MARKET WRAPS
Watch For:
EU industrial production; Germany ZEW indicator of economic sentiment; trading updates from Barratt Redrow, Experian, B&M European Value Retail
Opening Call:
European stock futures advanced early Tuesday. Asian stock benchmarks gained; the dollar and Treasury yields were little changed; oil futures fell; while gold rose slightly.
Equities:
Stock futures rose as markets shrugged off a fresh round of tariff threats from President Trump. He said Monday that the U.S. will impose tariffs of up to 100% on Russia if it doesn't agree to halt hostilities in Ukraine within 50 days.
Meanwhile, the EU is readying a fresh list of American products to hit with retaliatory tariffs if a trade deal isn't reached by Trump's Aug. 1 deadline.
EU officials on Monday unveiled the list after Trump's latest tariff threat over the weekend revived a debate in the bloc over whether it should fight back, and how forcefully, if the two sides can't reach a deal.
The EU's approach to U.S. tariffs is getting renewed attention this week after Trump sent a letter to the bloc threatening to impose 30% blanket tariffs on European imports beginning Aug. 1. The move surprised EU officials who thought they were close to a preliminary agreement with the U.S.
Forex:
A surprisingly strong U.S. CPI result later Tuesday could extend the USD Index's recovery by affirming Fed Chair Powell's view that tariffs would boost inflation in coming months, DBS Group Research's Philip Wee said.
However, Trump's repeated criticism of Powell appears to have dulled the USD Index's ability to rally meaningfully on diminished Fed rate-cut expectations, he added.
Bonds:
Tom Parker and Jeffery Rosenberg, who run BlackRock's Systematic Fixed Income team, describe a "new conundrum" for bond markets tied to inflation uncertainty, rising debt sales, and falling global demand.
"Longer-term interest rates can rise even as the Fed is expected to cut rates," the pair wrote in a recent market outlook report. "And the direction of long-term rates may not follow Fed policy as strongly as it has in the past. Or even at all."
Energy:
Oil futures fell slightly in Asia amid mixed developments. Trump said Monday the U.S. will impose tariffs of up to 100% on Russia if it doesn't agree to halt hostilities in Ukraine within 50 days.
The 50-day pause has eased worries that direct sanctions on Russia could disrupt crude oil flows, ANZ said. However, sentiment has been weighed by rising trade tensions, it added.
Metals:
Gold edged higher early Tuesday. Today's key development is the release of U.S. CPI, XS.com's Rania Gule said.
"Inflation remains the core variable steering the Fed's monetary policy, and therefore directly impacts market sentiment toward safe-haven or risk-on assets," the senior market analyst said.
Should inflation be hotter than expected, expectations of a Fed rate cut in September may be scaled back, strengthening USD and putting downward pressure on gold. On the other hand, weak inflation readings would boost the case for Fed rate cuts and be strongly supportive of gold, Gule added.
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Iron ore sentiment is likely supported by strong demand and steel production, while low steel inventories could have led to Chinese mills restocking materials, ANZ said.
Iron ore port inventories are declining, and exporters have been front-loading shipments ahead of expected tariffs. However, gains are likely capped by concerns over China's efforts to curb steel capacity, the bank added.
TODAY'S TOP HEADLINES
China Says Its Economy Held Up Under Trump Tariff Attack
BEIJING-China's economy showed resilience in a turbulent first half of the year, remaining on track to hit its official growth target for the year despite President Trump's shifting tariff assault.
China said its gross domestic product expanded 5.2% in the second quarter of 2025 compared with a year earlier, slowing a touch from the 5.4% pace set in the first three months of the year and coming in line with economists' expectations.
Trump Bets Constantly Shifting Tariff Strategy Can Remake Global Trade
WASHINGTON-President Trump's whirlwind of trade moves is driven by a bet that keeping other countries guessing will allow him to better dictate negotiating terms with trading partners, ultimately making it easier to bend them to his will, according to Trump's aides and allies.
The downside risks of that bet have become clearer in recent days. Trump's tendency to back off deadlines threatens to weaken his hand, and his use of a novel legal theory to underpin much of his trade agenda opened him up to a legal challenge that might send the trade agenda back to the drawing board.
Post-Crisis Rules to Keep Banks Safe Are on the Way Out
LONDON-At a banquet in a gilded palace here on Tuesday night, U.K. Treasury chief Rachel Reeves will outline plans to kick the country's huge financial industry into a higher gear.
The planned address reflects a new willingness in both the U.S. and the U.K. to rethink tough banking regulations-rules put in place to stop the kind of financial crisis that enveloped the world nearly two decades ago.
Europe Draws Up Retaliatory Tariffs for U.S. Goods in Case No Trade Deal Is Reached
BRUSSELS-The European Union is readying a fresh list of American products-ranging from aircraft to alcoholic beverages, coffee and medical devices-to hit with retaliatory tariffs if a trade deal isn't reached by President Trump's Aug. 1 deadline.EU officials on Monday unveiled the list after Trump's latest tariff threat over the weekend revived a debate in the bloc over whether it should fight back, and how forcefully, if the two sides can't reach a deal.The EU in April froze an initial package of retaliatory tariffs against the U.S. after Trump said he would limit blanket tariffs on most countries to 10% for 90 days. The new EU list, circulated to the bloc's 27 member states and viewed by The Wall Street Journal, covers American imports that were together valued at roughly $84 billion last year.
The list covers about $77 billion worth of industrial imports, including aircraft, machinery, automotive products, chemicals, plastics and medical devices. It also covers about $7 billion worth of agricultural and food products, such as fruits and vegetables, wine, beer and spirits.
Nvidia Wins OK to Resume Sales of AI Chip to China After CEO Meets Trump
Nvidia said it has received assurances from the Trump administration that it can sell its H20 artificial-intelligence chip in China, days after Chief Executive Jensen Huang met President Trump.
The turnabout comes after the Commerce Department restricted sales of the chip in April, costing Nvidia billions of dollars. It is welcome news for the $4 trillion chip company and Huang, who is visiting Beijing this week.
Elon Musk Floats a New Source of Funding for xAI: Tesla
Elon Musk said Tesla shareholders would vote on investing in xAI, the latest move by the billionaire entrepreneur to tap his own companies to help fund his artificial-intelligence startup.
"If it was up to me, Tesla would have invested in xAI long ago," Musk said Sunday evening in a post on X, his social-media platform. "We will have a shareholder vote on the matter."
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Expected Major Events for Tuesday
06:00/ROM: May Industrial production
07:00/SPN: Jun CPI
07:00/SVK: Jun Core & net inflation development
07:00/SVK: Jun CPI
08:00/POL: May Merchandise trade
08:00/POL: Jun CPI
08:00/BUL: Jun CPI
09:00/EU: May Industrial Production
09:00/CRO: Jun CPI
09:05/GER: Jul ZEW Indicator of Economic Sentiment
16:59/AUT: Jul OPEC Monthly Oil Market Report
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
July 15, 2025 00:03 ET (04:03 GMT)
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