Focus on trade deadline, Trump's 'big beautiful bill' and US jobs report on Thursday

EU mid-market update: Focus on trade deadline, Trump's 'big beautiful bill' and US jobs report on Thursday; FT warns that Europe’s major ports are gridlocked.

Notes/observations

- Indices are flat to mixed with European narrative unchanged since Friday. UK GDP, German CPI and retail sales was mostly in line. US futures on other hand, are higher, led by positive trade talk developments and easing geopolitical tensions in Middle East. USD continues to express weakness.

- Senate is scheduled to begin a "vote-a-rama" on the One Big Beautiful Bill Act (H.R. 1) today starting at 9:00 AM ET, which may last about 10-15 hours. Republicans are pushing passage by July 4th. Elon Musk maintains aggressive stance against it via barrage on X.

- GOP leaders aim to pass the Senate bill unchanged and send it to the president by Wednesday, but any tweak could delay it to mid-July or even August; the Senate draft tightened the 2027 “placed-in-service” deadline, revives leased-rooftop-solar credits, lets firms stack 45X credits if =65 % U.S. content, and cuts 45Y/48E support for China-linked projects.

- Update on trade talks: Canada rescinded digital services tax to progress US talks, wanting deal by July 21st. Trump hits at deal with India as officials extend stay in US. Japan talks are stalled over auto debate. France is ‘confident’ about reaching deal by July deadline and Taiwan notes ‘constructive progress’. Reminder that deadline is July 9th. Note the deadline stems from a 90-day pause on steep tariffs, initially announced on April 9th, which is set to expire on July 8th, with a specific focus on a potential 50% tariff on EU imports if no deal is reached by July 9th.

- FT reports that Europe’s major ports are gridlocked—thanks to Trump-era tariffs, low river levels, and a reshuffling of shipping-line alliances—forcing vessels to wait days and causing a months-long backlog.

- With July 4th US holiday, a shortened trading week will likely compress corporate news into front end of week and remove liquidity. Non-farm payrolls will be released on Thurs, July 3rd instead of typical Fri.

- Asia closed mixed with Hang Send underperforming -0.9%. EU indices -0.2%. US futures +0.5-0.6%. Gold +0.3%, DXY -0.2%; Commodity: Brent -0.1%, WTI -0.2%; Crypto: BTC -0.3%, ETH +1.0%.

Asia

- China Jun Manufacturing PMI: 49.7 v 49.6e (3rd month of contraction); Non-manufacturing PMI: 50.5 v 50.3e (31st month of expansion).

- Japan May Preliminary Industrial Production M/M: 0.5% v 3.5%e; Y/Y: -1.8% v +1.6%e.

- South Korea May Industrial Production M/M: -2.9% v +0.5%e; Y/Y: 0.2% v 3.0%e.

- New Zealand Jun ANZ Business Confidence: 46.3 v 36.6 prior.

Global conflict/tensions

- Iran Dep Foreign Min Majid Takht-Ravanchi stated that the US must rule out any further strikes on Iran if it wanted to resume diplomatic talks.

Europe

- UK Jun Lloyds Business Barometer: 51 v 50 prior.

- SNB Chief Schlegel said hurdles to negative rates are 'certain.

Americas

- Pres Trump stated that would love it if Fed Chair Powell would resign; I won't put in someone that wants to keep rates where they are.

- CBO: Senate version of President Donald Trump's tax and spending measure would add nearly $3.3 trillion to US deficits over a decade.

- Senate passed procedural vote (51-49) to open debate on the 'big beautiful bill'; (Bill itself still to be voted on). Sen Tillis (R-NC) became the third Republican Senator to indicate he would vote against the Trump tax bill (follows GOP Senators Paul (R-KY) and Johnson (R-WI).

- Senate vote on tax bill expected to start at 9 AM [on Mon]; House to vote on the Trump tax bill by as early as Wed.

Trade

- President Trump said he did not think he'll need to extend the July 9th trade deadline to secure deals with the US and avoid higher tariffs.

- US President Trump 'determined' to keep 25% tariff on Japan autos.

- EU and US said to be confident they would reach tariff deal by July 9th deadline.

- Canada rescinded digital services tax to advance broader trade negotiations with the United States (**Reminder: Trump stated that trade talks would not resume until Canada dropped ‘certain taxes.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.26% at 542.22, FTSE -0.27% at 8,775.39, DAX -0.07% at 23,983.37, CAC-40 -0.18% at 7,680.22, IBEX-35 -0.24% at 13,916.75, FTSE MIB -0.20% at 39,662.00, SMI -0.32% at 11,939.46, S&P 500 Futures +0.38%].

Market focal points/key themes

Equities

European indices opened higher across the board, but cut gains through the early part of the session; uncertainty regarding trade deal deadlines dampening risk appetite; among sectors trading in the green is tech; lagging sectors include industrials and clean energy after US Senate amendments to House bill; in other news, shares of shipping giant Maersk trading lower following FT report that Trump’s tariff policies combined with low river levels are causing Europe’s worst supply chain congestion since the coronavirus pandemic; no major events expected in the upcoming Americas session.

- Consumer discretionary: Zalando [ZAL.DE] +4.0% (analyst initiation).

- Energy: Vestas Wind Systems [VWS.DK] -6.5% (US Senate amendments to the bill), Nordex [NDX1.DE] -2.0% (analyst downgrade).

- Healthcare: Idorsia [IDIA.SE] +5.5% (synthetic glycan vaccine platform validated for the first time in humans) - Industrials: Maersk [MAERSKB.DK] -1.5% (Reportedly Trump’s tariff policies combined with low river levels are causing Europe’s worst supply chain congestion since the coronavirus pandemic, which expected to persist for at least several months - FT).

Speakers

- ECB de Guindos (Spain) noted Q2 and Q3 growth would be almost flat. Consumption as a driver had not happened, being held back by uncertainty. Current interest rate position is comparable with convergence to 2% inflation.

- Japan Trade Negotiator Akazawa stated that Japan and US were continuing talks in earnest. July 9th date is a milestone in negotiations.

- Pres. Trump posted on Truth Social that he was not even talking to Iran since the US totally obliterated their Nuclear Facilities.

- Iran Foreign Ministry spokesperson: IAEA cannot expect usual cooperation following US attacks on nuclear facilities.

Currencies/fixed income

- USD remained vulnerable into month end as sentiment continued to question the greenback’s global supremeacy.

- EUR/USD staying above the 1.17 level after hitting a multi-year high during the session at 1.1751.

- GBP/USD hovering around the 1.37 level as UK final GDP was unrevised.

- USD/JPY at 144.15 by mid-session.

- 10-year German Bund yield at 2.57% and 10-year Gilt yield at 4.48%. 10-year Treasury yield: 4.25%.

Economic data

- (FI) Finland May Retail Sales Volume Y/Y: -2.3% v +2.6% prior.

- (FI) Finland May GDP Indicator Y/Y: 2.1 v 0.9% prior.

- (UK) Q1 Final GDP Q/Q: 0.7% v 0.7% prelim; Y/Y: 1.3% v 1.3% prelim.

- (UK) Q1 Current Account Balance: -£23.5B v -£20.3Be.

- (DE) Germany May Retail Sales M/M: -1.6% v +0.5%e; Y/Y: 3.6% v 3.6%e.

- (DE) Germany May Import Price Index M/M: -0.7% v -0.4%e; Y/Y: -1.1% v -0.8%e.

- (SE) Sweden May Retail Sales M/M: % v 0.9% prior; Y/Y: -1.8% v +5.3% prior.

- (SE) Sweden Apr Non-Manual Workers Wages Y/Y: 2.5% v 3.3% prior.

- (SE) Sweden May Household Lending Y/Y: 2.4% v 2.3% prior.

- (DK) Denmark May Unemployment Rate: 2.5% v 2.5% prior; Gross Unemployment Rate : 2.9% v 2.5% prior.

- (DK) Denmark Q1 Final GDP Q/Q: -1.3% v -0.5% prelim; Y/Y: 2.3% v 3.6% prelim.

- (ZA) South Africa May M3 Money Supply Y/Y: 6.9% v 6.1% prior; Private Sector Credit Y/Y: 5.0% v 4.5%e.

- (HU) Hungary May PPI M/M: -0.7% v -0.4% prior; Y/Y: 6.9% v 7.9% prior.

- (CH) Swiss Q1 Foreign Exchange Transactions (CHF): 0.1B v 0.1B prior.

- (CH) Swiss Jun KOF Leading Indicator: 96.1 v 99.3e.

- (AT) Austria May PPI M/M: -0.3% v -0.9% prior; Y/Y: -0.6% v -0.2% prior.

- (TR) Turkey May Trade Balance: -$#6.7B v -$6.5Be v.

- (TR) Turkey May Unemployment Rate: 8.4% v 8.6% prior.

- (TH) Thailand May Current Account Balance: -$0.3B v +$0.3Be; Overall Balance of Payments (BOP): $0.4B v $3.4B prior; Trade Account Balance: +$3.4B v -$1.4B prior; Exports Y/Y: 18.5% v 9.9% prior; Imports Y/Y: 19.2% v 17.3% prior.

- (EU) Euro Zone May M3 Money Supply Y/Y: 3.9% v 4.0%e.

- (DE) Germany Jun CPI North Rhine Westphalia M/M: -0.1% v 0.2% prior; Y/Y: 1.8% v 2.0% prior.

- (DE) Germany Jun CPI Hesse M/M: 0.1% v 0.0% prior; Y/Y: 2.3% v 2.3% prior.

- (DE) Germany Jun CPI Bavaria M/M: -0.1% v +0.1% prior; Y/Y: 1.8% v 2.1% prior.

- (DE) Germany Jun CPI Brandenburg M/M: 0.2% v 0.0% prior; Y/Y: 2.2% v 2.2% prior.

- (DE) Germany Jun CPI Saxony M/M: 0.2% v 0.0% prior; Y/Y: 2.4% v 2.3% prior.

- (DE) Germany Jun CPI Baden Wuerttemberg M/M: +0.2% v -0.1% prior; Y/Y: 2.3% v 2.2% prior.

- (CH) Swiss Weekly Total Sight Deposits (CHF): 460.7B v 442.5B prior; Domestic Sight Deposits: 425.8B v 430.0B prior.

- (ES) Spain Apr Current Account: €1.4B v €1.4B prior.

- (IT) Italy Q1 YTD Budget Deficit to GDP: 8.5% v 3.4% prior.

- (NO) Norway Central Bank (Norges) July Net FX Transactions (NOK): -276M v -26M prior.

- (PL) Poland Jun Preliminary CPI M/M: 0.1% v 0.1%e; Y/Y:4.1 % v 4.0%e.

- (CZ) Czech May M2 Money Supply Y/Y: 3.5% v 3.2% prior.

- (UK) May Net Consumer Credit: £0.9B v £1.1Be; Net Lending: £2.1B v £2.5Be.

- (UK) May Mortgage Approvals: 63.0K v 60.8Ke.

- (UK) May M4 Money Supply M/M: +0.2% v -0.1% prior; Y/Y: 3.5% v 3.2% prior; M4 Ex IOFCs 3M-Annualised: 3.3% v 2.8% prior.

- 04:30 (HK) Hong Kong May M3 Money Supply Y/Y: % v 6.6% prior.

- (IT) Italy Jun Preliminary CPI M/M: 0.2% v 0.2%e; Y/Y: 1.7% v 1.7%e.

- (IT) Italy Jun CPI EU Harmonized M/M: 0.2% v 0.3%e; Y/Y: 1.7% v 1.8%e.

- (IS) Iceland May Final Trade Balance (ISK): -63.1B v -63.4B prelim.

- (GR) Greece Mar Retail Sales Value Y/Y: % v 0.3% prior; Retail Sales Volume Y/Y: % v 1.2% prior.

Fixed income issuance

- (PL) Poland opened its book to sell EUR-denominated 7-year and 12-year bonds via syndicate.

- (DK) Denmark sold total DKK0M (nil) in 3-month and 6-month Bills; Rejects all bids.

- (NO) Norway sold NOK2.0B vs. NOK2.0B indicated in 3-month bills; Avg Yield: 4.09% v 4.32% prior; Bid-to-cover: 1.78x v 2.81x prior.

Looking ahead

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays).

- 06:00 (IE) Ireland Jun Preliminary CPI EU Harmonized Y/Y: No est v 1.4% prior.

- 06:00 (PT) Portugal Jun Preliminary CPI M/M: No est v 0.3% prior; Y/Y: No est v 2.3% prior; CPI EU Harmonized M/M: No est v 0.6% prior; Y/Y: No est v 1.7% prior.
- 06:00 (RO) Romania to sell RON400M in 6.3% Apr 2028 bonds.

- 06:00 (IL) Israel to sell combined ILS2.75B in 2029, 2031, 2033, 2034, 2035 and 2042 bonds.

- 06:30 (IN) India May Industrial Production Y/Y: 2.3%e v 2.7% prior.

- 06:30 (IN) India May Fiscal Deficit YTD (INR): No est v 1.863T prior.

- 07:00 (EU) ECB Strategic Assessment.

- 07:25 (BR) Brazil Central Bank Weekly Economists Survey.

- 07:30 (BR) Brazil May Nominal (overall) Budget Balance (BRL): -115.0Bet v -55.5B prior; Primary Budget Balance: -43.7B v 14.2B prior; Net Debt % GDP: 62.0%e v 61.7% prior.

- 08:00 (DE) Germany Jun Preliminary CPI M/M: 0.2%e v 0.1% prior; Y/Y: 2.1%e v 2.1% prior.

- 08:00 (DE) Germany Jun Preliminary CPI EU Harmonized M/M: 0.2%e v 0.2% prior; Y/Y: 2.1%e v 2.1% prior.

- 08:00 (ZA) South Africa May Trade Balance (ZAR): 26.0Be v 14.1B prior.

- 08:00 (ZA) South Africa May Monthly Budget Balance (ZAR): No est v -64.6B prior.

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 08:00 (IN) India announces details of upcoming bond sale (held on Fridays).

- 08:00 (ES) Spain Debt Agency (Tesoro) size announcement on upcoming issuance.

- 09:00 (FR) France Debt Agency (AFT) to sell €5.7-7.3B in 3-month, 6-month and 12-month bills.

- 09:00 (RU) Russia Q1 Final Current Account: No est v $19.8B prelim.

- 09:00 (CL) Chile May Retail Sales Y/Y: No est v 4.5% prior; Commercial Activity Y/Y: No est v 3.1% prior.

- 09:00 (CL) Chile May Unemployment Rate: No est v 8.8% prior.

- 09:00 (CL) Chile May Industrial Production Y/Y: No est v 3.8% prior; Manufacturing Production Y/Y: No est v 0.0% prior; Total Copper Production: No est v 463.6K tons prior.

- 09:45 (US) Jun Chicago Purchase Managers Index (PMI): 43.0e v 40.5 prior.

- 10:00 (US) Fed’s Bostic.

- 10:01 (AU) Australia Jun Cotality Home Value M/M: No est v 0.5% prior.

- 10:30 (US) Jun Dallas Fed Manufacturing Activity: -14.0e v -15.3 prior.

- 11:00 (MX) Mexico May Net Outstanding Loans (MXN): No est v 6.944T prior.

- 11:30 (US) Treasury to sell 13-Week and 26-Week Bills.

- 13:00 (US) Fed’s Goolsbee.

- 15:00 (EU) ECB chief Lagarde at Sintra conference.

- 15:00 (AR) Argentina Apr Economic Activity Index (Monthly GDP) M/M: No est v -1.8% prior; Y/Y: No est v 5.6% prior.

- 16:00 (US) Weekly Crop Progress Report.

- 18:00 (NZ) New Zealand NZIER Business Opinion Survey.

- 18:45 (NZ) New Zealand May Building Permits M/M: No est v -15.6% prior.

- 19:00 (AU) Australia Jun Final PMI Manufacturing: No est v 51.0 prelim.

- 19:01 (UK) Jun BRC Shop Price Index Y/Y: No est v -0.1% prior.

- 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 86.7 prior.

- 19:50 (JP) Japan Q2 Tankan Large Manufacturing Index: 10e v 12 prior; Large Manufacturing Outlook: 9e v 12 prior.

- 19:50 (JP) Japan Q2 Tankan Large Non-Manufacturing Index: 34e v 35 prior; Large Non-Manufacturing Outlook: 29e v 28 prior; Large All Industry Capex Estimate FY: 10.0%e v 3.1% prior.

- 19:50 (JP) Japan Q2 Tankan Small Manufacturing Index: 0e v 2 prior; Small Manufacturing Outlook: -3e v -1 prior.

- 19:50 (JP) Japan Q2 Tankan; Small Non-Manufacturing Index: 15e v 16 prior; Small Non-Manufacturing Outlook: 9e v 9 prior.

- 20:00 (KR) South Korea Jun Trade Balance: $8.4Be v $6.9B prior; Exports Y/Y: +4.9%e v -1.3% prior; Imports Y/Y: +5.6%e v -5.3% prior.

- 20:01 (IE) Ireland Jun PMI Manufacturing: No est v 52.6 prior.

- 20:30 (JP) Japan Jun Final PMI Manufacturing: No est v 50.4 prelim.

- 20:30 (KR) South Korea Jun PMI Manufacturing: No est v 47.7 prior.

- 20:30 (TW) Taiwan Jun PMI Manufacturing: No est v 48.6 prior.

- 20:30 (ID) Indonesia Jun PMI Manufacturing: No est v 47.4 prior.

- 20:30 (MY) Malaysia Jun PMI Manufacturing: No est v 48.8 prior.

- 20:30 (PH) Philippines Jun PMI Manufacturing: No est v 50.1 prior.

- 20:30 (TH) Thailand Jun PMI Manufacturing: No est v 51.2 prior.

- 20:30 (VN) Vietnam Jun PMI Manufacturing: No est v 49.8 prior.

- 20:30 (SG) Singapore Q2 Preliminary URA Private Home Prices Q/Q: No est v 0.8% prior.

- 21:45 (CN) China Jun Caixin PMI Manufacturing: 49.2e v 48.3 prior.

- 23:35 (JP) Japan to sell 10-year JGB Bonds.