Overview of this week's key schedule.
The suspension period for the United States' "reciprocal tariffs" has ended, Trump: New tariffs will begin on August 1.
According to Xinhua News Agency, on April 2, U.S. President Trump announced the implementation of the so-called "reciprocal tariffs," which subsequently caused turmoil in global markets. Under pressure from various parties, the Trump administration announced on April 9 that it would postpone the imposition of high "reciprocal tariffs" on some trading partners for 90 days. However, a 10% "base tariff" will be maintained, while threatening U.S. trading partners to complete negotiations with the U.S. before July 8.
As the deadline approaches, U.S. President Trump stated on July 4 that the U.S. government will notify countries that have not reached a trade agreement of the new tariff rates, which will range from 10% to 70%, and plans to formally implement this from August 1. This upper limit of 70% is significantly higher than the 50% announced in April, raising widespread concerns in the market that this move will exacerbate inflation risks in the U.S. economy and may trigger a new round of asset sell-offs.
On Friday, July 5, Trump confirmed to the media aboard Air Force One that he has signed tariff letters to be sent to 'approximately 12' countries, which he plans to issue on Monday (July 8). He described these letters as a 'take it or leave it' ultimatum, stating:
"Compared to previous complex negotiations, the letters are better... and much easier."
Behind the shift in strategy is the repeated setbacks in negotiations with major trading partners. Media reports state that after facing numerous frustrations in negotiations with major trading partners such as Japan and the European Union, Trump has become disillusioned with the process. The prolonged traditional trade negotiation model faces significant challenges under the accelerated timetable set by the White House.
As of now, only a few countries have reached agreements with the United States. The United Kingdom reached an agreement in May to maintain a 10% basic tax rate and received exemptions in key areas such as Cars; Vietnam successfully reduced tariffs on some of its Commodities from the threatened 46% to 20%.
Shifting from complex negotiations to unilateral ultimatums, this radical trade strategy from the U.S. has brought massive uncertainty to the global economy. As the July 9 deadline approaches, the market is holding its breath, paying close attention to the final destinations of these 12 mysterious letters and the chain reactions they will trigger.
The BRICS summit will be held in Rio de Janeiro, Brazil.
According to CCTV News, the 17th meeting of BRICS leaders will be held from July 6 to 7 in Rio de Janeiro, Brazil. The theme of this meeting is set as "Strengthening Cooperation Among the Global South to Promote More Inclusive and Sustainable Governance."
Experts from multiple countries believe that this leaders' meeting will be the first summit held after new member Indonesia and ten partner countries joined BRICS. Furthermore, several Emerging Markets and developing countries, as well as international and regional organizations, have been invited to attend, which will enhance representation and further promote unity and cooperation among Emerging Markets and developing countries, facilitating an equal and orderly multipolar world and inclusive economic globalization, showcasing a stronger "Southern Power" to the world.
Experts believe that, as the "first group" of the global South, the development and expansion of the BRICS mechanism will help further strengthen cooperation among global South countries. Marcos Pires, director of the Economic and International Research Institute at São Paulo State University in Brazil, stated that the expanded "Great BRICS Cooperation" provides a broader strategic dialogue platform for global South countries, helping to tighten political and economic ties among countries, and providing a platform for global South countries to participate in global governance, defend development rights, and strive for more voice.
Federal Reserve Releases Minutes of Monetary Policy Meeting
On July 10, next Thursday, the Federal Reserve will release the minutes of the monetary policy meeting.
Last month, the Federal Reserve continued to hold steady, pausing interest rate cuts for four consecutive meetings. The non-farm payroll data released on Thursday showed strong resilience in the U.S. job market, with an increase of 0.147 million in non-farm employment in June, surpassing market expectations of an increase of 0.106 million, and the unemployment rate dropping from 4.24% to 4.12%.
Nick Timiraos, a veteran reporter known as the 'New Federal Reserve Correspondent', believes that the previous remarks by Federal Reserve officials about the stability of labor market data justify their cautious approach to interest rate decisions. The recently released U.S. nonfarm payroll report may lead them to extend this period of policy observation.
As Powell himself stated, a "robust labor market" provides the Federal Reserve with more time to observe the effects of the series of policy changes implemented this year. On Tuesday, Powell mentioned at the central bank forum held by the European Central Bank that Fed officials are "closely monitoring the labor market," and although a "gradual cooling" trend has been observed, "we have not yet seen any unexpected signs of weakness."
Interest rate swap data shows that traders believe the possibility of a rate cut at the July 29-30 meeting has dropped to almost zero, while the probability of a rate cut in September is about 75%. The market still expects a 50 basis point cut within the year.
China releases June CPI and PPI data.
On July 9, China will release the June CPI and PPI data.
The data from last month showed that China's CPI fell by 0.1% year-on-year in May. Among them, urban areas remained flat, while rural areas fell by 0.4%; food prices decreased by 0.4%, and non-food prices were flat; consumer goods prices fell by 0.5%, while service prices rose by 0.5%. From January to May, the average national residents' consumption prices decreased by 0.1% compared to the same period last year. In May, national residents' consumption prices fell by 0.2% month-on-month.
The PPI decreased by 3.3% year-on-year and 0.4% month-on-month; the industrial producers' purchase prices fell by 3.6% year-on-year and 0.6% month-on-month. From January to May, the average prices for industrial producers' ex-factory and purchase prices both fell by 2.6% compared to the same period last year.
Guosen Securities analyzes that, based on the performance of high-frequency price indicators, the June CPI is expected to return to positive growth year-on-year, with a month-on-month drop continuing at 0.2%, while the year-on-year growth rate of PPI may remain the same as last month.
Countries such as the United Kingdom, South Korea, and New Zealand announced their interest rate decisions.
On July 9th, the Bank of England announced the minutes of its monetary policy meeting.
Last month, the Bank of England announced that it would keep the policy interest rate unchanged at 4.25%, in line with expectations. However, the degree of divergence in the voting results exceeded market expectations, with 6 votes in favor of maintaining the interest rate and 3 votes in favor of a 25 basis point cut. The minutes also released dovish signals. Traders have fully digested the possibility of two 25 basis point cuts within 2025.
In addition, on Wednesday, the Reserve Bank of New Zealand announced its interest rate decision, and on Thursday, the Bank of Korea announced its interest rate decision.
Many countries in the Eurozone announced the final value of June's CPI.
On July 11th, Germany and France announced the year-on-year final value of June's CPI.
The preliminary values released last month showed that Germany's inflation rate unexpectedly fell to 2% in June, the first time reaching the European Central Bank's target level in nearly a year, which was better than market expectations. However, compared to price rising pressures, many decision-makers are more concerned that economic weakness may drag inflation down.
Market expectations show that the European Central Bank may maintain the current interest rate level at the next monetary policy meeting later this month. As inflation has reached the target level, economists predict that there might be another rate cut within this year.
IEA publishes monthly report.
On July 11, the IEA released the monthly Crude Oil Product market report.
According to news from Wall Street, OPEC+ will agree to increase oil production by about 0.55 million barrels per day at Saturday's meeting, higher than the 0.411 million barrels per day in May, June, and July. OPEC+ representatives stated that OPEC+ will consider increasing production by another 0.548 million barrels per day at the next meeting.
Against the backdrop of easing tensions in the Middle East, international oil prices have fallen back to pre-conflict levels, with Crude Oil remaining at $67 per barrel. The IEA indicated in last month's report that as long as there are no severe disruptions to Middle Eastern Crude Oil supplies, the global oil market supply will remain adequate in 2025. Furthermore, the oversupply situation may persist for the remainder of this decade.
Fast Retailing, Levi Strauss & Co. and other companies release performance results.
In terms of individual stocks, next week remains a quiet season for Earnings Reports, but some well-known companies will also announce their latest results. $FAST RETAIL-DRS (06288.HK)$ 、 $Levi Strauss & Co. (LEVI.US)$ The company will release its earnings next week.
July 7, Monday
Keywords: United States Global Supply Chain Pressure Index, Eurozone Retail Sales Month-on-Month, China's Forex Reserves,$FWD (01828.HK)$New stock listing.
July 8, Tuesday
Keywords: United States New York Fed 1-Year Inflation Expectations, United Kingdom Central Bank Releases Financial Policy Meeting Minutes; $LENS (06613.HK)$ 、 $DAZHONG DENTAL (02651.HK)$ 、$XUNZHONG (02597.HK)$、$GEEKPLUS-W (02590.HK)$、$SHOUGANG LANZA (02553.HK)$、$FORTIOR (01304.HK)$Dark market listing
July 9, Wednesday
Keywords: U.S. wholesale sales month-on-month, U.S. weekly EIA Crude Oil inventory change (barrels), China releases June CPI and PPI data; Lens Technology, Dazhong Oral, Xunzhong Communication, GigaDevice-W, Shougang Longze, FORTIOR listing
July 10, Thursday
Keywords: U.S. 10-year Treasury bond auction - winning yield, U.S. 10-year Treasury bond auction - bid-to-cover ratio, U.S. weekly initial unemployment claims number,
Initial jobless claims in the United States, the Federal Reserve publishes the minutes of the monetary policy meeting, China's M2 money supply year-on-year. $Fast Retailing (9983.JP)$ Releases Earnings Reports, $Levi Strauss & Co. (LEVI.US)$ Releases Earnings Reports after market close;
July 11, Friday
Keywords: Total number of oil rigs in the United States for the week, Germany, and France releases June CPI year-on-year final value.
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Editor/Lee
