Economic News for July 19, 2025

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

https://www.cnbc.com/2025/07/18/trump-trade-eu-tariffs-ft.html

Global Market Overview: Mixed Trends Amid Trade Uncertainty

As of July 19, 2025, global financial markets are showing mixed performance due to heightened trade uncertainties surrounding President Trump’s intensified tariff policies and the looming August 1 deadline for trade negotiations. The proposed 15-20% minimum tariffs on the European Union and a 93.5% anti-dumping tariff on Chinese graphite are emerging as new variables affecting global supply chains. Meanwhile, a rising U.S. consumer confidence index and declining inflation expectations (4.4%) provide positive signals, but central banks worldwide remain cautious in their policy directions.

1. Stock Market Trends

• United States (S&P 500): The S&P 500 and Nasdaq 100 remained flat near record highs, while the Dow Jones fell 142 points, dragged down by a 2.2% drop in American Express. Despite strong earnings, Netflix fell 5.1%, whereas Charles Schwab rose 3% on robust results, and Chevron gained 1% after completing its Hess acquisition. On a weekly basis, the S&P 500 rose 0.5%, and the Nasdaq gained 1.4%.

• Japan (Nikkei 225): The Nikkei 225 closed 0.2% lower at 39,819 points, retreating from a two-week high. Cautious investor sentiment ahead of the weekend’s upper house election and uncertainties in U.S.-Japan trade negotiations weighed on the market. Tech stocks like Sony Group (-1.9%) and Disco (-8.8%) led declines, but the index posted a 0.4% weekly gain.

• China (Shanghai Composite): The Shanghai Composite rose 0.7% to 3,535 points, hitting a multi-month high. China’s crackdown on price competition boosted investor sentiment, but the 93.5% U.S. anti-dumping tariff on Chinese graphite raised concerns about the EV supply chain. CATL gained 2.2%, continuing a four-week upward trend.

• South Korea (KOSPI): The KOSPI fell 0.13% to 3,188 points, pressured by weakness in financial stocks. Shinhan Financial Group dropped 2.15%, and Samsung C&T plummeted 5.69%. However, a positive note was June’s 11.2% increase in EV exports, marking the first annual gain in 16 months.

• United Kingdom (FTSE 100): The FTSE 100 rose for two consecutive days, approaching 9,000 and recording a four-week winning streak. BP gained 0.8% after announcing the sale of its U.S. onshore wind business, and mining stocks rallied due to rising iron ore prices. Burberry surged 5.8% on better-than-expected earnings, but GSK fell over 4% after failing to secure approval for a cancer treatment.

• Germany (DAX): The DAX fell 0.3% to 24,290 points, weighed down by uncertainties in EU-U.S. trade talks. Healthcare stocks like Sartorius and Siemens Healthineers, as well as automakers Mercedes-Benz and Porsche, dropped around 1%. SAP also fell 0.7% ahead of its upcoming earnings report.

• Brazil (Bovespa): The Bovespa plunged 1.6% to 133,355 points, hit by trade war concerns and domestic political turmoil. Export-dependent companies like Petrobras (-1.7%) and Embraer (-3.2%) were hit hard, while Santander Bank fell 4.5%. The index recorded a 2.1% weekly loss.

• India (BSE Sensex): The BSE Sensex fell 520 points to 81,735, hitting a four-week low. Banking, financial, real estate, and tech stocks weakened, with Axis Bank dropping 4.5% due to rising bad loans. A 0.9% weekly decline is expected, marking three consecutive weeks of losses.

2. Commodity Trends

• Oil: WTI crude futures fell 0.3% to $67.3 per barrel, posting a 1% weekly decline. Mixed U.S. economic data offset concerns over new EU sanctions on Russian energy exports. The EU’s 18th sanctions package, banning Russian refined oil products, pushed diesel futures prices higher, driving refining margins to a multi-month peak.

• Gold: Gold traded near $3,340 per ounce, marking its first weekly decline in three weeks. Strong U.S. economic data, including a sharp rebound in June retail sales and a three-month low in weekly jobless claims, reduced expectations for aggressive Fed rate cuts. However, President Trump’s tariff plans for over 150 countries and geopolitical tensions supported safe-haven demand.

• Copper: U.S. copper futures held at $5.55 per pound, maintaining levels after spiking to $5.7 on July 8 following the announcement of a 50% tariff effective August 1. The premium between U.S. and LME copper prices hit a record 25%, with supply shortage concerns persisting due to limited domestic refining capacity.

• Soybeans: Soybean futures broke above $10.20 per bushel, reaching a one-week high. Export sales for the 2025-26 crop year reached 529,600 tons for the week of July 10, far exceeding estimates (150,000-400,000 tons), driven by rising demand from Indonesia and China.

• Steel: Chinese steel futures held at 3,100 yuan per ton, a two-month high. Expectations of reduced supply, driven by China’s efforts to address overcapacity and Baosteel’s forecast of a 50-million-ton annual production cut, combined with a three-month high in June’s construction PMI, supported the rally.

• Wheat: Wheat futures rose above $5.40 per bushel, buoyed by a weaker dollar and short-covering. U.S. winter wheat harvests are progressing smoothly, with spring wheat crop surveys next week expected to influence market direction.

3. Bond Market Trends

• U.S. 10-Year Treasury Yield: Fell slightly to 4.44%, driven by improved consumer confidence from the University of Michigan survey and lower short- and long-term inflation expectations. Despite Fed Governor Waller’s support for a July rate cut, markets expect rates to hold steady in July, with 25bp cuts anticipated in September and December.

• Japan 10-Year Government Bond Yield: Dropped for three consecutive days to 1.55%. June headline inflation slowed from 3.5% to 3.3% but remained above the BOJ’s 2% target for 39 consecutive months, sustaining expectations of tighter monetary policy. The 25% U.S. tariff set for August 1 adds further pressure.

• China 10-Year Government Bond Yield: Stabilized at 1.66% after two days of declines. Q2 GDP growth of 5.2% exceeded expectations but slowed from Q1’s 5.4%, while a surge in June yuan loans exerted upward pressure on yields. Fragile U.S.-China trade truce adds to uncertainty.

• South Korea 10-Year Government Bond Yield: Fell 0.02% to 2.88%, down 0.01% monthly and 0.28% annually.

• Germany 10-Year Bund Yield: Rose above 2.7%, nearing a three-month high. President Trump’s 30% tariff threat on the EU, combined with accelerating inflation in the U.S. and U.K., reduced expectations for rate cuts by the Fed and Bank of England.

• U.K. 10-Year Gilt Yield: Hit a six-week high of 4.668%. Despite a softening labor market, June inflation rose to 3.6%, above the expected 3.4%, raising concerns that the Bank of England may delay rate cuts.

• Brazil 10-Year Government Bond Yield: Dropped to a yearly low near 13.8%, driven by improved May fiscal balances, confidence in monetary policy following a Selic rate hike to 15%, and capital inflows from Fed rate cut expectations.

• India 10-Year Government Bond Yield: Held near a one-month low at 6.3%. June CPI inflation fell to a six-year low of 2.1%, raising expectations for further monetary easing by the Reserve Bank of India, with at least one additional 50bp rate cut expected by year-end.

4. Currency Trends

• U.S. Dollar: The dollar index fell below 98.3, nearing a four-week low. Fed Governor Waller’s support for a July rate cut and a drop in inflation expectations (5% to 4.4%) from the University of Michigan survey weakened the dollar. However, strong June jobs data led to a 0.4% weekly gain.

• Japanese Yen: The yen rebounded to 148 per dollar after a sharp drop. June inflation slowed to 3.3% but remained above the BOJ’s 2% target for 39 months, supporting expectations of tighter policy. The 25% U.S. tariff set for August 1 and the July 20 upper house election are key factors.

• Chinese Yuan: The offshore yuan weakened to 7.18 per dollar, continuing a two-week decline. Q2 GDP growth beat expectations but slowed from Q1, with weak retail sales and disappointing investment data highlighting uneven domestic recovery. Fragile U.S.-China trade dynamics further pressured the yuan.

• South Korean Won: The won held near a May low of 1,390 per dollar. Weak May retail sales, stagnant construction investment, and declining manufacturing output weighed on the currency. Government consumer voucher plans and improving consumer sentiment provide some support.

• British Pound: The pound fell to $1.339, near an eight-week low. Trump’s statement ruling out the ousting of Fed Chair Powell strengthened the dollar, while U.K.’s June inflation (3.6%) and softening labor market complicated the Bank of England’s policy outlook.

• Euro: The euro dropped to $1.16, a one-month low. Trump’s 30% tariff threat on the EU, mixed with signals of negotiation willingness, combined with expectations of an ECB rate hold next week and a further 25bp cut by year-end, weighed on the currency.

• Brazilian Real: The real weakened past 5.5 per dollar, hitting a one-month low. Trump’s 50% tariff on Brazilian exports and a 35% tariff threat on Canada fueled fears of prolonged trade disputes. June inflation of 5.35%, well above the 3% target, and a fixed 15% Selic rate constrained easing expectations.

• Indian Rupee: The rupee hit a three-week low near 85.7 per dollar. India has yet to receive formal U.S. tariff notices, with ongoing talks on auto parts, steel, and agricultural products. June CPI inflation falling to 2.1% supported expectations for further rate cuts, providing some support to the rupee.

Outlook: Selective Approach Needed Amid Trade Policy Uncertainty

1. Trade War Risks and Accelerated Supply Chain Realignment

The August 1 deadline for multilateral trade talks remains the biggest variable for the global economy. Trump’s 15-20% minimum tariff demand on the EU and 93.5% anti-dumping tariff on Chinese graphite are expected to accelerate EV supply chain realignment. The 25% premium in U.S.-LME copper prices signals potential fragmentation in global commodity markets. In the short term, expect detour exports and inventory buildup to avoid tariffs; in the medium to long term, fundamental supply chain restructuring is anticipated.

2. Diverging Monetary Policies and Rising Currency Volatility

Central banks’ policy directions are increasingly divergent. The Fed’s projected rate cuts in September and December contrast with the Bank of Japan’s likely continuation of tightening due to 39 months of above-target inflation. Brazil’s 5.35% inflation necessitates prolonged 15% rates. This policy divergence is expected to amplify currency volatility, particularly for emerging market currencies.

3. Sector-Specific Strategies

Energy: The EU’s tightened sanctions on Russian energy have driven refining margins to multi-month highs, while Chevron’s Hess acquisition strengthens U.S. energy firms’ competitiveness. Stable oil prices around $67 offer selective investment opportunities in the energy sector despite trade risks.

Technology: U.S. tech stocks remain resilient, while China’s crackdown on price competition boosts profitability expectations for Chinese tech firms. However, graphite tariffs pose risks to the EV battery supply chain, warranting close attention to corporate strategies.

Financials: Financial stocks show mixed trends. Brazil’s 15% rates support bank net interest margins but carry economic slowdown risks. Korean financials may face prolonged weakness due to delayed domestic recovery.

Conclusion

As of July 2025, the global economy faces dual challenges of trade policy uncertainty and diverging monetary policies. With the August 1 trade negotiation deadline approaching, market volatility is likely to increase, necessitating a higher allocation to safe-haven assets and selective investments in sectors benefiting from trade disputes. In the medium to long term, portfolio restructuring to prepare for structural changes in supply chains is advisable.

Keywords: Trade war, tariff policy, monetary policy divergence, supply chain realignment, inflation expectations, currency volatility, energy sector, copper tariffs, EV battery, central bank policy, emerging market currencies, U.S. economic indicators