Global market highlights dominated headlines today as a U.S.–Japan tariff deal boosted metals, crypto sentiment improved on regulation progress, and investors turned their attention to the ECB’s upcoming decision.
Global Market Highlights: U.S. Tariff Deal & Metals Rally
Macro & Policy
- Markets continued to absorb the political pressure on the Federal Reserve, with President Trump criticizing Fed Chair Powell over interest rate inertia.
- Fed rate cut expectations for September remain elevated (~58% probability).
- Investors also remain wary of the inflationary implications of new trade alignments and the softening in the dollar.
Markets
- S&P 500: +0.2% (closed at 6,309, new record)
- Nasdaq: -0.4% (weighed down by mega-cap tech)
- 10Y UST: Yield eased to 4.34%, as bond demand increased post-trade deal
- USD Index: Steady, with modest weakness against the yen and euro
Corporate Earnings
July 22 Summary
- General Motors (GM): $1B earnings hit from tariff exposure; warned on 2H profitability.
- RTX, Lockheed Martin: Both reported margin compression due to higher input and logistic costs under the trade environment.
July 23 Key Reports
- Before Market: AT&T, General Electric, Boston Scientific, Hilton, Moody’s
- After Market:
- Tesla (TSLA): Market awaits clarity on Q2 delivery volume and profitability. Tariff relief on Japanese components and recent fall in battery metals prices may help offset past margin pressure. EV demand in China and U.S. remains a concern.
- Alphabet (GOOGL): Ad revenues and AI-driven cloud services in focus. Analysts expect strong topline growth but rising AI infrastructure costs may pressure margins.
- Also reporting: IBM, T-Mobile, Chipotle, CSX, and others.
Japan
U.S.–Japan Tariff Deal
- The U.S. and Japan reached a historic agreement, reducing auto and other industrial tariffs to a flat 15% from levels previously reaching ~27.5%.
- Japan pledged a $550 billion investment package into U.S. sectors like AI, EVs, chips, energy, and agriculture.
- While auto tariffs were slashed, steel and aluminum duties remain untouched under existing trade law.
Market Reaction
- Nikkei 225: +3.8%
- Toyota: +14%, Mazda: +17%, Honda: +11%
- 10Y JGB yield: +7 bps to highest since 2008
- The yen strengthened mildly as capital flows favored Japanese exporters.
Global Market Highlights: ECB and Eurozone Outlook
ECB Decision Preview (July 24)
- The ECB is expected to hold rates steady (MRO at 2.15%), but the tone of President Lagarde’s press conference will be key.
- Euro strength, driven partly by U.S. dollar softness and reduced recession fears, will be discussed.
- Market participants expect no cut until Q4, but inflation undershoot and trade risks may influence guidance.
UK Update
- June’s public sector borrowing hit £20.7 billion, higher than forecast.
- Chancellor Reeves left the door open to wealth taxes, while reasserting fiscal discipline.
- UK bond markets remain volatile ahead of BoE decisions in early August.
Global Market Highlights: Crypto Regulation Boosts Sentiment
Senate Introduces CLARITY Act Draft
- The U.S. Senate introduced its version of the CLARITY Act, aiming to define digital assets, assign roles to SEC and CFTC, and establish rules for “ancillary” tokens and stablecoins.
- Combined with the GENIUS Act, this move is seen as a landmark step toward regulatory certainty in the digital asset space.
- Bitcoin trades at ~$119,700; Ethereum at ~$3,790. Volatility has dropped, and institutional flows have ticked up.
Commodities Update
Metals Surge Post-Trade Deal
- Gold: +2.1% to $3,439/oz
- Silver: +3.7% to $44.81/oz
- Copper & Nickel: up 2–3% across LME contracts
- The U.S.–Japan trade deal boosted demand expectations across the EV supply chain, particularly for battery metals and automotive steel.
- Rising industrial metal prices are seen as a tailwind for auto manufacturers, especially those with upstream hedging or vertical integration.
Oil
- Brent crude eased slightly to $85.9/bbl amid demand-side caution and ongoing U.S.–India trade talks failing to yield a breakthrough.
Key Takeaways
- Tariff détente between U.S. and Japan revives industrial optimism, auto stocks rally globally.
- Gold and silver jump on global trade stabilization and central bank pause bets.
- Tesla and Alphabet earnings to set tech and EV tone for the remainder of the week.
- Crypto regulation gains momentum in U.S. Senate—market views it as constructive.
- ECB meeting tomorrow expected to hold; attention on tone and inflation risk reassessment.
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