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MORNING BID EUROPE - "Tariffs, please use this version"

Stella Qiu gives us a look at what the future holds for European and global markets.

The deadline for tariffs has passed and Donald Trump has imposed new levies on imports, including from countries that have not yet signed a trade agreement.

Canada was set at 35%, India at 25%, Taiwan at 20%, and Thailand, 19%. Switzerland received a staggering 39%, one of the highest rates. This raises the question: What does Trump have against the Swiss people? You're not buying enough American watches or chocolate?

After months of posturing and meetings, delays, and truces that prompted investors to wonder what was real and what was just a bluff, the big day finally arrived. There is much left to be done.

Most levies, it could be argued, are lower than the ones that were threatened on April 2 which sent the markets into a tailspin. Plus, the major trade agreements with Japan and the European Union were reached and talks with China and Mexico continue.

This is likely why the market's reaction has been so muted. Most Asian shares did fall, but not by much. South Korea, however, is the exception. Its shares fell over 3% due in part to the rollback of domestic tax cuts.

Taiwan's President said that the 20% tax is only temporary, and it is expected to reduce further once a deal has been reached.

Wall Street and European stocks did not seem too concerned by the tariff news. The EuroStoxx 50 futures fell by 0.3%. Nasdaq and S&P futures both fell by 0.2% due to Amazon's 6% drop after it failed to meet expectations.

After the news on tariffs is out of the picture, the euro zone's flash CPI will be released later that day. Expectations are for a slight reduction in July to 1.9% from 2.0%, in annual terms. The markets have only priced half of a reduction from the European Central Bank for early next year.

Then it will all be about the payrolls. This is crucial for hopes of a Federal Reserve rate cut in September. It's now priced at 40%, a far cry from 75% one month ago.

Forecasts point to a rise of 110,000 in July. The unemployment rate is expected to increase from 4,1% to 4,2%. If there are any positive surprises, they could reduce the likelihood of a change next month. This would give dollar bulls a reason to rally.

The greenback has had its best week in three years - gaining 2.5% compared to its peers. This is a continuation of its recent upward trend from a low point three years ago.

The Fed has remained hawkish and has not eased policy on the issue of tariffs. The Fed's preferred inflation gauge was a little hotter over night, showing some impact from tariffs.

The following are key developments that may influence the markets on Friday.

Eurozone flash CPI for the month of July

ISM Manufacturing Survey: U.S. Payrolls for July

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(source: Reuters)