Rise in Copper lifts EU miners – TACO trade in full effect

EU mid-market update: Rise in copper lifts EU miners; TACO trade in full effect; Grok 4 impresses with intelligence but initially limited in access; TSMC Q2 sales beat estimates; Bitcoin gets the tech tailwinds.

Notes/observations

- FTSE100 leads Europe, specifically the miners Rio Tinto, Glencore and Anglo American as basic resources sector outperforms due to exploding metal prices and optimism from China stimulus.

- Gold has edged higher, moving as US dollar maintains weakness. Analyst notes ongoing trade tensions and tariff-driven inflation boost gold’s appeal as a hedge; Fed minutes showed officials divided on rate outlook.

- Overall, TACO ‘Trump always chickens out’ trade is the main theme among investors and traders, overlooking recent tariff threats.

- The tech led rally that pushed Nvidia over $4T market cap for first time during NY session yesterday, is supporting risk appetite in crypto space, with Bitcoin hovering near all-time highs.

- Elon Musk points out that new Grok 4 scored 15.9% on the notoriously difficult ARC-AGI-2 benchmark—which requires models to learn mini-skills from examples and then demonstrate them at test time—showing non-zero levels of fluid intelligence. He adds that within one to two years it will uncover new physics and invent transformative technologies, heralding an AI-driven “intelligence Big Bang.”

- PageGroup in its trading update note improvements in activity and confidence in Asia and the US offset by ongoing difficulty converting accepted offers into placements. Clients’ tighter recruitment budgets and increased risk aversion have lengthened time-to-hire and kept salary offers below 2022/early 2023 levels—raising counteroffer risk—while the US business delivered its third straight quarter of double-digit growth (14%), led by engineering and a stronger construction segment.

- Asia closed mixed with KOSPI outperforming +1.6%. EU indices -0.6% to +1.2%. US futures -0.2%. Gold +0.5%, DXY -0.1%; Commodity: Brent -0.2%, WTI -0.3%; Crypto: BTC +2.3%, ETH +6.8%.

Asia

- Bank of Korea (BOK) left 7-Day Repo Rate unchanged at 2.50% (as expected). Reiterated stance to adjust timing and pace of any further rate cuts. 2025 inflation largely in line with expectations.

- BOK Gov Rhee post rate decision press conference noted that the decision to keep policy steady was unanimous; Stressed the need to maintain easing policy. Reiterated that 4 of 6 members were open to rate cut in the next 3 months.

- Japan Jun PPI M/M: -0.2% v -0.1%e; Y/Y: 2.9% v 2.9%e.

- Reports circulated that China was likely to 'ramp up' fiscal support during H2.

Europe

- Bank of England Gov Bailey stated that he did not think it was appropriate for ministers to mandate investment in British assets.

- Dutch pension funds said to be set to sell €125B of govt bonds.

Americas

- Jun FOMC Jun Minutes noted that a couple of participants would be open to considering a rate cut as soon as the July meeting if data evolved as expected (Bowman and Waller have said as much since the FOMC meeting). Most policymakers see risks tariffs will cause ‘persistent’ inflation.

Trade

- Trump sent trade letter to Brazil imposing 50% tariff, starting Aug 1st. Criticized treatment of former Pres Bolsanaro, "attacks on Free Elections", and censorship of Americans.

- Brazil Pres Lula stated that any unilateral measure (by the US) to increase tariffs would be met with response in accordance with law in Brazil; Stressed that the country was a Sovereign nation.

- Pres Trump announced the effective date for the 50% rate on copper exports to the US to be Aug 1st.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +0.56% at 553.06, FTSE +1.10% at 8,964.78, DAX +0.35% at 24,606.82, CAC-40 +0.63% at 7,928.40, IBEX-35 -0.54% at 14,167.16, FTSE MIB -0.25% at 40,732.00, SMI +0.75% at 12,080.23, S&P 500 Futures -0.10%].

Market focal points/key themes: European indices open generally higher and remained upbeat through the early part of the session; among better performing sectors are materials and consumer discretionary; lagging sectors include real estate and utilities; Aalberts acquires GVT; earnings expected in the upcoming US session include Delta Airlines, ConAgra and Brunello Cucinelli.

Equities

- Consumer discretionary: Pagegroup [PAGE.UK] +2.0% (trading update; notes better US environment, but says its clients’ tightened recruitment budgets and risk aversion lengthening time to hire), WPP [WPP.UK] +2.0% (new CEO), DCC [DCC.UK] +1.0% (trading update), Barry Callebaut [BARN.CH] -13.5% (9M results, cuts FY guidance) - Consumer staples: Suedzucker [SZU.DE] -2.0% (Q1 results).

- Financials: Santander [SAN.ES] -2.0% (exposure to Brazil as Trump threatened 50% tariff).

- Industrials: Gerresheimer [GXI.DE] +3.5% (Q2 results).

- Materials: Rio Tinto [RIO.UK] +3.5% (Trump confirmed effective date for copper tariffs; China said to likely 'ramp up' fiscal support during H2).

Speakers

- ECB's Villeroy (France) reiterated view that expected French GDP to growth 0.6% this year.

- China Commerce Ministry (MOFCOM) stated that was maintaining dialogue with US at various levels.

- US Sec of State Rubio stated that US was committed partner to ASEAN. Common goal is free and open Indo-Pacific region.

Currencies/fixed income

- Another quiet EU session with little impetus for fresh position taking. Dealers noting that President Trump latest tariff threats prompting headwinds for the greenback.

- EUR/USD continued to stay above the 1.17 level in quiet trade.

- USD/JPY at 146.35 by mid-session as Japanese long end of the yield curve stayed calm for a 2nd straight day.

- 10-year German Bund yield at 2.66% and 10-year Gilt yield at 4.58%. 10-year Treasury yield: 4.34%.

Economic data

- (NL) Netherlands May Manufacturing Production M/M: +0.5% v -1.1% prior; Y/Y: +0.8% v -0.6% prior; Industrial Sales Y/Y: -2.9 v -0.7% prior.

- (DE) Germany Jun Final CPI M/M: 0.0% v 0.0% prelim; Y/Y: 2.0% v 2.0% prelim.

- (DE) Germany Jun Final CPI EU Harmonized M/M: 0.1% v 0.1% prelim; Y/Y: 2.0% v 2.0% prelim.

- (SE) Sweden May GDP Indicator M/M: -0.2% v -0.2%e; Y/Y: 0.5% v 0.9% prior.

- (SE) Sweden May Private Sector Production M/M: -0.1% v +1.8% prior; Y/Y: 2.0% v 2.8% prior.

- (SE) Sweden May Industrial Orders M/M: -1.4% v -6.5% prior; Y/Y: -2.4% v +7.4% prior.

- (SE) Sweden May; Industry Production Value Y/Y: 5.0% v 5.3% prior; Service Production Value Y/Y: 1.2% v 2.4% prior.

- (SE) Sweden May Household Consumption M/M: -1.2% v +0.4% prior; Y/Y: 0.6% v 2.6% prior.

- (NO) Norway Jun CPI M/M: 0.2% v 0.4% prior; Y/Y: 3.0% v 3.2%e.

- (NO) Norway Jun CPI Underlying M/M: 0.5% v 0.5%e; Y/Y: 3.1% v 3.0%e.

- (DK) Denmark Jun CPI M/M: 0.2% v 0.1% prior; Y/Y: 1.9% v 1.6% prior.

- (DK) Denmark Jun; CPI EU Harmonized M/M: 0.3% v 0.0% prior; Y/Y: 1.8% v 1.5% prior.

- (RO) Romania Q1 Final GDP Q/Q: 0.0% v 0.0% prelim; Y/Y: 0.3% v 0.3% prelim.

- (AT) Austria May Industrial Production M/M: -0.8% v -0.5% prior; Y/Y: -0.1% v -0.1% prior.

- (CZ) Czech Jun Final CPI M/M: 0.3% v 0.3% prelim; Y/Y: 2.9% v 2.9% prelim.

- (CZ) Czech May Import Price Index Y/Y: -0.1% v -0.8% prior; Export Price Index Y/Y: +0.3% v -0.5% prior.

- (TR) Turkey May Industrial Production M/M: +3.1% v -3.2% prior; Y/Y: 4.9% v 3.1% prior.

- (IT) Italy May Industrial Production M/M: -0.7% v -0.2%e; Y/Y:-0.9 % v 0.4%e; Industrial Production NSA (unadj) Y/Y: -3.8% v -1.4% prior.

- (GR) Greece May Industrial Production Y/Y: -2.0% v -4.3% prior.

Fixed income issuance

- (IT) Italy Debt Agency (Tesoro) sold €7.5B vs. €7.5B indicated in 12-month bills; Avg Yield: 1.961% v 1.983% prior; Bid-to-cover: 1.45x v 1.41x prior.

Looking ahead

- (EG) Egypt Central Bank (CBE) Interest Rate Decision: expected to cut Deposit Rate by 100bps to 23.00%; Lending Rate: No est v 25.00% prior.

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

- 05:30 (HU) Hungary Debt Agency (AKK) to sell combined HUF60B in 3-year, 5-year and 10-year bonds.

- 05:40 (UK) BOE 7-day short-term repo operation (STR).

- 05:40 (VN) Vietnam Finance Ministry announcement on upcoming bond issuance (held on Wed).

- 06:00 (IE) Ireland May Industrial Production M/M: No est v -15.2% prior; Y/Y: No est v 18.1% prior.

- 06:00 (IE) Ireland Jun CPI M/M: No est v 0.0% prior; Y/Y: No est v 1.7% prior.

- 06:00 (IE) Ireland Jun CPI EU Harmonized M/M: No est v 0.0% prior; Y/Y (final): No est v 1.6% prelim.

- 06:00 (PT) Portugal Jun Final CPI M/M: No est v 0.1% prelim; Y/Y: No est v 2.4% prelim.

- 06:00 (PT) Portugal Jun Final CPI EU Harmonized M/M: No est v 0.1% prelim; Y/Y: No est v 2.1% prelim.

- 06:00 (PT) Portugal May Trade Balance: No est v -€3.0B prior.

- 06:00 (IL) Israel Jan Consumer Confidence: No est v 62 prior.

- 07:00 (ZA) South Africa May Manufacturing Production M/M: 0.3%e v 1.9% prior; Y/Y: -1.4%e v -6.3% prior.

- 08:00 (BR) Brazil Jun IBGE Inflation IPCA M/M: 0.2%e v 0.3% prior; Y/Y: 5.3%e v 5.3% prior.

- 08:00 (IS) Iceland Jun Unemployment Rate: No est v 3.7% prior.

- 08:00 (BR) Brazil July CONAB Crop Production.

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

- 08:30 (US) Initial Jobless Claims: 235Ke v 233K prior; Continuing Claims: 1.97Me v 1.964M prior.

- 08:30 (US) Weekly USDA Net Export Sales.

- 08:30 (CL) Chile Central Bank Economist Survey.

- 09:00 (RU) Russia Gold and Forex Reserve w/e July 4th: No est v $687.7B prior.

- 09:00 (US) Fed’s Musalem.

- (EG) Egypt Central Bank Interest Rate Decision.

- 10:30 (US) Weekly EIA Natural Gas Inventories.

-11:00 (MX) Mexico Central Bank (Banxico) Jun Minutes.

- 11:00 (UK) BOE’s Breeden.

- 11:30 (US) Treasury to sell 4-Week and 8-Week Bills.

- 12:30 (US) Fed’s Waller.

- 13:00 (US) Treasury to sell 30-year binds reopening.

- 14:30 (US) Fed’s Daly.

-18:30 (NZ) New Zealand Jun Manufacturing PMI: No est v 47.5 prior.

-19:00 (PE) Peru Central Bank (BCRP) Interest Rate Decision: Expected to leave Reference Rate unchanged at 4.50%.

-20:00 (KR) South Korea July 1-10th Exports Y/Y: No est v 5.4% prior; Imports Y/Y: No est v 11.5% prior.