Morning Note: A Round-up of Market News.
Market News
Canada rescinded its digital service tax targeted at companies including Meta and Alphabet days after Donald Trump cited the levy for cutting off trade negotiations. Canada said the two countries will work toward reaching a deal by 21 July. Trump touted progress on trade deals with a few countries, naming agreements with China and the UK. The President also said Japan’s trade imbalance of cars with the US is “not fair” as both countries pushed for a deal ahead of his 9 July deadline.
Trump’s $4.5 trillion tax-cut bill now shifts to the Senate, where a final vote spills into today. The Senate version would add $3.3 trillion to US deficits over a decade, the Congressional Budget Office estimated
US equities finished last week on a positive note with the S&P 500 (+0.5%) and Nasdaq (+0.5%) logging fresh record highs while major indices posted strong weekly gains. The futures market is currently predicting further gains at the open this afternoon. The Federal Reserve says all 22 banks passed annual stress test. The news sets the stage for shareholder payouts.
US rate cut expectations have increased to a 91% probability in September versus 65% a week ago, driving the 2-year yield down 17 basis points to 3.73%. The 10-year currently yields 4.28%. Gold is trading above recent lows, although still below $3,300 an ounce. Brent Crude slid to $66.50 a barrel ahead of the OPEC+ meeting.
In Asia this morning, equity markets were mixed: Nikkei 225 (+0.6%); Hang Seng (-0.3%); Shanghai Composite (+0.5%). China's manufacturing activity shrank for a third straight month in June.
The FTSE 100 is currently little changed at 8,799, while Sterling trades at $1.3730 and €1.1710. UK GDP rose 0.7% in Q1, according to a final reading, matching estimates, while car makers can export to the US under a 10% tariff starting today.
Source: Bloomberg
