Quiet End to the Trading Week – Tariffs in Focus
As expected, it was a relatively quiet trading day on Friday as traders and investors alike took advantage of the US July 4th holiday to assess all recent updates and look ahead to this week’s tariff deadline. The major indices were closed on Friday, but futures markets drifted lower as investor concern started to increase with regard to tariff deals, with President Trump advising that letters would be going out to trade partners from today. FX markets were open but remained in relatively tight ranges, the DXY gaining just 0.09% on the day to close at 97.18. Oil prices took a hit after OPEC+ agreed to a bigger-than-expected production increase in August, Brent falling 0.73% to $68.30 and WTI down 0.75% to $66.50. Gold remained in recent ranges, gaining 0.33% on the day to finish up at $3,337.15 an ounce.
The “T-Word” to Dominate Markets This Week
It is a quieter macroeconomic calendar this week with much less data than the heavy US jobs numbers we had last week, and although we do have some major central bank updates in the coming days, most traders are expecting US tariff updates to dominate market sentiment. The 90-day pause after President Trump’s “Liberation Day” tariff announcement is up on Wednesday, and only a small number of trade deals have been agreed, with others apparently just waiting for the ink to dry, whilst more are still very much in the negotiation stage. With stock markets sitting again at or near all-time highs, it is difficult for some investors to argue that the tariff impact has been anywhere near as hard as expected, whilst others are fearful that once we get clarity on the extent of tariffs on a country-by-country basis, we could start to see the real impact bite over the coming months. But for the short term, most are agreed that we could be in for a lively couple of days as trade deal updates come thick and fast.
Quiet Calendar Day to Kick Off the Week
Traders are anticipating a quiet start to the trading week with little scheduled on the macroeconomic calendar to move markets. There are mainly just 3rd-tier data releases across all three of the trading sessions today; however, geopolitical updates are expected to push volatility up in the latter half of the day. Asian markets have kicked off quietly as expected this morning, but traders feel that we could see some stronger moves as the day progresses, especially when we receive any fresh updates on tariff negotiations between the US and trading partners. Also, US markets returning to the fray after a long weekend will likely see volume increase as traders react to the last few days’ updates as well as look to position themselves ahead of potential moves into Wednesday’s deadline.
