Risk appetite has remained firm across global equities this week, with NASDAQ hitting a fresh record high overnight and S&P 500 and DOW also closing in the green. These gains followed similar moves in Europe, where Germany’s DAX notched another record. However, the mood in Asia has been less upbeat. Japan’s Nikkei slipped into negative territory, pressured by concerns over US tariffs. The 25% duty imposed on Japanese goods has clearly weighed on sentiment, contrasting with the broader global resilience. In the currency markets, price action has been more muted. Dollar remains the strongest major currency for the week, but it's beginning to show signs of a near-term reversal. The latest FOMC minutes revealed a deeply divided committee, with some members focused on rising inflation risks while others remain concerned about a weakening labor market and activity — a classic reflection of stagflation worries. This policy split is understandable, given the uncertain economic impact of tariffs and how they could simultaneously push prices higher while dampening demand. Outside Dollar, the Swiss Franc and Aussie are gaining ground, eyeing a takeover in relative strength rankings. Yen is the weakest, hurt by tariffs. Kiwi and Loonie are also underperforming, while Euro and pound are stuck in the middle. On the trade front, tensions escalated further. US President Donald Trump informed Brazil that its “reciprocal” tariff would rise from 10% to 50% effective August 1, citing national security concerns and referencing Brazil’s handling of former President Bolsonaro’s prosecution. Brazilian President Luiz Inácio Lula da Silva pledged to respond in kind, invoking a new economic reciprocity law that permits countermeasures. Lula’s strongly worded response emphasized Brazil’s sovereignty and refusal to accept external pressure. Trump also confirmed a new 50% tariff on all US copper imports starting August 1, citing a Section 232 national security review. The move sent copper prices sharply higher, though near-term technicals suggest the rally may be losing steam. Meanwhile, US–EU negotiations are ongoing, with reports of potential compromises on auto tariffs through quota limits, tariff reductions, or credit systems aimed at shielding European carmakers...... |
