MARKET WRAPS
Watch For:
EU retail trade; Germany industrial production index; trading updates from Repsol, Galp Energia
Opening Call:
European stock futures were mixed early Monday. Asian stock benchmarks mostly fell; the dollar inched higher; Treasury yields were down; while oil futures and gold fell.
Equities:
Stock futures lost ground, after the Trump administration said that tariffs against U.S. trade partners won't take effect until next month, rather than when the deadline for the 90-day pause ends on Wednesday. On Sunday, Commerce Secretary Howard Lutnick, accompanying the traveling president, said Sunday that "tariffs go into effect Aug. 1, but the president is setting the rates, and the deals, right now." Trump signaled his agreement with those remarks.
Late Sunday, Trump said that a dozen or more letters could go out this week, and that letters will be delivered starting at noon Monday.
The acknowledgment by Trump and his team that they would send letters instead of working out deals before the July deadline marks a shift in thinking. So far, the administration has only struck a trio of deals, and some of those lack crucial details.
Forex:
"President Trump said his administration will send tariff letters to between 12 and 15 [countries] starting Monday," MUFG Bank's Michael Wan said. Trump also suggested that several trade agreements are in the pipeline, the senior currency analyst said. "We suspect that even if there is an agreement with some countries it will likely be short of details for now and focused more on lower-hanging fruits."
Bonds:
U.S. Treasurys weakened after starting July on a rocky note. The path ahead will be determined by three unknowns: Bessent's issuance strategy, the Trump administration's tariff policy, and the Fed's rate-cutting plans.
Bessent has said he won't increase sales of longer-dated debt "for at least the next several quarters." Yet, the Treasury can't keep issuance sizes the same for too long. For one thing, the tax and spending bill that Trump signed on Friday widens the gap between revenue and spending. Relying on shorter-dated debt with maturities of a few weeks to a year isn't a long-term option.
"If the Treasury leaned solely on T-bills in the coming years, the T-bill share would rise to almost 28% by year-end 2028," wrote Jay Barry, head of rates strategy at J.P. Morgan.
Energy:
Oil futures fell, following a larger-than-expected output increase by OPEC+. The group announced on Saturday that it would raise production by 548,000 barrels a day in August.
Eventually, the "price of crude oil will rise as the market realizes that it is difficult to oversupply the market other than in the short term, and that global [production] decline rates will be difficult to overcome," said Stan Majcher, portfolio manager at Hotchkis & Wiley.
Metals:
Gold edged lower on possible position adjustments, but losses may be limited by concerns over U.S. policies.
Apart from the looming deadline for the Trump administration's pause in so-called reciprocal tariffs, Trump signed his "one big, beautiful bill" into law in a July Fourth ceremony. A key factor supporting gold is the damaging U.S. policy, which is eroding investors' confidence in safe U.S. assets, Commerzbank Research's Thu Lan Nguyen said.
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Copper edged higher, ahead of Wednesday's deadline for when Trump's 90-day tariff pause is scheduled to expire. "Markets are fretting that Trump's policies could trigger a global economic slowdown and hurt demand for industrial commodities," ANZ said.
TODAY'S TOP HEADLINES
OPEC+ to Increase Output by 548,000 Barrels a Day in August. What it Means for Oil Markets.
The Organization of the Petroleum Exporting Countries and its allies, or OPEC+, said that it has agreed to raise oil output by 548,000 barrels a day in August on Saturday.
The announcement came after the group's first meeting since the Iran-Israel conflict in June and the U.S.'s strikes on Iranian nuclear facilities that same month.
Treasury Market Could Be Whipsawed by These 3 Things
The U.S. Treasury market is off to a rocky start in July with yields rising and prices falling. The path ahead will be determined by three unknowns: Treasury Secretary Scott Bessent's issuance strategy, the Trump administration's tariff policy, and the Federal Reserve's rate-cutting plans.
Investors should brace for continued volatility.
Trump Faces Crucial Week for Reaching Trade Deals
President Trump faces a crucial week for reaching trade deals before new tariffs are scheduled to hit dozens of countries starting Wednesday.
He has scored several big wins in the past two weeks, including signing his tax and domestic policy megabill and helping broker a cease-fire between Israel and Iran. U.S. job growth in June was steadier than economists had expected, signaling strength in the economy.
The Volkswagen Robotaxi That Wants to Rival Waymo and Tesla
HAMBURG-The self-driving taxi carefully steered around the delivery vehicle that blocked its path-and straight into oncoming traffic.
"Not the best driving decision," sighed Christian Senger, head of autonomous vehicles at Volkswagen, which built the robotaxi.
Israel and Hamas Have Different Reasons for Pursuing Gaza Deal
Progress toward a cease-fire deal between Israel and Hamas in Gaza follows a shift in the balance of power in the Middle East after last month's 12-day war between Israel and Iran.
If Israel and Hamas complete negotiations brokered by the U.S., Qatar and Egypt, they would pause the nearly two-year-old war in Gaza, free Israeli hostages in exchange for Palestinian prisoners and allow more humanitarian aid into the hunger-stricken enclave.
What Musk's 'America Party' Means for Tesla Stock (Hint: It Isn't Good)
Tesla investors hoping that CEO Elon Musk would stay out of politics after leaving his position in the Trump administration are going to be sorely disappointed-again.
Disappointment is rarely good for stock prices.
Elon Musk Is Running Out of Road in China
As Elon Musk confronts deepening business and political challenges in the U.S., he's also facing trouble in his other most important market: China.
For a while, Tesla was the hottest car on Chinese roads, and Musk was the toast of Beijing. Government officials showered the company with incentives, part of a concerted strategy to turbocharge the Chinese EV industry by injecting Tesla know-how into the country and spurring competition. Tesla's sales took off.
Oracle Gives U.S. Government Discount on Cloud and Software
Oracle is cutting the cost of its database software and cloud-computing service for the federal government, making it the latest tech giant to offer the Trump administration a significant discount on its services.
The company is offering government agencies a 75% discount on its license-based software, including databases and analytics, as well as a "substantial" discount on its cloud service through the end of November, the General Services Administration said.
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Expected Major Events for Monday
05:00/FIN: May Industrial Production
06:00/ROM: May Retail trade
06:00/NOR: May Industrial Production Index
06:00/GER: May Industrial Production Index
06:00/UK: 2Q Halifax House Price Index: UK Regional Breakdown quarterly release
06:00/UK: Jun Halifax House Price Index
06:00/DEN: May Industrial production & new orders
06:30/HUN: May Retail Sales
07:00/SVK: May Internal trade, incl Wholesale & Retail
07:00/AUT: Jun Wholesale Price Index
07:00/SWI: Jun SNB foreign currency reserves
07:00/CZE: May External trade
07:00/CZE: May Industry, Construction
08:00/ICE: Jun External trade, preliminary figures
09:00/EU: May Retail trade
09:00/LUX: Jun CPI
23:01/UK: Jun UK Nations and Regions Growth Tracker
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(END) Dow Jones Newswires
July 07, 2025 00:08 ET (04:08 GMT)
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