Risk flows as trade talks unclog
A look from Wayne Cole to the coming day in Europe and global markets.
When Prime Minister Carney agreed to cancel a digital tax, as requested by President Trump, the risk was open to the week in Asia when he returned to trade talks between the United States and Canada. The new date of this effort extended Trump’s original 9 July date.
Secondly, it seems to have been expanded for other talks, Treasury Secretary Bessent argues that last week can be done by the September 1 Worker Day holiday.
While investors went to the borders for the new quarter, the Wall Street -term transactions increased by 0.4% at record summits, while European and German stock futures were around 0.3%. Most Asian markets were black and the Middle East ceasefire has a further decrease in oil prices.
Investors pay attention to the progress of a major tax reduction of the United States, and as Trump’s prefers to the deadline of 4 July, as they progress towards the Senate. The democrats standing for time do not read every line on the 940 -page bill, and probably those who know what happened in them.
The Congress Budget Office estimates that the bill will add $ 3.3 trillion dollars to the country’s debt for ten years, and that it will add another blow to the US treasures and another impact on the cause of US exceptionalism.
The effect was the most prominent in dollars with Euro Clocking gains last week. Capital Economics Analyst James Reilly said that the US has fallen further than the previous year since the US moved to the free -floating exchange rate in 1973.
This slide should be pressing foreign investors to protect their dollar exposure, which creates more sales in a decline cycle for the currency.
Investors did not help investors who increased their expectations of federal reserve policy, which reached 65 basis points for the rest of the year. A July move is still a chance from the outside, but on Thursday, the payroll report may change if you have a disadvantage surprises. In particular, an increase of more than 4.3% in unemployment rate will lead to unseen levels since the end of 2021 and will definitely steal the alarm bells in the Fed.
Basic developments that may affect markets on Monday:
– European Central Bank forum in Sintra, Portugal, Begins
– German, Italian TWE DATA
– Fed’s Bostic and Goolsbee speech
(Editing by Jacqueline Wong)
