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Morning Bid Europe-Chagrin at Trump's three-card trade trick
Wayne Cole gives us a look at what the future holds for European and global markets. That's as unclear as mud. According to reports, the U.S. has set August 1 as the deadline by which higher tariffs on certain countries will be implemented if trade agreements are not made or in progress. There's no way to know which countries or deals are covered. Treasury Secretary Bessent said on CNN that President Trump will be sending letters to our trading partners telling them that if they don't make progress, then, on August 1, the tariffs will return to their April 2 level. Today, the "letters" will be sent to 10 to 12 countries. These are likely to be the same letters as those that were supposed go out last Friday. Howard Lutnick, the Commerce Secretary, told reporters that higher tariffs will take effect August 1, but Trump is "setting rates and deals right now". Announcements of trade policy changes made in TV interviews do not provide clarity. It is also unclear if and to whom the original deadline on July 9 still matters. India and the U.S. could, for example, make a mini deal today or tomorrow. However, they will continue to talk after July 9. Bessent reports that many countries have not contacted the U.S. to discuss trade and are likely to receive stiff letters as a result. Trump added confusion to the situation by saying that tariffs on some products could be as high as 60% or 70% - higher than the 50% tariff on China. He also threatened to impose an additional 10% tariff on any country aligning itself with the "anti American policies" of the BRICS group, a group with which the U.S. is currently in tariff negotiations. Investors have responded with amusement, pushing Wall St futures lower by 0.4%. Asian share indices were mostly lower, but not much, on Monday. Treasury yields have fallen a basis point, and the dollar is still near its four-year lows. The oil market has seen a big drop, with a loss of around 1%, after OPEC+ surprised the markets by increasing production much more than initially expected. They also announced a similar rise for September. Analysts believe that Saudi Arabia is putting pressure on lower-margin U.S. Shale production to gain market share. This is OPEC's response to "Drill baby, drill". Market developments on Monday that may have a significant impact Sentix investor sentiment for July, German industrial output for may * ECB Board Member Piero Cipollone and ECB President Christine Lagarde participate in Eurogroup Meeting in Brussels. ECB's Holzmann speaks
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India auto dealers warn about risks to retail volume and supply
India's Federation of Automobile Dealers Associations said that geopolitical tensions, spillover effects of U.S. Tariffs, and China's export restrictions on rare earths could affect consumer sentiment and further restrict vehicle supply, resulting in a drop in retail sales. Retail volume fell by 9.4% from the previous month. The average number of days a car spent in a showroom (or inventory days) increased to 55 from 52-53 in May. This is above the FADA threshold of 21 days. China's export restrictions on rare earth have disrupted global supply chains for automakers, adding to the challenges faced by Indian carmakers who are already struggling with high inventories as well as tighter financing due to uncertainty surrounding President Trump's tariffs. As we approach July 2025, the dealer sentiment is tilted toward a slowdown. De-growth expectations (42.8% & 26.1%), which exceed growth expectations (31.1%). Similarly, booking-pipeline traction remains uneven," FADA said. FADA stated that above-normal rains during the monsoon season should boost rural demand. However, FADA added that July is likely to be a mixed month, with an agrarian tailwind being tempered by seasonal headwinds as well as higher prices. The FADA held its last meeting on the 15th of November. You can also read about the warnings below. Demand may be subdued by June due to increased inventory levels, reduced funding and concerns over rare earth shortages. (Reporting by Chandini Monnappa in Bengaluru; Editing by Sumana Nandy)
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BRICS demands wealthy nations finance global climate change
On Monday, the final summit day in Rio de Janeiro for the BRICS group, leaders of developing nations were ready to tackle the challenges that we all face, including climate change, by demanding wealthy nations pay global mitigation of greenhouse gas emissions. As he prepares for the United Nations Climate Summit in November, Brazilian President Luiz inacio Lula da Silva has emphasized the importance of the Global South to combat global warming. In a statement released by BRICS leaders on Sunday, they argued that fossils fuels would continue to play a major role in global energy, especially in developing economies. We live in an era of contradictions around the world. When asked by a reporter about plans to extract oil from the Amazon rainforest, Brazil's environment minister Marina Silva responded that the important thing was our willingness to overcome the contradictions. In their joint statement the BRICS leaders stressed that providing climate financing "is a duty of developed countries to developing countries", which is standard for emerging economies at global negotiations. In their declaration, the group also indicated its support for the Tropical Forests Forever Facility that Brazil had proposed as a means for emerging economies of funding climate change mitigation above and beyond the requirements set for wealthy nations in the 2015 Paris Agreement. Two sources familiar with the talks said last week that China and the UAE indicated in their meetings with Brazilian Finance minister Fernando Haddad at Rio they planned to invest in the fund. In a joint statement, BRICS leaders criticised policies like carbon border taxes, anti-deforestation legislation, and other measures that Europe recently adopted for imposing "discriminatory protective measures" under pretext of environment concerns. DEFENDING MULTILATERAL DIPLOMATISM The opening of the BRICS Summit on Sunday presented the group as a bastion for multilateral diplomacy within a world that is fractured and highlighted the influence of eleven member nations who represent 40% of global production. The leaders also criticised the U.S. trade and military policies, and pushed for reforms of multilateral institutions, which are now largely controlled by Americans and Europeans. In his opening remarks on Sunday at the meeting, Brazilian President Luiz inacio Lula da silva drew an analogy with the Cold War Non-Aligned Movement. This was a grouping of developing countries that refused to join either side of the polarized world order. Lula said to leaders that "BRICS was the heir of the Non-Aligned Movement." "Multilateralism is under attack and our autonomy has been weakened once more." The Rio Summit, which was the first to include Indonesia, showcased the rapid growth of BRICS, but also raised questions regarding shared goals among its diverse group. In a statement released on Sunday, BRICS condemned the military attacks against Iran and Gaza but did not take a unified stance on which countries would be given seats in a reformed United Nations Security Council. Only China and Russia supported the addition of Brazil and India to this council. Leaders from India's Narendra Modi, and South Africa's Cyril Ramaphosa met in Rio de Janeiro to discuss geopolitical and economic tensions. The meeting's importance was reduced by the decision of Chinese President Xi Jinping to send Premier Li Qiang instead.
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US Trade Talks with South Korea Include Agriculture, Big Tech and Other Issues
South Korea, one of the initial countries to begin U.S. Trade Talks in April when both sides agreed to create a package to remove tariffs. But it now wants an extension of the 90-day suspension on 25% tariffs that is set to expire July 9. South Korean officials claim that the trade talks between South Korea, its second largest trading partner, and the United States have focused on non-tariff barriers. The Asian country already imposes almost zero tariffs on U.S. imported goods under a free-trade agreement. Here are some of the problems that have been raised in relation to negotiations: DIGITAL SERVICES Yeo Han Koo, South Korea's Trade Minister, said that the digital sector was one of the key areas in the ongoing tariff negotiations. The government has several legislative proposals that President Lee Jae Myung pledged to implement to combat abuses of dominance of the market and protect smaller businesses. In a July 1 letter, U.S. In a letter dated July 1, U.S. Kim Nam-geun, a lawmaker from the Democratic Party, said that South Korea's ruling parties is trying to "slow" down antitrust laws on tech giants such as U.S.-based Google and Apple, Facebook, and Korea's Naver, and Kakao. This is due to trade issues and their sensitivity. NETFLIX and GOOGLE MAPS The U.S. Foreign Trade Barriers Report released in March also noted South Korea's requirement that content providers such as Netflix pay network usage fees, and the restrictions placed on Google and other suppliers to export location-based data. South Korea had previously rejected Google's 2016 request to use detailed maps on servers located outside of the country due to security concerns with North Korea. Seoul will rule on Google’s new request for location-based data by August 11. Apple is also said to have made a similar demand on maps. BEEF, APPLES South Korea's Trade Minister said that Washington wants better access to the agricultural, automotive and digital sectors in ongoing negotiations. South Korea, which is the largest buyer of U.S. Beef in the world, has restricted imports from older animals, citing fears over mad cow disease. The U.S. has also requested market access for other agricultural products, such as apples and potatoes. After earlier negotiations in 2007, where Seoul agreed to reduce beef tariffs by 0% to 2026 as part of a bilateral trade agreement, there is some concern in the domestic market about further opening up. Director Chang Sung Gil said that the trade ministry would emphasize the sensitive nature of the agricultural sector during negotiations. Farmers' groups were present at a hearing held on 30 June to protest. According to a South Korean senior official, the tariff on rice imported from South Korea of over 500%, highlighted by U.S. president Donald Trump during a speech, was not discussed at working level. Foreign Exchange, Defence Costs Officials have stated that the issues of foreign exchange and cost sharing for approximately 28,500 U.S. soldiers in South Korea is being discussed through separate channels, including finance and defence. INVESTMENTS Officials in charge of trade have stressed that industrial cooperation will help to revitalize the U.S. manufacturing industry and reduce the U.S. Trade Deficit. Trade Minister Yeo stated that South Korea is a leader in artificial intelligence (AI), chips, batteries and cars. ALASKA LIGNA PROJECT Officials in South Korea have cautioned against participating in the Alaskan gas project, despite their desire to increase energy purchases. The U.S. will only release technical information in later years. (Reporting and editing by Ed Davies, Saad Sayeed and Jihoon Lee)
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Gold drops on trade deal progress and tariff reprieve extensions
Gold prices fell on Monday as U.S. president Donald Trump announced progress on several trade agreements, and extended tariff exemptions for a number of countries. This dampened demand for this safe-haven precious metal. By 0232 GMT, spot gold had fallen 0.6% to $3314.21 an ounce. U.S. Gold Futures fell 0.6% to $3322. Trump announced on Sunday that the U.S. will be finalising a number of trade agreements within the next few days, and will notify the other countries about higher tariff rates before July 9. The higher rates are scheduled to come into effect in August 1. Trump announced a 10% tariff as a base on the majority of countries in April, with additional duties up to 50%. Later, he delayed the date of implementation for all tariffs except 10% until July 9, 2018. The new date gives most nations affected a three-week reprieve. Kelvin Wong, senior market analyst at OANDA, said: "This short term reprieve by the U.S. is causing the intraday weakness of the gold price in this moment." The top side will come in at $3.360 as a short-term support. Federal Reserve rate cuts are expected to be slower due to concerns about tariff-driven inflation. The rate futures market shows that traders are no longer expecting a Fed cut this month, and they only expect two quarter-point cuts by year's end. Trump signed a massive tax and spending package at the White House last week. According to unbiased analysis, this will add over $3 trillion to the $36.2 trillion national debt. Silver spot fell by 0.8%, to $36.61 per ounce. Platinum dropped 0.8%, to $1380.55, and palladium was down 1%, at $1123.31. (Reporting and editing by Sherry Phillips, Subhranshu Sahu and Anmol Choubey from Bengaluru).
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Iron ore futures fall on China steel production curbs and trade uncertainty
Iron ore futures fell on Monday, as new concerns about demand pressured the market. This was due to output restrictions at China's main steel production hub Tangshan. As of 0219 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was down by 0.68% to 731 yuan (US$101.96) per metric ton. The benchmark iron ore for August on the Singapore Exchange fell 0.1%, to $95.75 per ton. Tangshan Baochun Data, a provider of information in Tangshan City in northern China, posted a message on its WeChat page on Saturday. The note stated that steelmakers were given notices for production controls related to environmental protection. Tangshan Baochun, a local mill, said that some mills had undertaken maintenance work on their sintering machinery. Analysts noted that this move was expected to reduce demand for iron ore. ANZ analysts noted in a recent note that the markets are also on edge, as the deadline for U.S. trade agreements approaches. Donald Trump, the U.S. president, said on Sunday he was close to finalizing a number of trade agreements. He will inform other countries by July 9 that higher tariffs are coming into effect in August. Malaysia announced over the weekend that it had imposed anti-dumping provisional duties of between 3.86% and 57.90%, among other things, on certain imports of iron and steel from China. Iron ore prices have been held back by the strong steel margins and the resilient demand in near-term. Data from Mysteel revealed that despite signs of a slowdown, the average daily hot metal production, which is a measure of iron ore consumption, was still at 2,41 million tons as of July 3. This was higher than it had been a year earlier, and despite signs of a softening. Coking coal and coke, the other steelmaking ingredients, also recorded losses. The benchmarks for steel on the Shanghai Futures Exchange have fallen. Rebar fell 0.45%, Hot-rolled Coil dropped 0.59% and Wire Rod fell 0.81%. Stainless Steel lost 0.51%.
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Sources say that Nissan is considering Foxconn's EV production to save Oppama
Two people with knowledge of the situation said that Japan's Nissan Motor has been in discussions to allow Taiwan Foxconn use one the automaker's domestic plants to build electric cars. This could prevent the closure of the plant. In May, it was reported that Nissan considered closing its Oppama factory in Yokosuka, a port city south of Tokyo. Ivan Espinosa, the CEO of Nissan, announced massive restructuring plans to turn around its struggling automaker. These included closing seven out of Nissan's seventeen factories worldwide and cutting 15% off its workforce. The people, who declined to be named, said that allowing Foxconn to manufacture its own EVs in Oppama would prevent the closure of the plant, and reduce the impact of the restructuring on Oppama's 3,900 workers and suppliers. Nikkei, a Japanese business newspaper published the first report on this discussion late Sunday. Nissan said in a press release that the Nikkei article was not based upon information provided by the automaker. Foxconn did not reply to our request for comment. In May, Nissan’s junior partner Mitsubishi Motors and a Foxconn subordinate signed an agreement for the Taiwanese company to provide it with an electric vehicle model. (Reporting and writing by Maki Shraki, David Dolan, David Goodman, Christopher Cushing).
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Copper prices drop amid uncertainty about US trade talks
The Shanghai Futures Exchange (SFE) and London Metal Exchange (LME) saw copper prices fall on Monday due to concerns about U.S.-China trade negotiations, and the uncertainty around potential tariffs before President Trump's deadline of July 9. The LME's three-month contract for copper fell by 0.31% at $9,834 a metric ton as of 0103 GMT, and the SHFE's most traded contract lost 0.91%, to 79440 yuan (about $11,088.00). Donald Trump, the President of the United States, said that the U.S. was close to finalising a number of trade agreements. He will inform about a dozen other countries on Monday that they can expect higher tariffs to be implemented on August 1. ANZ reported that "Markets are worried about Trump's policies, which could cause a global slowdown and harm demand for industrial commodities." A Shanghai-based metals analyst from a futures firm said that "copper prices are expected to soften due to the recent rise in copper stocks on LME and SHFE and the diminished consumption enthusiasm as a result of higher prices." Copper inventories By July 4, SHFE-monitored storages had gained for the third week in a row, rising by 3.7% to reach 84,589 tonnes. This is 73.7% less than the previous year. Total Copper Stocks The LME registered warehouses saw a rise of 5% in four days, up to Friday. SHFE nickel dropped 1.05%, to 121.190 yuan per ton. Zinc fell 0.83%, to 22.165 yuan. Tin fell 0.82%, to 266,770. Yuan. Aluminium fell 0.68%, to 20,500. Yuan. Lead fell 0.29%, to 17.220. LME nickel fell 0.36% to $16,235 per ton. Zinc eased 0.24% at $2,717.5. Lead slid 0.17% at $2,055, and tin rose 0.07% at $33,725. Click or to see the latest news in metals, and other related stories. Data/Events (GMT 0600 Germany Industrial Production MM, Production Year-on-Year SA May 0600 Halifax House Prices UK MM,YY June 0645 France Total Reserve Assets June ($1 = 7,1645 Chinese Yuan) (Reporting and Editing by Sumana Niandy; Reporting by Hongmei LI)
Reeves, UK's Reeves, announces National Wealth Fund Investment in Carbon Capture
The British Finance Minister Rachel Reeves announced on Monday that the National Wealth Fund will invest 39 million pounds (28.6 million pounds) in a project to capture carbon emissions, which could lead to new jobs in northern and central England.
Last year, Britain announced that it would invest up to 21,7 billion pounds in 25 years for the development of carbon capture and storage project to reduce emissions from industry and to create new jobs.
Britain has set a target of achieving net zero emissions in 2050. CCS is needed to reduce emissions from industrial sectors that are energy intensive.
Reeves, in a statement released by her ministry, will celebrate the funding on Monday as the first step toward the development of a pipeline for carbon capture between British cement and lime firms located in Britain's Peak District. The pipeline will store emissions beneath the Irish Sea.
Reeves, in a press release, said that the National Wealth Fund was a force of growth. It invested 3 billion pounds to boost the British economy.
"We are modernising the cement, lime and lime-based industries, providing vital carbon capture infrastructure, and creating jobs in Derbyshire, Staffordshire and North West, to put more money in the pockets of working people."
Reeves, along with the rest of Keir-Starmer's Cabinet, are eager to demonstrate what the Labour Government is doing to transform Britain. They have announced new projects to do so after having been forced to make a series embarrassing U turns and to deal with a rebellion within the Labour Party over welfare reforms. These have raised concerns about the government's ability to reduce spending and party control.
(source: Reuters)