Markets digest Trump’s tariff escalation amid safe-haven flows
Global markets continued processing President Trump’s 35% tariff threat on Canada and higher 15%-20% base tariff elsewhere following Friday’s NY session. Precious metals rallied strongly while safe-haven CHF outperformed in FX markets.
Higher-beta currencies weakened alongside JPY, pressured by rising US yields. Canada’s strong jobs report and speculation around Fed Chair Powell’s potential resignation drove sustained US bear steepening throughout the session.
US equities pared gains with the S&P500 down 0.3%, and the Nasdaq down 0.2%.
President Trump’s tariff announcements will continue this week, with euro area tariffs remaining top of mind. Canadian and Brazilian officials may reach out to the White House to negotiate the announced 35% and 50% respective rates.
CHF was a relative outperformer, benefiting from safe-haven characteristics. EUR softened to 1.1680 towards NY close.
CAD reversed much of its post-35% tariff announcement loss but didn’t strengthen significantly on Canada’s strong jobs report, suggesting markets remain more sensitive to tariffs than fundamentals.
Tariffs stir uncertainty as Fed weighs rate path
Chicago Fed President Austan Goolsbee told The Wall Street Journal that policymakers should tune out political noise, warning that fresh tariff threats could delay interest rate cuts. He added it’s still too soon to say whether the new measures will shift the inflation outlook.
In Asia, the Singapore dollar is nudging lower, with USD/SGD trading just above its 21-day moving average of 1.2801.
Dollar buyers may look to take advantage.
Key resistance levels loom at 1.2884 (50-day average) and 1.3157 (200-day).
Inflation and growth data take center stage
This week is packed with high-impact economic releases, with inflation and growth data from major economies likely to set the tone for FX markets. US CPI and retail sales, China’s Q2 GDP, and key employment figures from Australia will be closely watched for signals on the global growth and policy outlook.
The US calendar is headlined by June CPI on Tuesday, with consensus expecting a modest 0.3% MoM rise and annual inflation ticking up to 2.7% from 2.4%. Producer prices (PPI) follow on Wednesday, alongside industrial production. Retail sales for June are due Thursday, with markets looking for a flat reading after May’s -0.9% drop. The week rounds out with housing starts and the preliminary University of Michigan sentiment survey. These data points will be pivotal for Fed rate expectations and USD direction, especially as markets debate the timing of potential policy easing .
China’s economic pulse will be closely monitored with Q2 GDP (Tuesday), expected to slow to 5.1% YoY from 5.4%. June’s retail sales and industrial production are also due, with both anticipated to moderate from prior readings. Trade data kicks off the week on Monday, with exports seen rising 5.2% YoY and the trade surplus widening to $113.2bn. These releases will be key for risk sentiment and commodity currencies, particularly AUD and NZD .
Eurozone June CPI (final) is released Thursday, following German ZEW surveys on Tuesday. In the UK, June CPI is out Wednesday, with the prior annual rate at 3.4%. UK labor market data (Thursday) will also be in focus, with the unemployment rate last at 4.6%. These figures will help shape ECB and BoE policy expectations and drive EUR and GBP volatility .
Australian employment data (Thursday) is the main domestic event, with consensus looking for a 25k jobs gain in June and the unemployment rate steady at 4.1%. The outcome will be important for RBA policy pricing and AUD performance, especially amid ongoing global growth concerns .
Japan’s week features core machine orders (Monday), industrial production (Monday), and national CPI (Friday), with inflation expected at 3.4% YoY. These releases will be watched for any signs of policy shift from the Bank of Japan, as markets continue to assess the sustainability of recent JPY moves .
Antipodeans down on risk-off sentiment
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 14 – 19 July
All times AEST
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
