Global News Summary : 30 June - 4 July 2025
Global markets were shaped by escalating trade tensions, fiscal policy breakthroughs, and shifting monetary expectations. The U.S. passed President Trump’s $3.4 trillion tax and spending bill, driving equity gains and reinforcing economic momentum, while a stronger-than-expected June jobs report (+147,000) tempered hopes for a near-term Fed rate cut. Trump’s threats of 70% unilateral tariffs unsettled allies ahead of a July 9 trade deadline, even as new deals with Vietnam and draft accords with Switzerland emerged. In the UK, political stability returned as Chancellor Rachel Reeves retained her post, helping gilts rebound amid solid services PMI data. Meanwhile, China–EU relations soured with summit cancellations and targeted brandy tariffs. Inflation stayed near central bank targets globally, and AI policy remained in flux as the U.S. tightened export controls on chips to Southeast Asia while relaxing restrictions on China’s EDA access. Despite short-term volatility, economic fundamentals held firm, keeping recession risks at bay for now.
United States
Fiscal Policy: Trump's $3.4 trillion tax and spending bill passed both Senate and House by 4 July, marking the most significant fiscal expansion of his second term. It includes tax cuts and increased infrastructure spending.
Jobs: June nonfarm payrolls rose +147,000, defying forecasts of trade-related cooling. Result: traders scaled back rate cut bets.
Monetary Policy: Powell opened door to a July rate cut, but jobs data reversed expectations. 10Y Treasury yield held steady at 4.35%.
Stock Market: S&P 500 hit an all-time high; but futures fell 0.6% on 5 July amid tariff threats. Strategists warned of bubble risk above 6,300.
Trade Tensions: Trump warned of 70% unilateral tariffs, and struck a Vietnam trade deal lowering tariffs to 20%. Draft US–Swiss deal assures pharma tariff protection.
AI Export Controls: Plans to restrict Nvidia chip shipments to Malaysia and Thailand to curb re-exports to China.
United Kingdom
Political Risk: Labour PM Starmer calmed market fears by confirming Rachel Reeves as Chancellor after party unrest.
Growth: Services PMI rose to 52.8 in June (May: 50.9), indicating accelerating expansion in services.
Rates: BoE’s Alan Taylor proposed 3 rate cuts in 2025. Gilt yields volatile: 10Y yield rose to 4.56% from 4.45%.
Currency: GBP was stable around $1.3650 despite political drama.
Japan
Spending: Real household spending rose +4.7% YoY (May), mostly in autos—indicating resilience despite tariffs.
Industrial Output: Up +0.5% MoM in May, but below expectations. BoJ maintains gradual approach to rate hikes.
Tariff Risk: Trump threatened higher Japan tariffs, clouding outlook. However, equities rose 5 straight days on trade hopes.
Eurozone
Trade Tensions with US: Full EU–US trade deal unlikely before 9 July. EU seeking “agreement in principle”. EU carmakers offered US investment in exchange for tariff relief.
China Tensions: China canceled part of the EU summit and imposed 5-year anti-dumping duties on EU brandy (with exemptions for compliant cognac producers).
Inflation: EZ CPI rose to 2.0% in June (May 1.9%); core inflation steady at 2.3%, aligned with ECB targets.
China
Manufacturing:
NBS PMI at 49.7 (May: 49.5) – contraction continues.
Caixin PMI rose to 50.4 (May: 48.3) – signals trade rebound post tariff ceasefire.
Geopolitical: Rising tensions with EU; tech access restored via rollback of U.S. chip design export bans.
Switzerland
Inflation: CPI rose +0.1% YoY in June, rebounding from deflation.
Trade Deal: US–Swiss draft includes tariff protection for pharma exports, improving bilateral stability.
New Zealand
Jobs: Filled jobs rose just +0.1% in May to 2.35M—reverting to early 2023 levels, showing weak hiring momentum.
India
Regulatory Action: Jane Street barred from Indian markets temporarily over $4.3B in alleged trading gains.
THEMATIC SUMMARY
ECONOMIC GROWTH
U.S.: Resilient economy supports market highs. Strong jobs and retail demand indicate no immediate slowdown.
UK: Services PMI at 52.8 implies economic expansion.
Japan: Rising household spending but weak industrial output creates mixed signals.
China: Weak domestic demand; trade side improving.
EMs: Mixed, with Brazil's Ibovespa hitting record high.
JOBS
U.S.: +147K jobs in June – soft landing narrative intact.
NZ: Weak +0.1% job growth shows global hiring caution.
Japan: Spending up +4.7% YoY – implies household income stability.
DEBT SECURITIES
U.S.: Treasury yield steady at 4.35% despite fiscal expansion.
UK: Gilt yields rose to 4.56%, driven by political jitters.
Germany: Bund yields stable at 2.61%.
CHF: Rate normalization halted after CPI rebounded.
ARTIFICIAL INTELLIGENCE
U.S. Regulation:
Senate rejected 10-year federal ban on state AI regulation.
Plans to restrict AI chip exports to Malaysia & Thailand.
China:
Gained back access to EDA tools (Siemens, Synopsys, Cadence).
Corporate:
OpenAI rented vast Oracle compute for Stargate.
Swedish AI coding startup nears $2B valuation.
ESG
Indirect ESG Signals:
UK food inflation rose to 3.7% in June due to dry weather — a climate-linked risk.
Travel disruptions in EU from French ATC strike impact emissions and logistics chains.
No new ESG laws or accords reported, but climate volatility and trade wars impact ESG-sensitive sectors.
INFLATION
U.S.: Stable at ~2.3%, still above Fed target.
UK: Output price pressures easing; food inflation up.
Eurozone: CPI 2.0%, core 2.3%—in line with ECB goal.
Switzerland: CPI rebounded to +0.1%, ending deflationary stretch.
RECESSION RISK
Japan: Weak production + tariff pressure = rising risk.
UK: BoE’s Taylor warned of "hard landing" without rate cuts.
NZ: Sluggish job growth adds to slowdown concerns.
U.S.: Not at risk near-term—robust hiring, strong equities, and consumer resilience persist.
KEY MARKET MOVES ( as of 4 JULY)
S&P 500 Futures –0.6%
10Y UST Yield 4.35% (flat)
Gold +0.3% to $3,337.22/oz
WTI Crude –0.7%
EUR/USD +0.2% to 1.1775
GBP/USD Flat at 1.3650
USD/JPY –0.3% to 144.51
Bitcoin –2.2%
Ethereum –4.4%