Today's Update 06-30-2025

Key Points and Metrics

Key Points and Metrics:

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Economic Indicators:

1. Germany's Preliminary Inflation Data (June):

   • CPI YoY:

     • Actual: 2.0%

     • Forecast: 2.2%

     • Previous: 2.1%

   • CPI MoM:

     • Actual: 0.0%

     • Forecast: 0.2%

     • Previous: 0.1%

   • HICP YoY:

     • Actual: 2.0%

     • Forecast: 2.2%

     • Previous: 2.1%

   • HICP MoM:

     • Actual: 0.1%

     • Forecast: 0.3%

     • Previous: 0.2%

2. Italian Non-EU Flash Trade Balance (June):

   • Actual: €5.26 billion

   • Previous: €2.18 billion

3. Japan's Tankan Survey:

   • Large Manufacturers Index:

     • Actual: 10

     • Previous: 12

   • Large Non-Manufacturers Index:

     • Actual: Data not provided

     • Forecast: 34

     • Previous: 35

4. Currency Strength Ranking:

   • Strongest to Weakest: JPY, NZD, AUD, CAD, EUR, GBP, CHF, USD

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Market News:

• Stock Futures:

  • U.S. Stock Futures: Climbing on positive trade negotiations.

    • S&P 500 Futures: Up 0.4%

    • Nasdaq 100 Futures: Up 0.6%

• U.S. Dollar:

  • Decline: Fell up to 0.4% against a basket of currencies, approaching three-year lows.

• Treasury Yields:

  • 10-Year Yield: Declined by 3 basis points to 4.25%.

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Trade and Politics:

• U.S.-China Trade Talks:

  • Signs of progress with negotiations making headway.

• U.S.-Canada Relations:

  • Digital Services Tax: Canada withdrew its tax, resuming trade negotiations with the U.S.

  • Comment from U.S. Commerce Secretary Lutnick: Thanked Canada for the move.

• U.S.-Iran Relations:

  • Sanctions: President Trump indicated willingness to lift sanctions if Iran pursues peaceful actions.

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Upcoming Events:

1. Economic Releases:

   • 09:45 AM: U.S. Chicago PMI

     • Forecast: 42.9

     • Previous: 40.5

   • 10:30 AM: Dallas Fed Manufacturing Business Index

     • Forecast: -12

     • Previous: -15.3

2. Speeches:

   • 10:00 AM: Federal Reserve's Bostic speaks.

   • 01:00 PM: White House Press Briefing.

   • 03:00 PM: ECB President Christine Lagarde speaks.

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Corporate Earnings Estimates (July 15th):

1. BlackRock (BLK):

   • Time: 06:00 ET

   • Expected EPS: $10.68

   • Expected Revenue: $5.38 billion

2. JPMorgan Chase (JPM):

   • Time: 06:55 ET

   • Expected EPS: $4.43

   • Expected Revenue: $44.1 billion

3. Wells Fargo (WFC):

   • Time: 07:00 ET

   • Expected EPS: $1.40

   • Expected Revenue: $20.78 billion

4. Citigroup (C):

   • Time: 07:00 ET

   • Expected EPS: $1.65

   • Expected Revenue: $20.77 billion

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Additional Notes:

• European Central Bank (ECB) Officials:

  • Luis de Guindos (ECB Vice-President):

    • Emphasized the need to keep all interest rate options open amid economic uncertainty.

    • Mentioned that the current interest rate position is appropriate.

• Iran Nuclear Discussions:

  • Iran expressed security concerns for International Atomic Energy Agency (IAEA) inspectors following recent attacks on nuclear sites.

• Market Sentiment:

  • Positive Factors:

    • De-escalation in Middle East tensions.

    • Economic resilience in the U.S.

    • Progress in international trade negotiations.

  • Investor Outlook:

    • Optimism driving stock markets to record highs.

    • Expectations of potential interest rate cuts due to subdued inflation.

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💰 Bond Markets:

• 10-year Treasury yield down 3bp to 4.25%

• Treasury market posting best monthly return since February

• SOFR: 4.39% (vs 4.40% previous)

🏛️ Political/Policy:

• CBO estimates Trump's tax bill would add $3.3 trillion to deficits over decade

• Senate negotiations continuing on tax-cut package

• Trump signing executive orders at 14:30

📅 Upcoming Events:

• Fed's Bostic speaks at 10:00

• Fed's Goolsbee speaks at 13:00

• ECB's Lagarde speaks at 15:00

• Major earnings next week: BLK, JPM, WFC, C (July 15th)

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Final Thoughts

The market sentiment is clearly bullish right now, driven by three main catalysts: trade negotiation progress, subdued inflation data, and growing rate cut expectations. The dollar's weakness to 3-year lows reflects concerns about fiscal policy and the massive deficit implications of Trump's tax proposals.

What's particularly interesting is how quickly sentiment shifted from April's tariff-induced selloff to Friday's record highs. The combination of economic resilience and de-escalating geopolitical tensions (Israel-Iran) has created a perfect storm for risk assets.

However, keep an eye on that July 9th trade deadline - it's becoming a critical inflection point. If negotiations falter, we could see volatility return quickly. The bond market's performance suggests investors are betting on Fed easing, but with the 10-year at 4.25%, there's still room for disappointment if inflation proves stickier than expected.

The upcoming earnings season will be crucial - especially the big banks next week. With all this optimism priced in, companies need to deliver not just on numbers, but on forward guidance too.

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Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always do your own research and consider your financial situation before making investment decisions.

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Harry