Weekly Economic Briefing: June 29, 2025

⚠️ Disclaimer: This content represents personal views based on publicly available economic indicators. All investments should be made based on your own judgment and responsibility.

https://edition.cnn.com/2025/06/27/business/trump-breaks-off-canada-trade-talks

Global Market Overview: Optimism Amid Uncertainty

As of June 29, 2025, global financial markets maintained stability with an upward trend, driven by progress in U.S.-China rare earth trade negotiations and easing tensions in the Middle East. However, new risks have emerged, including the U.S. Senate’s massive domestic policy package (which includes tax hikes on solar, battery, geothermal, wind, and nuclear projects) and the suspension of U.S.-Canada trade talks due to Canada’s digital services tax. These developments are likely to increase market volatility. Below, we analyze the latest economic indicators and market trends across key countries and provide a forward-looking outlook.

1. Key Country Updates

United States

The U.S. stock market saw the S&P 500 rise by 0.5%, hitting an all-time high, fueled by progress in U.S.-China trade talks and expectations of Federal Reserve rate cuts. However, controversy over the Senate’s domestic policy package has heightened market uncertainty. Elon Musk sharply criticized the bill as “utterly insane and destructive,” warning that tax hikes on solar and battery projects could harm future-focused industries like Tesla. The bill also includes new subsidies for coal used in steel production. Fed Chair Jerome Powell suggested that rate cuts could continue if tariff-related inflation pressures ease. May’s Personal Consumption Expenditures (PCE) fell 0.3% year-over-year, raising concerns about slowing consumption, while Q1 GDP growth contracted by 5.1%, underperforming expectations. The 10-year Treasury yield rose slightly to 4.26%, and the dollar index dropped 1.5% to 97.3.

Canada

Canada’s introduction of a 3% digital services tax targeting companies like Amazon, Google, and Meta has led to the suspension of trade talks with the U.S. President Trump called it a “direct attack” on the U.S., announcing the termination of talks and threatening tariffs within seven days. As a major supplier of U.S. crude oil (60%), electricity (85%), steel, aluminum, and uranium, Canada faces significant economic risks from potential tariffs. Canadian Prime Minister Mark Carney expressed willingness to continue negotiations, but Trump indicated talks could resume if the tax is repealed. Canada’s stock market is expected to face increased volatility.

Japan

The Nikkei 225 rose 1.43% to 40,151, and the TOPIX gained 1.2% to 1,340, reaching multi-month highs. News of a potential U.S. tariff deadline extension improved global sentiment, driving gains. Stocks like Disco (+7.5%), Tokyo Electron (+1.43%), and Mitsubishi Heavy Industries (+1.27%) led the rally. Japan’s 10-year government bond yield rose to 1.43%, signaling potential rate hikes by the Bank of Japan (BOJ). With inflation exceeding the 2% target, the BOJ plans to gradually reduce bond purchases. The yen remained stable at 144.3 against the dollar.

China

The Shanghai Composite saw a slight decline, reflecting weekly weakness. Despite progress in U.S.-China rare earth talks, May industrial production fell 9.1% year-over-year, raising concerns about economic slowdown. China’s 10-year government bond yield dropped to 1.64%, reflecting a cautious market stance. While the rare earth export agreement is positive, uncertainty persists due to a lack of detailed terms.

South Korea

The KOSPI fell 0.77% to 3,056, pressured by profit-taking from foreign and institutional investors. LG Energy Solution (-0.8%), SK Hynix (-0.3%), and Hanwha Aerospace (-4.2%) declined. Despite global optimism and easing Middle East tensions, U.S.-Canada trade friction could indirectly impact South Korea’s export-driven economy. The Bank of Korea is advancing won-based stablecoin development to challenge the dollar-dominated stablecoin market.

United Kingdom

The FTSE 100 rose 0.5%, recovering from weekly weakness. A positive outlook from Nike boosted JD Sports by 7%, driving index gains, while banks (Standard Chartered, Barclays, HSBC) and Rolls-Royce (+1.7%) also performed strongly. The UK 10-year gilt yield fell below 4.5%, signaling potential rate cuts by the Bank of England (BOE).

Brazil

The Ibovespa index dipped 0.2% to 136,866, with fiscal uncertainty from the abolition of additional IOF taxes weighing on sentiment. Petrobras (-1%) and Ambev (-1% to -1.5%) saw declines. Brazil’s 10-year bond yield fell to 13.9%, but fiscal sustainability concerns persist.

2. Commodities Trends

• Oil: Easing Middle East tensions kept WTI crude futures stable at approximately $64.5 per barrel (estimated). OPEC+’s spare production capacity alleviated supply concerns.
• Gold: Gold prices dipped slightly but remained stable as global uncertainty eased.
• Copper: Copper prices weakened due to slowing Chinese demand but showed potential for a rebound amid trade progress.
• Soybeans and Steel: Soybeans held steady with stable global supply, while steel weakened due to China’s declining industrial production.

3. Other Developments

• Cryptocurrencies: Bitcoin (BTC) reached $107,416, with corporate adoption accelerating. Norway’s Green Minerals AS announced a $1.2 billion Bitcoin purchase plan, and South Korea is developing a won-based stablecoin. USDC surged 750% since its listing, driving payment innovation.
• Stablecoins: The $239 billion stablecoin market saw attention with Coinbase and Shopify’s USDC payment partnership and Visa/Mastercard’s multi-token network support. The U.S. strengthened stablecoin regulation through the GENIUS Act.

Outlook: Navigating Complex Risks

1. Trade and Geopolitical Risks

The U.S.-Canada trade talk suspension and Senate bill controversy are increasing market uncertainty. Canada’s digital services tax imposes a $2 billion cost on U.S. tech firms, and potential tariffs could disrupt Canada’s exports (80% U.S.-bound). U.S.-China rare earth talks are positive but lack clarity.

2. Monetary Policy and Interest Rates

The Fed and BOE’s potential rate cuts are driving bond yield declines. The BOJ is considering rate hikes as inflation exceeds its 2% target, while Brazil’s fiscal uncertainty keeps bond yields low.

3. Sectoral Impacts

The Senate’s tax hikes could negatively affect solar, battery, and other future-focused industries. Tesla’s stock fell 14% following Musk’s criticism, reflecting volatility. Coal subsidies may provide short-term benefits to traditional industries.

Investment Strategies

• Equities: S&P 500 ETF (SPY) and Nikkei ETF (EWJ) have upside potential due to trade progress. KOSPI ETF (EWY) may see short-term corrections but monitor tech stock rebounds. Tesla remains volatile amid policy debates.
• Bonds: U.S. (TLT) and UK 10-year bonds are stable with rate cut expectations.
• Cryptocurrencies: Bitcoin (BTC) and USDC show long-term growth potential. Consider ETFs (BITO) and stablecoin-related stocks.
• Commodities: Stable oil prices support energy ETFs (XLE) in the short term, but hedge against Middle East and trade risks.

Conclusion

Global markets remain optimistic due to trade progress and easing geopolitical tensions, but U.S.-Canada trade friction and the Senate’s policy package are increasing uncertainty. Investors should maintain a balanced portfolio of equities, bonds, and cryptocurrencies while closely monitoring oil prices and interest rate movements.

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