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Key Market Updates
As the July 9 trade negotiation deadline approaches, former President Trump announced a US-Vietnam trade agreement. Meanwhile, the US June ADP private payrolls fell by 33,000, badly missing expectations of a 98,000 increase, fueling speculation of an earlier Fed rate cut in July. Markets also await news on the US Big Beautiful Bill Act congressional review, alongside the UK bond market’s worst sell-off since October 2022, signaling potential risks.
Equities:
- The S&P 500 rose 0.47%, and the Nasdaq gained 0.96%, both closing at record highs.
- Russell 2000 (small-cap index) jumped 1.3%, outperforming large-caps for two consecutive days.
- Nike (+4.1%) and Lululemon (+0.5%), with production lines in Vietnam, rallied; Tesla rebounded 5%.
Commodities & Crypto:
- WTI crude surged 3.05%; Bitcoin climbed 3.12% to $109,000.
- Gold advanced 0.56% for a third straight day.
Macro Highlights:
US-Vietnam Trade Deal:
- Vietnam will face a 20% tariff on US exports but grants zero tariffs for US goods.
- Vietnam plans to purchase 50 Boeing jets ($8B deal).
UK Market Turmoil:
- Sterling plunged 1.33% as UK bonds saw their worst sell-off since 2022.
- Fiscal uncertainty persists amid political tensions over welfare cuts.
Weak ADP Data:
- June private payrolls dropped unexpectedly, reinforcing July rate-cut bets.
US Legislative Watch:
- The House reviews the Big Beautiful Bill Act, a tax-and-spend package opposed by Democrats.
Geopolitical Risks:
- Iran halted cooperation with the IAEA, elevating Middle East tensions.
FAQs
Q: How does the US-Vietnam deal impact tariffs?
A: Vietnam imposes a 20% tariff on US-bound exports but grants zero tariffs for American goods, boosting bilateral trade.
Q: Why did UK markets decline?
A: Bond sell-offs and fiscal policy uncertainty pressured the pound and equities.
Q: What’s next for the Fed?
A: Weak ADP data raises odds of a July rate cut, with focus shifting to June non-farm payrolls.
Today’s Key Events
- Eurozone Services PMI
- US Non-Farm Payrolls & Unemployment Rate
- Fed Meeting Minutes
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