Weekly Economic Briefing, July 13, 2025

 

Weekly Economic Briefing, July 13, 2025

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

https://www.cnbc.com/2025/07/12/trump-tariffs-european-union-eu-mexico-trade.html

Global Market Conditions: Seeking Stability Amid Tariff Risks and Volatility

As of July 13, 2025, global financial markets are experiencing volatility amidst tariff threats from the United States and mixed economic indicators from major countries. In particular, U.S. President Trump's announcement of a 35% tariff on Canadian imports, his hints at similar measures for the EU, and additional tariff threats against Brazil and other trading partners are escalating global trade tensions. Although the UK secured a trade agreement with the U.S. that includes a 10% tariff, the overall expansion of tariffs could negatively impact global supply chains.

The U.S. stock market has shown a downward trend amidst these tariff threats, with the S&P 500 index falling by 0.3%. Conversely, the U.S. 10-year Treasury yield rose, and the dollar index showed strength. The Federal Reserve (Fed) is likely to keep interest rates unchanged this month, with expectations of two quarter-point rate cuts by year-end. However, some officials are maintaining a cautious stance, citing inflationary pressures and a robust labor market.

1. Trends by Major Countries

United States

• Stock Market: Due to tariff policies and inflation concerns, the S&P 500 and Dow Jones indices closed lower on a weekly basis, while Nasdaq saw a slight increase. Among large-cap tech stocks, performance varied.

• Inflation: The Consumer Price Index (CPI) and Producer Price Index (PPI) for June are scheduled to be released this week. The market expects CPI to rise to 2.5% for the second consecutive month, and a rebound in inflation is anticipated to negatively impact the stock market.

• Interest Rates: The Fed maintains its stance on keeping the benchmark interest rate unchanged, with expectations of two rate cuts within the year still present.

• Trade: The trade deficit expanded in June (USD 71.5 billion). The imposition of tariffs on the EU and Mexico is expected to lead to supply chain restructuring and continued upward pressure on import prices.

Japan

• Stock Market: The Nikkei 225 showed weakness due to U.S.-initiated tariff impacts and poor earnings from large-cap companies.

• Economic Growth: The Q1 GDP growth rate was 0%. Despite increases in private consumption and investment, reduced government spending and sluggish exports limited growth.

• Yen: The yen continues to weaken against the dollar (around JPY 147), reflecting a mix of tariff risks and global safe-haven preferences.

China

• Growth Rate: The Q1 GDP growth rate slowed to 1.2%, a combined effect of the U.S.-China tariff war and weak domestic demand.

• Trade: The trade surplus expanded in May (USD 103.2 billion), accompanied by a slowdown in export growth and a decrease in imports.

• Yuan: Expectations of easing U.S.-China tensions and active defense by the central bank led to a slight strengthening of the yuan.

South Korea

• Leading Economic Index: At 101.08 according to OECD standards, it reached its highest in 3 years and 7 months, signaling a clear economic recovery.

• Exports: Exports in June increased by 4.3% year-on-year, with strong performance in key items like semiconductors and automobiles.

• Tariff Risk: A 25% U.S. tariff is expected to take effect on August 1, with potential for increased growth volatility depending on negotiation outcomes.

United Kingdom

• Economic Growth: Q1 GDP growth rate was 0.7%, but May recorded a negative growth of 0.1%. Continuous tax increases and global trade uncertainties are weighing factors.

• Interest Rates: The Bank of England (BOE) kept interest rates at 4.25%, with more weight on a potential further cut in August.

Germany

• Economy: Q1 GDP grew by 0.4%, with both manufacturing and service sectors showing recovery. However, reduced exports to the U.S. and tariff risks increase uncertainty.

• Inflation: June inflation was 2%, the lowest in 8 months, mainly due to stable energy and food prices.

Brazil

• Interest Rates: The benchmark interest rate remains at 15%. Inflation (5.35% in June) is above the target (4.5%), limiting further room for rate cuts.

• Exchange Rate: The real continues to weaken due to the strong dollar and trade frictions with the U.S.

India

• Economic Growth: Q1 GDP grew by 2%, with robust performance in both domestic demand and exports.

• Inflation: May CPI was 2.82%, the lowest in 6 years, with a rate cut (5.5%) signaling an economic stimulus stance.

2. Commodity Trends

• Oil: WTI crude oil rose 0.6% on the week to USD 68.40. Geopolitical risks involving the U.S., Iran, and Russia, along with OPEC+ supply adjustments, are supporting prices.

• Gold: Trading near all-time highs between USD 3,330 and USD 3,357 per ounce. Global uncertainty, rising U.S. debt, and central bank buying are providing strong upward momentum.

• Copper: At USD 5.5/pound, the U.S.'s 50% tariff imposition has widened the domestic and international price gap, exacerbating supply chain instability.

• Soybeans: Around USD 10/bushel, exports are declining due to reduced U.S. production and increased global competition.

• Steel: Chinese steel prices turned strong due to expectations of government production cuts.

• Wheat: At USD 5.45/bushel, prices are declining due to strong production in the U.S. and Russia.

3. Others

• Cryptocurrency: Standard Chartered Bank predicts Bitcoin will reach USD 135,000 by the end of September and USD 200,000 by year-end. Bitcoin hit an all-time high of nearly USD 118,900 on July 10, up 25% year-to-date. Inflows from institutional and corporate investors will be a major driver of Bitcoin's growth, with Bitcoin Exchange-Traded Funds (ETFs) recording USD 48.9 billion in net inflows. Furthermore, the Genius Act, which regulates stablecoins, is seen as a potential factor for attracting new crypto investors.

• Artificial Intelligence (AI) Industry: Despite short-term market volatility caused by current tariffs and trade wars, artificial intelligence is becoming an essential part of the global economy, providing strong growth momentum. AI platform usage has quadrupled year-on-year, and OpenAI's monthly active users have exceeded 600 million. AI model revenues for fiscal year 2025 increased 16-fold from 2023 and 3-fold year-on-year to USD 14 billion. Additionally, the cost of operating AI models has become 99% cheaper since March 2023. Exploding demand for key components of the AI supply chain, such as data centers and semiconductors, is expected to outlast the current economic downturn. Companies like CommScope Holding Company (COMM), Credo Technology Group Holding (CRDO), Seagate Technology Holdings (STX), Celestica Inc. (CLS), and Freshworks Inc. (FRSH) are considered promising investment opportunities in the AI market.

Outlook: Navigating Potential Risks Amidst Stability

1. Geopolitical Tensions and Trade Policy Uncertainty U.S. President Trump's threats to impose and expand tariffs on major trading partners such as Canada, the EU, and Mexico are intensifying global trade tensions. Such tariffs could disrupt essential transatlantic supply chains and harm businesses, consumers, and patients alike. Central banks worldwide are responding to this external environment with differing monetary policies, which could lead to further market volatility. Investors should closely monitor trade negotiation developments and central bank interest rate decisions in each country.

2. Artificial Intelligence (AI) Innovation and Investment Strategy Despite current economic uncertainties, artificial intelligence (AI) is projected to maintain strong growth as a long-term megatrend. As AI technology integrates into various industries, demand for related infrastructure, such as data centers and semiconductors, will explode. Therefore, instead of being swayed by short-term market instability, it is advisable to consider long-term investments in companies that are innovatively utilizing AI technology or playing a key role in its ecosystem. Carefully selecting AI-related companies with solid fundamentals and growth potential is crucial.

3. Investment Strategy

   • Short-term: Given the increased volatility expected due to tariff policies and major economic indicators, a defensive portfolio and increased cash holdings may be effective.

   • Mid-to-long-term: A strategy of staggered buying into structurally growing industries such as AI, data centers, and eco-friendly energy seems valid. Maintaining a certain proportion of safe-haven assets like gold and the dollar is also advisable.

Conclusion

This week, U.S.-initiated tariff policies and major economic indicator releases are expected to dictate market direction. Supply chain restructuring, inflation, and policy uncertainty persist, but interest in structurally growing industries like AI and eco-friendly sectors, as well as safe-haven assets, remains valid. Rather than being shaken by short-term market volatility, it will be important to manage risk through long-term investment strategies and diversification.

Keywords: July 2025 Economic Outlook, Global Tariffs, US CPI, AI Investment, Gold Price Outlook, Supply Chain Restructuring, Inflation, Commodity Trends, Cryptocurrency, Bitcoin, Global Stock Market, Exchange Rate, Trade War, Safe Havens, Investment Strategy.