurer to ramp up its European operations.
Athora, backed by the likes of Apollo Global Management, Athene Holding and a subsidiary of the Abu Dhabi Investment Authority, has insurance businesses across the Netherlands, Italy, Belgium and Germany.
Meta Offers to Buy Stake in Venture Funds Started by AI Hires Nat Friedman and Daniel Gross
Meta Platforms is offering to buy a minority stake in funds of the venture firm founded by two of its key artificial intelligence recruits, giving limited partners in the funds a chance for a quick payday.
Nat Friedman and Daniel Gross helmed NFDG, a venture firm they created a few years ago, before agreeing to join Meta. As they step back from NFDG, Meta is proposing to buy out a minority stake in its funds from limited partners via a tender offer, according to people familiar with the situation.
The Corporate Winners and Losers in Trump's Big Tax Bill
The final version of President Trump's hallmark tax-and-spend legislation delivers significant tax advantages to some industries while rescinding them for others.
While Medicaid and state-and-local-tax deductions, known as SALT, have received a lot of attention, the tax law will impact a broad array of sectors.
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Expected Major Events for Friday
05:45/SWI: Jun Unemployment
06:00/GER: May Manufacturing orders
06:00/GER: May Manufacturing turnover
06:30/HUN: May Preliminary Industrial Production
06:45/FRA: May Industrial production index
07:00/CZE: May Retail trade
07:00/SPN: May Industrial Production
08:00/UK: Jun UK monthly car registrations figures
08:00/ITA: May Retail Sales
08:30/UK: Jun S&P Global UK Construction PMI
09:00/EU: May PPI
10:00/IRL: Jun Irish Live Register latest monthly figures
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(END) Dow Jones Newswires
July 04, 2025 00:07 ET (04:07 GMT)
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