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Donald Trump continued his tariff reveals over the weekend, announcing that the EU and Mexico would be hit with 30% tariffs from August 1st. That’s far more than what the EU expected — they were hoping for a figure closer to what the UK secured: a 10% tariff, with exceptions for key sectors like metals and pharmaceuticals. Instead, they got a big, fat 30%.

Trump did leave the door open for further negotiations and some fine-tuning, but given the level of tariffs unveiled since last week, you have to wonder whether it’s worth the time and energy to negotiate with a government that appears to have lost the plot — or if it's better to pursue other deals with other nations. That’s what the Europeans are now discussing: finding new friends.

So, US and European futures are in the red this morning. DAX futures are the hardest hit as of writing — down 0.60%, while FTSE futures are flat. It’s becoming increasingly clear that the UK will be one of the rare privileged partners to retain 10% tariff access to US markets. But even that doesn’t seem to help much.

Friday’s UK production and growth figures were weak: GDP declined for the second month, and both industrial and manufacturing production dropped more than expected, dragged down by rising energy prices, property taxes, and trade uncertainty. This sent Cable below the 1.35 level, which also coincides with the 50-day moving average. Trend and momentum indicators in sterling remain firmly negative, reflecting weakening growth expectations and a shrinking fiscal headroom — pointing to higher taxes and lower spending, both of which are growth-negative. As such, the EURGBP is also marching higher, targeting the 88–89 cents range in the next three months.

Zooming out, the US dollar starts the week weaker, with renewed trade tensions limiting dollar appetite. However, the USDJPY is pushing higher, as political uncertainty in Japan is weighing more heavily than dollar softness. Japanese yields are once again under solid upside pressure this morning ahead of Sunday’s Upper House elections. Investors worry that if the LDP retains its majority, it will proceed with ample fiscal spending to support the economy, including a possible consumption tax cut. Remember, the Japanese pension funds and insurers are among the biggest buyers of US Treasuries, and rising Japanese yields could encourage them to repatriate funds back to Japan, potentially impacting global flows and causing volatility in global bond and stock markets.

In China, the new week begins with some encouraging data: exports rose 5.8% in May, beating expectations of 5%, partly thanks to partial tariff relief with the US. The CSI 300 looks better, while the Hang Seng Index is approaching its 2025 highs. If China can leverage US weakness to repair global relations, it could be a win for Beijing.

“But note that tensions between the EU and China are rising, as Europeans accuse China of undermining their industries — because they can’t match Chinese prices. There is, of course, a structural reason: basic salaries on a Chinese production line range from $500–800/month, while a similar worker in Germany may earn €2,500–3,000, €1,000–1,500 in Southern Europe, and around €600 in Bulgaria. But lower labour costs often come with capacity constraints. China has earned its ‘factory of the world’ status over the last two to three decades, and shifting that dynamic — by reshoring jobs to Europe or the US — would dent Western purchasing power with a structurally higher inflation and also weaker central bank support.

Anyway, the EURUSD is slightly better bid this morning on the back of a softer dollar. Interestingly, 30% tariffs on EU goods should, in theory, dampen euro demand, but the dollar’s weakness is dominating the narrative for now — not euro strength.

Elsewhere, gold is no longer reacting positively to trade turmoil, while silver is catching up on dollar softness, trading at $39/oz. Meanwhile, Bitcoin is extending its rally to fresh records, pushing above $120K this morning. It’s now back in overbought territory, suggesting that a correction to the $105K–$110K range wouldn’t be surprising. Still, the rally is underpinned by a crypto-friendly US policy shift and growing emerging market adoption — both remain intact.

This week, investors will keep an eye on trade news and shift focus to earnings, with big US banks and Netflix reporting Q2 results. Meanwhile, US and UK inflation figures will offer more insight into how tariffs and fiscal policies are feeding into prices. It's shaping up to be a busy week.

Daily Pivots: (S1) 0.6558; (P) 0.6576; (R1) 0.6596; More...

Intraday bias in AUD/USD is turned neutral first with current retreat. Some consolidations would be seen but further rise is expected as long as 0.6484 support holds. Above 0.6594 will resume the rally from 0.5913 and target 0.6713 fibonacci level.

In the bigger picture, there is no clear sign that down trend from 0.8006 (2021 high) has completed. Rebound from 0.5913 is seen as a corrective move. While stronger rally cannot be ruled out, outlook will remain bearish as long as 38.2% retracement of 0.8006 to 0.5913 at 0.6713 holds. Nevertheless, considering bullish convergence condition in W MACD, even in case of another fall through 0.5913, downside should be contained above 0.5506 (2020 low).

Daily Pivots: (S1) 1.3651; (P) 1.3691; (R1) 1.3730; More...

Intraday bias in USD/CAD remains neutral at this point. Overall, price actions from 1.3538 are seen as a corrective pattern, which is now in its third leg. Stronger rise could be seen and above 1.3728 will target 1.3797 resistance and probably above. On the downside, break of 1.3637 minor support will bring retest of 1.3538/55 support zone.

In the bigger picture, price actions from 1.4791 medium term top could either be a correction to rise from 1.2005 (2021 low), or trend reversal. In either case, further decline is expected as long as 1.4014 resistance holds. Next target is 61.8% retracement of 1.2005 (2021 low) to 1.4791 at 1.3069.

Daily Pivots: (S1) 0.9300; (P) 0.9314; (R1) 0.9327; More....

Intraday bias in EUR/CHF remains neutral at this point. On the upside, break of 0.9428/45 resistance zone will resume the rebound from 0.9218. On the downside, firm break of 0.9260 will bring retest of 0.9218 low instead.

In the bigger picture, while downside momentum has been diminishing as seen in W MACD, there is no sign of bottoming yet. EUR/CHF is still staying below 55 W EMA (now at 0.9437) and well inside long term falling channel. Outlook will stay bearish as long as 0.9660 resistance holds. Break of 0.9204 (2024 low) will confirm resumption of down trend from 1.2004 (2018 high).

Daily Pivots: (S1) 0.8627; (P) 0.8647; (R1) 0.8685; More...

Intraday bias in EUR/GBP stays neutral and more consolidations could be seen below 0.8668. Further rise is expected as long as 0.8573 resistance turned support holds. Above 0.8668 will resume the rally from 0.8354 to retest 0.8737 high.

In the bigger picture, the structure from 0.8221 medium term bottom are not impulsive enough to suggest that it's reversing the down trend from 0.9267 (2022 high). But even if it's a correction, firm break of 0.8737 will still pave the way to 61.8% retracement of 0.9267 to 0.8221 at 0.8867.

Daily Pivots: (S1) 1.7729; (P) 1.7766; (R1) 1.7812; More...

Intraday bias in EUR/AUD remains mildly on the upside for the moment. Sustained trading below 55 D EMA (now at 1.7694) will argue that corrective pattern from 1.8554 is already in the third leg. Deeper fall should then be seen back to 1.7245 support. Nevertheless, strong rebound from 55 D EMA will maintain near term bullishness. Break of 1.7872 support turned resistance will bring retest of 1.8094 resistance.

In the bigger picture, price actions from 1.8554 medium term are seen as a corrective pattern. While deeper pullback might be seen, downside should be contained by 38.2% retracement of 1.4281 (2022 low) to 1.8554 at 1.6922 to bring rebound. Up trend from 1.4281 is expected to resume at a later stage.

Daily Pivots: (S1) 198.28; (P) 198.86; (R1) 199.48; More...

GBP/JPY is staying in consolidations below 199.80 and intraday bias remains neutral for the moment. While deeper retreat cannot be ruled out, further rise is expected as long as 195.33 support holds. On the upside, break of 199.80 will resume the rally from 184.35 and target 100% projection of 180.00 to 199.79 from 184.35 at 204.14.

In the bigger picture, price actions from 208.09 (2024 high) are seen as a correction to rally from 123.94 (2020 low). The pattern might still extend with another falling leg. But in that case, strong support should be seen from 38.2% retracement of 123.94 to 208.09 at 175.94 to contain downside. Meanwhile, decisive break of 208.09 will confirm long term up trend resumption.

Daily Pivots: (S1) 171.25; (P) 171.84; (R1) 172.87; More...

Intraday bias in EUR/JPY remains on the upside for the moment. Current rally from 154.77 should target 138.2% projection of 154.77 to 164.16 from 161.06 at 174.03. On the downside, below 170.78 support will turn intraday bias neutral and bring consolidations first.

In the bigger picture, price actions from 175.41 (2024 high) are seen as correction to up trend from 114.42 (2020 low). The pattern might still extend with another falling leg. But in that case, strong support should be seen from 38.2% retracement of 114.42 to 175.41 at 152.11 to contain downside. Meanwhile, decisive break of 175.41 will confirm long term up trend resumption.

Risk sentiment turned mildly negative in Asia on Monday following US President Donald Trump’s announcement of 30% tariffs on imports from the EU and Mexico, starting August 1. While US futures turned lower, equity markets in Asia were more muted, digesting the move in context of still-holding EU retaliation.

The 30% tariff rate on EU goods was notably harsher than the 20% flagged during Trump’s Liberation Day speech in April. Mexico, by contrast, appears to have secured a better outcome than Canada, reflecting Washington’s preference for selective confrontation. Still, Trump’s broader campaign has swept in dozens of countries with tariff bands ranging from 20% to 50%, highlights a return to maximalist trade pressure.

Market reaction in FX was largely subdued, though defensive positioning was evident. Yen outperformed for now, followed by Dollar and Loonie. At the other end, Kiwi and Aussie weakened the most. Euro edged lower but avoided steeper losses after the EU confirmed it would delay its suspended retaliation. Sterling and Swiss Franc are positioning in the middle.

The EU’s initial response has been measured. European Commission President Ursula von der Leyen confirmed Sunday that retaliatory tariffs on EUR 21B worth of US goods—previously suspended—would remain on hold until early August. She condemned the new US action as disruptive but emphasized the EU’s commitment to diplomacy and proportionate response.

Beyond the US-EU front, the trade shock comes amid parallel developments. Von der Leyen announced a political agreement with Indonesia to move forward on a long-stalled free trade deal, signaling that the EU is actively diversifying trade partnerships. While this helps hedge against US hostility, it’s unlikely to blunt short-term disruption. Unless trade talks regain traction, investors may need to brace for more volatility heading into August’s tariff deadline.

Technically, Bitcoin's record run continues today and surges through 120k mark. Near term outlook will stay bullish as long as 116943 support holds. Next target is double projection level at around 135k, 100% projection of 49008 to 109571 from 74373 at 134946 and 100% projection of 74373 to 112013 from 98148 at 135788. Overbought condition will likely cap Bitcoin's upside there.

In Asia, at the time of writing, Nikkei is flat. Hong Kong HSI is up 0.15%. China Shanghai SSE is up 0.33%. Singapore Strait Times is up 0.36%. Japan 10-year JGB yield is up 0.068 at 1.574.

NZ BNZ services rises to 47.3, but outlook remains grim

New Zealand’s services sector showed mild improvement in June, with BusinessNZ Performance of Services Index rising to 47.3 from May’s 44.1. Despite the gain, the index remains well below its long-run average of 52.9 and firmly in contraction territory. Subcomponents showed modest upticks—new orders rose from 43.4 to 48.8, employment edged up from 47.1 to 47.4, and activity/sales climbed to 44.5. Inventories just breached the 50-mark at 50.6.

Still, the broader backdrop remains discouraging. 66.2% of surveyed businesses offered negative comments, citing subdued consumer confidence, elevated living costs, and policy-related uncertainty. Public sector retrenchment, inflation, and rising interest rates continue to bite, while seasonal factors like winter and lower tourist activity weigh on demand. BNZ’s Doug Steel summed it up bluntly: “The timeline for New Zealand’s long-awaited economic recovery just keeps getting pushed further and further out.”

China’s exports growth accelerates to 5.8% yoy in June on tariff truce window

China’s exports rose 5.8% yoy in June, beating expectations of 5.0% yoy and marking a pickup from May’s 4.8% yoy. The improvement comes as exporters moved quickly to take advantage of the 90-day tariff truce with the US, front-loading shipments ahead of anticipated disruptions.

The stronger-than-expected performance helped lift China’s trade surplus to USD 114.8B, slightly above consensus and up from USD 103.2B in May.

Imports rose 1.1% yoy, the first positive reading of the year and a tentative sign of stabilization in domestic demand.

Inflation pulse returns as central banks confront tariff fog

This week brings a renewed test for global central banks as June inflation data from the US, UK, Canada, and Japan takes the spotlight.

After months of progress on disinflation, markets are now asking whether the soft patch has run its course. In the US, headline and core CPI are both expected to tick higher—a shift that could signal the low point in inflation may already be behind us.

Fed, already cautious about premature easing, will be particularly sensitive to any inflation reacceleration. With another round of tariffs set to begin in August, policymakers have little room for missteps. A hotter CPI reading, coupled with incoming PPI and retail sales, could keep the Fed sidelined through summer, especially as recent commentary has leaned toward patience over preemption.

In Canada, after a blowout jobs report, Markets now expect BoC to skip a cut again this month. Unless inflation falls meaningfully below expectations, policymakers may extend the pause into fall. However, with trade risks on the rise, the BoC is unlikely to rule out further cuts altogether.

The UK faces a different dilemma: inflation remains too high, but the economy is weakening. BoE is widely expected to cut rates in August following soft GDP figures. This week’s CPI report is unlikely to derail that plan, but the pace of future cuts could hinge on whether inflation starts to retreat materially. UK labor market data, especially wage growth and unemployment, will also play a key role in shaping expectations.

Japan’s inflation data is unlikely to shake BoJ from its holding stance. Policymakers are much more concerned about the external environment, including the impact of trade frictions on demand and financial flows. Even in the event of a CPI surprise to the upside, BoJ is likely to hold rates steady for the remainder of 2025.

China’s Q2 GDP and trade data, along with Germany’s ZEW sentiment index, round out a week heavy on macro signals.

Here are some highlights for the week:

• Monday: New Zealand BNZ services; Japan machines orders, tertiary industry index; China trade balance; Swiss PPI; Canada wholesale sales.
• Tuesday: Australia Westpac consumer sentiment; China GDP, industrial production, retail sales, fixed asset investment; Germany ZEW economic sentiment; Canada CPI, manufacturing sales; US CPI, Empire State menutacturing.
• Wednesday: UK CPI; Eurozone trade balance; Canada housing starts; US PPI, industrial production, Fed's Beige Book.
• Thursday: Japan trade balance; Australia employment, NAB quarterly business confidence; Swiss trade balance; UK employment; Eurozone CPI final; US jobless claims, retail sales, Philly Fed survey, import prices, business inventories, NAHB housing index.
• Friday: Japan CPI; GErmany PPI; US housing starts and building permits, U of Michigan consumer sentiment and inflation expectations.

EUR/JPY Daily Outlook

Daily Pivots: (S1) 171.25; (P) 171.84; (R1) 172.87; More...

Intraday bias in EUR/JPY remains on the upside for the moment. Current rally from 154.77 should target 138.2% projection of 154.77 to 164.16 from 161.06 at 174.03. On the downside, below 170.78 support will turn intraday bias neutral and bring consolidations first.

In the bigger picture, price actions from 175.41 (2024 high) are seen as correction to up trend from 114.42 (2020 low). The pattern might still extend with another falling leg. But in that case, strong support should be seen from 38.2% retracement of 114.42 to 175.41 at 152.11 to contain downside. Meanwhile, decisive break of 175.41 will confirm long term up trend resumption.

China’s exports rose 5.8% yoy in June, beating expectations of 5.0% yoy and marking a pickup from May’s 4.8% yoy. The improvement comes as exporters moved quickly to take advantage of the 90-day tariff truce with the US, front-loading shipments ahead of anticipated disruptions.

The stronger-than-expected performance helped lift China’s trade surplus to USD 114.8B, slightly above consensus and up from USD 103.2B in May.

Imports rose 1.1% yoy, the first positive reading of the year and a tentative sign of stabilization in domestic demand.