Daily Global Macro Morning Note
Trump Double Down on Tariffs and Markets Tepid
Quote of the Day:
"Success is not the key to happiness. Happiness is the key to success. If you love what you are doing, you will be successful."
— Albert Schweitzer
Wake-Up Call:
Futures & Market Sentiment
S&P 500 E-Mini (ESU25): -0.62%
Wall Street is set for a weaker open as fresh trade salvos from the White House rattle sentiment. Traders are on edge, bracing for more volatility as the tariff drumbeat grows louder.
🏛️ U.S. Macro & Policy
Tariff Escalation: Trump Targets Canada, Eyes EU
35% tariffs on Canadian imports from August 1st (USMCA-compliant goods exempt).
EU in the crosshairs: Brussels could receive a letter on tariff rates today, casting doubt on trade negotiations.
Blanket levies: Trump signals 15%-20% tariffs on most remaining trading partners not yet assigned rates.
IMF: Warns of elevated global economic uncertainty, urges constructive engagement to stabilize trade.
Fed Speak & Policy Outlook
St. Louis Fed’s Musalem: Sees upside inflation risks but says it’s too early to judge the lasting impact of tariffs.
San Francisco Fed’s Daly: Still expects two rate cuts this year; believes tariff-driven inflation may be less severe than feared.
Rate Cut Odds: 93.3% chance of no change, 6.7% for a 25bps cut at July’s meeting.
Market takeaway: Ongoing tariff uncertainty dims prospects for a near-term rate cut, raising the risk of “higher for longer” rates.
📊 Economic Data & Events
U.S. Initial Jobless Claims: Fell -5K to 227K (8-week low, vs. 236K expected)
No major U.S. data scheduled for today
10-Year Treasury Yield: 4.389% (+0.73%)
🏢 Corporate Highlights
Delta Air Lines (DAL): +12% after strong Q2 results and reinstated 2025 profit guidance.
Advanced Micro Devices (AMD): +4% after HSBC upgrade to Buy ($200 PT).
MP Materials (MP): +50% on DoD partnership to boost rare earth magnet supply chain.
Helen of Troy (HELE): -22% after weak FQ1 results.
Pre-Market Movers:
Chip stocks (ON, GFS, ARM) down ~-1%
Crypto stocks (MSTR +3%, MARA +4%, COIN +2%) rally on Bitcoin ATH
Levi Strauss (LEVI) +8% after upbeat Q2 and raised guidance
Earnings Spotlight
Today: None
🌍 Europe: Tariff Fears Hit Sentiment
Euro Stoxx 50: -1.10% as traders brace for U.S. tariff news; banks and healthcare lag.
U.K. May GDP: -0.1% m/m, +0.7% y/y (misses m/m forecast)
France June CPI: +0.4% m/m, +1.0% y/y (beats expectations)
ECB: Schnabel urges caution on further cuts after hitting 2% inflation target; Panetta sees case for continued easing if trade risks intensify.
Corporate: DNB Bank ASA -7% after earnings miss
🌏 Asia: Mixed Close, Policy in Focus
Shanghai Composite (SHCOMP): +0.01%
Nikkei 225: -0.19%
China: Rare earth and brokerage stocks lead; banks and property lag. Investors await key economic data and policy signals later this month. U.S.-China diplomatic talks resume amid trade tensions.
Japan: Fast Retailing -6% on tariff warning and price hike plans; Seven & I Holdings +3% on strong profit. Nikkei Volatility Index up to 22.88.
📅 Key Data Recap
🎯 Trader’s Take
U.S. equities: Tariff escalation and Fed uncertainty keep risk appetite in check. Watch for further headlines out of Washington and Brussels.
Europe: Downbeat as tariff risk grows and U.K. data disappoints, but the week still ends in the green.
Asia: Cautious tone as investors await policy signals and digest tariff fallout.
Stay nimble—headline risk is front and center as trade policy and central bank moves continue to drive the macro narrative.
Trade smart and have a great Friday! 🚀
Global Macro Theme of the Day:
The Quiet Tremor: Japan’s Bond Yields and the Global Regime Shift 🚨
The Shift No One Saw Coming
Something subtle but seismic happened this week. No headlines screamed. No breaking news banners flashed. Yet, for those tuned into the rhythm of global finance, the tremor was unmistakable: Japan’s 30-year government bond yield surged above 3% for the first time since 2000. Even more striking, the 40-year yield climbed to 3.36%, flirting with its all-time high since the bond’s inception. 📈
Not Just a Ripple—A Red Flare 🚩
Why does this matter? For decades, Japan has been the anchor of the global rate structure—the gravitational center of the low-yield universe. When Japanese long-term yields break out of a 20-year range, the impact isn’t local. It radiates across continents, asset classes, and macro models.
Japan 30-Year & 40-Year Yield Surge
The Market’s Whisper: Polymarket’s Signal 🎲
While traditional media stayed silent, prediction markets like Polymarket lit up. The probability of the U.S. 10-year Treasury yield breaking above 4.3% spiked dramatically. This isn’t just a number—it’s a signal that traders and investors are recalibrating their expectations for global rates.
U.S. 10-Year Yield Probability Spike
The Domino Effect: Why This Matters Globally
Currency Volatility: Rising Japanese yields can prompt Japanese investors to repatriate funds, impacting everything from the U.S. dollar to emerging market currencies. 💱
Global Bond Markets: Higher yields in Japan put upward pressure on yields elsewhere, as global investors demand more compensation for risk.
Risk Appetite: As the anchor lifts, the cost of capital rises, reshaping valuations for stocks, real estate, and private equity.
A New Macro Regime?
This isn’t just a single event—it’s a transition. The end of ultra-low yields in Japan could mark an inflection point for global markets. The world’s largest pools of capital are rethinking their playbooks. The “quiet” tremor in Tokyo may soon become a roar felt from Wall Street to Frankfurt to Hong Kong.
Stay tuned. The anchor has shifted—and the waves are just beginning. 🌊
Macro Trader Setup:
Key Points
S&P 500 and Crude Oil short positions remain closed: Both assets are above their stop losses, so no new short trades are initiated.
US Dollar Index, 10-Year Yield, Gold, and Bitcoin positions remain open: All are within their risk parameters, with current prices between stop losses and targets.
Cash allocation remains at 51.0: No new entry signals or position increases are triggered by the current price levels, so cash is not redeployed.
No new trades are initiated: The model maintains a defensive stance, holding a significant cash allocation until new signals emerge.
The above table reflects the most current available data as of this morning. The trading positions remain consistent with our previous assessment, with adjustments made to account for the latest price movements.
Remember, tradetank, is your ultimate AI cognitive tool for navigating these thrilling macroeconomic waters. Buckle-Up!!!
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