At the center of today's suspense is Donald Trump's latest tariff broadside.  Having already rewritten the playbook on brinkmanship, the President has mailed form letters to fourteen nations—among them two security allies, Japan and South Korea—promising huge duties if no deal is struck by August 1st. We're talking about 25% duties on imports from Japan, South Korea, Malaysia, Tunisia, and Kazakhstan. South Africa faces a 30% hit, while Thailand and Cambodia are marked for 36%. At the top of the list, Laos and Myanmar risk 40% levies. Fourteen countries in total, the percentages nearly identical to those first floated in April. The European Union, still deep in negotiation, has so far ducked the blow. Perhaps Brussels whispered the right words at the right time?

So far, only two deals have been inked—one with the U.K., the other with Vietnam—while a tentative framework with China lingers unresolved. Short of a diplomatic miracle in the next two days, Peter Navarro's grand ambition—90 trade agreements in 90 days—is sinking fast. The clock ticks, the count stalls, and the promise of a rapid-fire global reset fades into bureaucratic reality.

The market dutifully gasped (the Dow nearly one per cent lower yesterday) and then steadied itself overnight.  No one, it seems, can match equities for short-term memory loss. Nasdaq 100 and S&P 500 futures are up by 0.1% and 0.2% this morning, while the Dow is down 0.1%.

What makes this new tariff episode different is its timing.  Last month, the Fed surprised no one by holding rates steady, but the minutes from that meeting—due out on Wednesday—may expose the first fissures in a committee still haunted by last year's inflation scare.  Investors have priced out a July cut but cling to sixty-per-cent odds of relief by September.  The tension between fiscal moves (tariffs and tax-credit rollbacks) and monetary caution has produced a mood that is neither bullish nor bearish so much as vigilant.  

Policy whiplash is hardest on the real economy. Trade policy, of course, is supposed to protect the American worker.  Yet the announced plant closings at Dow Inc. suggest another outcome: protection that protects nobody in particular while scattering collateral damage across supply chains. Yesterday the Administration directed agencies to strip solar- and wind-energy tax credits from the eerily named One Big Beautiful Bill Act.  SunRun and SolarEdge each surrendered more than five per cent.  Meanwhile, Tesla clawed back a percentage point after its worst single-day drop in a month.  Elon Musk responded not with a manufacturing breakthrough but with the founding of a new political party, a plot twist disappointingly on-brand.

For market spectators, though, turmoil has become a kind of entertainment, which doesn't prevent indices from rising. The most telling detail may be Goldman Sachs's upgrade of its twelve-month S&P 500 forecast, to 6,900 from 6,500, justified by—of all things—the expectation of rate cuts spurred by the very volatility that tariff brinkmanship produces.  In other words, the market has learned to monetize the President's bluff.  Each threat weakens global growth just enough to beg for monetary loosening, and each hint of dovishness lures the index to fresh highs.  It is an ingenious if perverse arbitrage, and it depends on the belief that the show will never end in actual calamity.

In Asia, Japan was up 0.3% and South Korea 1.8%. Representatives from both countries have indicated that they will continue discussions with a view to reaching an agreement by August 1st. Hong Kong, for its part, was up 0.6%. India remained stable and Australia lost ground after a surprise monetary policy move. The RBA kept its rate unchanged at 3.85%, while the market had expected a cut to 3.60%. The decision, taken by 6 votes to 3, illustrates the fears that still weigh on price developments in the context of the trade war. This proves that, even among central bankers, the unexpected still has a place. In a fairly classic move, the Australian dollar has started to rise.

Today will be a quiet day for macroeconomic indicators, but geopolitics continues to play out. Donald Trump welcomed Benjamin Netanyahu to Washington. At the same time, the US president promised to supply new defensive weapons to Ukraine after his fruitless talks with Vladimir Putin. Meanwhile, French president Emmanuel Macron will spend three days in the United Kingdom to cement relations between Paris and London. In China, Beijing is considering doubling the quota for the programme allowing local investors to access foreign bonds via Hong Kong, while opening up the facility to non-bank financial institutions. This opening would strengthen financial flows through Chinese markets, in line with the country's development strategy.

Leading indicators are mixed in Europe: despite the strong performance of Asian stock markets, there is a gap to be filled with the United States yesterday.

Today's economic highlights:

On today's agenda: the current account balance and trade balance in France; the unemployment rate in Switzerland. See the full calendar here.

  • Dollar index: 97,195
  • Gold: $3,328
  • Crude Oil (BRENT): $69.28 (WTI) $67.84
  • United States 10 years: 4.4%
  • BITCOIN: $108,795

In corporate news:

  • Johnson & Johnson filed a supplemental FDA application to use Caplyta for preventing schizophrenia relapse after a phase III study showed a 63 % reduction in relapse risk versus placebo.
  • Honeywell will review strategic options for its Productivity Solutions and Services and Warehouse and Workflow Solutions units as it streamlines ahead of its 2026 three-way split.
  • Meta Platforms poached Apple's head of AI models, Ruoming Pang, luring him to its new Superintelligence division with a multi-million-dollar package.
  • IBM unveiled Power11 chips and servers, touting higher energy efficiency, zero planned downtime and rapid ransomware detection ahead of a July 25 launch.
  • Booking Holdings told an EU court the Commission had no compelling evidence to block its $1.9 billion eTraveli takeover and asked judges to overturn the veto.
  • Willis Towers Watson introduced “Undercover,” a $200 million facility that insures cargo owners against geopolitical risks.
  • Martin Marietta Materials appointed long-time executive Michael Petro as chief financial officer, replacing interim CFO Robert Cardin.
  • GE Vernova won a TransnetBW contract to modernize and double capacity at Germany's Kühmoos 380 kV substation with new gas-insulated switchgear.
  • GE Aerospace signed a multi-year maintenance pact with China Airlines to service GE9X engines destined for the carrier's future Boeing 777X fleet.
  • Oracle offered the US federal government a 75 % discount on database licences and cut-rate cloud services under the GSA's OneGov purchasing program.
  • BlackRock said it now prefers euro-area government and corporate bonds over US debt, arguing European yields are more attractive amid sticky US inflation.
  • BlackRock's Jio BlackRock venture aims to launch nearly a dozen new Indian mutual funds this year to court smaller investors.
  • Amazon and SpaceX led 450 firms urging Congress to keep NOAA's satellite-traffic coordination system, warning cuts would heighten collision risks.
  • Car Inc teamed with Baidu's Apollo to debut an autonomous-vehicle rental service, offering self-driving cars for four-hour to seven-day bookings.
  • Robinhood Markets is in talks with regulators after unveiling tokenized US-stock offerings for EU customers, following queries from the Bank of Lithuania.
  • BYD and Li Auto reported slower June sales growth, underscoring mounting price competition.