Renewed Feud Between Musk And Trump Drags Tesla (TSLA) Share Price Lower

Economic

Stocks

Summary:

The US Senate yesterday narrowly approved Trump’s so-called “big, beautiful budget bill.”Elon Musk, who had previously criticised the bill for potentially adding $3.3 trillion to the national debt, wa

The US Senate yesterday narrowly approved Trump’s so-called “big, beautiful budget bill.”

Elon Musk, who had previously criticised the bill for potentially adding $3.3 trillion to the national debt, warned that Republican lawmakers who supported it would face political consequences. In a post on X, Musk wrote:“Every member of Congress who campaigned on reducing government spending and then immediately voted for the biggest debt increase in history should hang their head in shame! And they will lose their primary next year if it is the last thing I do on this Earth.”

He also reiterated his intention to establish a third political force under the name “America Party.”

In response, President Trump issued sharp threats:

→ to apply federal pressure on Musk’s companies by revisiting existing subsidies and government contracts (estimated by The Washington Post at $38 billion);

→ to deport Musk back to South Africa.

The market responded immediately to this renewed escalation in the Trump–Musk conflict. Tesla (TSLA) shares fell by over 5% yesterday, forming a significant bearish gap.

Technical Analysis of TSLA Stock Chart

Eight days ago, we analysed the TSLA price chart, continuing to observe price action within the context of an ascending channel (indicated in blue). At that point:

→ In mid-June, when the initial Musk–Trump tensions surfaced, TSLA managed to hold within the channel. However, as of yesterday, the price broke below the lower boundary, casting doubt on the sustainability of the uptrend that had been in place since March–April;

→ The price breached the lower channel limit near the $315 level — a zone that previously acted as support. This suggests that $315 may now serve as a resistance level.

As a result, optimism related to the late-June launch of Tesla’s robotaxi initiative has been eclipsed by concerns that the Musk–Trump confrontation may have broader implications.

If the former allies refrain from further escalation, TSLA may consolidate into a broadening contracting triangle (its upper boundary marked in red) in the near term, ahead of Tesla’s Q2 earnings release scheduled for 29 July.

Source: FXOpen

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Gerik

Economic

From Financial Hub to Innovation Ecosystem: Redefining the International Financial Center Model

In the digital era, International Financial Centers (IFSCs) are evolving beyond their traditional role as capital aggregators. They now function as innovation ecosystems tightly interwoven with financial technology (fintech). According to the Bank for International Settlements (BIS), fintech has the potential to revolutionize the delivery of financial services, foster new business models, and promote sustainable financial ecosystems.

In Asia, countries like Singapore, Hong Kong (China), and Shanghai have already positioned their IFSCs as fintech accelerators. Singapore’s Monetary Authority (MAS), for instance, introduced a FinTech Regulatory Sandbox in 2016—later upgraded to Sandbox Plus—to fast-track regulatory approval and financial support for innovation. Simultaneously, the city-state has invested in open banking, financial data infrastructure, and capital access, placing fintech at the heart of its digital economy strategy.

Hong Kong, meanwhile, attracted significant foreign investment by licensing digital banks such as WeLab, ZA Bank, and Mox Bank, embedding fintech into its modern financial architecture. Shanghai’s roadmap to becoming an IFSC by 2035 includes leveraging green finance and blockchain technology, aiming to make fintech a direct contributor to national financial objectives.

Vietnam's Fintech Moment: A Policy Breakthrough with Strategic Ambition

Vietnam has entered the fintech race with renewed determination. On June 27, 2025, the National Assembly passed a resolution to establish an International Financial Center, effective from September 1, 2025. The resolution outlines preferential policies, including a regulatory sandbox for fintech innovation, designed to test and validate emerging financial services under controlled conditions.

With a GDP ranked among the world’s top 32, Vietnam’s ambition is not merely to catch up but to assert a position on the regional financial map. The sandbox mechanism will serve as both an incubator and a filter, allowing qualified fintechs to experiment with services such as micro-lending, digital insurance, and asset tokenization before commercial launch.

Vice Governor of the State Bank of Vietnam, Phạm Tiến Dũng, emphasized that Vietnam’s fintech regulations are gradually maturing. He views the new financial center not only as a magnet for foreign capital but also as a stress test for the local financial ecosystem’s capacity for innovation and resilience.

Emerging Players and Early Momentum in Vietnam's Fintech Sector

Companies such as Viettel Money, Timo, and VnPay have already gained strong footholds by offering comprehensive digital financial services and building robust user bases. These firms are expected to be early participants in the sandbox environment after July 1, positioning themselves to refine and scale their products regionally. The shift from legacy systems to agile, tech-driven financial platforms will likely accelerate with regulatory support and investment incentives provided through the new IFSC.

The potential for these fintechs to lead Vietnam’s digital finance sector lies in their ability to balance innovation with compliance. Data privacy, risk governance, and cross-border regulatory alignment will be critical metrics as they seek to attract funding and form international partnerships.

Lessons from Asia’s Leading Financial Centers

Singapore, Hong Kong, and Shanghai demonstrate that fintech success requires more than favorable market conditions. Institutional strength, flexible yet robust policy frameworks, and strategic foresight are equally important. For Vietnam, establishing an IFSC will require coordinated efforts among government agencies, financial regulators, and private-sector stakeholders.

Access to global capital, exposure to advanced technologies, and the transfer of international financial expertise will offer Vietnamese fintechs a chance to integrate into high-value regional financial networks. However, this also exposes them to increased scrutiny and competition, particularly in areas such as cybersecurity standards, transaction transparency, and capital adequacy.

Fintech Vietnam at a Strategic Crossroads

Vietnam’s new IFSC initiative marks a pivotal moment for the country’s fintech sector. It is both a platform for innovation and a testing ground for global integration. While regulatory sandboxes offer a low-risk space for trial, the broader challenge lies in building institutional capabilities that align with international financial norms.

Success will depend not only on regulatory support but also on the fintech community’s preparedness to scale, comply, and compete. If Vietnamese firms can meet these demands, they will not only help elevate the country’s financial status but also contribute meaningfully to the transformation of Asia’s digital economy. The coming years will determine whether Vietnam can move from ambition to realization and secure its place among the region’s emerging financial powers.

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Economic

Inflation Rises but Remains Within Policy Comfort Zone

In June, South Korea's consumer price index (CPI) increased by 2.2% year-on-year, according to data from the national statistics agency. This is the highest rate since January and exceeds the 1.9% increase recorded in May, as well as the 2.1% forecast by economists surveyed by The Wall Street Journal. Despite this uptick, the figure remains within the Bank of Korea’s (BoK) 2% inflation target range, which strengthens the case for maintaining its current dovish policy stance.

On a monthly basis, consumer prices remained flat in June, aligning with market expectations. This follows a 0.1% decrease in May compared to April, showing stability in short-term price movement.

Core Inflation and Sectoral Price Movements

Core inflation, which excludes volatile food and energy prices, rose by 2.0% year-on-year and inched up by 0.1% from the previous month. The breakdown of the CPI basket shows a divergence in price trends: processed food prices rose, while gasoline and agricultural product prices fell. These offsetting trends helped moderate overall inflation despite sectoral shifts.

The relatively muted impact of global energy prices, likely due to easing tensions in the Middle East, has also contributed to the restrained inflation environment, according to market analysts. This correlation between geopolitical stability and fuel price movements appears to have softened headline inflation pressure in the short term.

Weak Growth Outlook Underpins Continued Monetary Easing

In May, the Bank of Korea lowered its 2025 GDP growth forecast and cut the benchmark interest rate by 25 basis points to 2.50%, aiming to cushion the economy from slowing momentum. The central bank now projects just 0.8% growth in 2025, down from a 1.5% forecast in February and significantly below the 2.0% expansion recorded in 2024.

This weakening outlook reinforces expectations that BoK will maintain or further ease its monetary policy in the coming months. Analysts believe that with inflation hovering around the target and economic growth faltering, the policy environment remains supportive of additional rate cuts.

Caution Remains Amid Strength in Exports and Housing

Despite the overall case for continued easing, there are areas of economic resilience that may temper the speed of interest rate cuts. Semiconductor exports rebounded in June, providing a key boost to South Korea’s trade figures even in the face of heightened global tariffs, particularly from the United States. Moreover, the housing market in Seoul is heating up more than expected, introducing potential risks of asset bubbles.

These developments suggest a nuanced policy landscape. While inflation and growth metrics broadly support dovish policy, the central bank may need to proceed more cautiously if export performance and housing demand remain robust.

June’s inflation data confirms a modest acceleration in prices but still within a range that allows the central bank to focus on supporting the broader economy. With weak domestic growth prospects and inflation near the policy target, the BoK is expected to continue its accommodative stance. However, it must balance this approach against pockets of economic strength and sector-specific overheating risks, particularly in real estate and tech exports. The path ahead will likely involve gradual adjustments rather than aggressive easing, shaped by both domestic dynamics and external pressures.

Source: Reuters

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Michelle

Economic

Forex

US President Donald Trump threatened Japan with tariffs of up to 35% as he ramped up tensions for a third straight day, fueling fears of a worst-case scenario among market players and raising doubts over Tokyo’s tactics in trade talks.

Japan should be forced to “pay 30%, 35% or whatever the number is that we determine, because we also have a very big trade deficit with Japan,” Trump said, again flagging the possibility that across-the-board tariffs could go much higher than the 24% initially penciled in for July 9. “I’m not sure we’re going to make a deal. I doubt it with Japan, they’re very tough. You have to understand, they’re very spoiled.”

Market participants and analysts warned against taking Trump’s comments at face value and suggested that some kind of deal will eventually get done. But they also warned that Prime Minister Shigeru Ishiba’s government may need to change tack from a friendly and firm stance that is now leading the two sides to brinkmanship.

“The ball is in Japan’s court now, and if Tokyo hesitates, it’s all over,” said Chihiro Ota, senior strategist at SMBC Nikko Securities. “If Japan doesn’t properly respond to Trump’s call to the table, he’ll only get more hostile. Ishiba should get on the phone with him right away.”

Trump’s latest threat fits in with a high-pressure deal-making strategy that sometimes results in big last-minute concessions on both sides, as seen with China, but market players still need to game out how to position themselves should talks founder.

While few analysts see Japan’s stocks collapsing on a no-deal scenario, some of them forecast the Nikkei 225 to fall into the 38,000 range, a decline of more than 4%, rather than rallying above 40,000 if there’s an agreement.

The Nikkei 225 was down 1% at 39,593 at the end of the morning session Wednesday while the yen was trading at 143.57 against the dollar, up around 0.1%.

Japan has so far stood firm in negotiations over across-the-board reciprocal tariffs, insisting that they be removed along with additional sectoral tariffs on autos, steel and aluminum. The car duties are particularly painful for Japan as the industry contributes the equivalent of almost 10% of gross domestic product and employs around 8% of the workforce.

Tokyo has insisted that a “win-win” deal must encompass all the tariffs in one go with Ishiba preferring no deal to a bad deal ahead of a July 20 upper house election. The prime minister on Wednesday reiterated his view that focusing on jobs and investment in the US was the way forward, just like it was for Nippon Steel as it patiently sought to change Trump’s view and take over US Steel.

But as July 9 gets closer, some observers say more needs to be done.

“We have to work on Trump himself, to first try to avoid the tariffs to be imposed from July 9,” said Ichiro Fujisaki, former Japanese ambassador to the US, adding that the president’s remarks show that Tokyo hasn’t brought enough to the table yet.

“We don’t have something like rare earths but the US is dependent on Japanese industry as well. About half of materials for making semiconductors come from Japanese industry,” Fujisaki said, pointing to a possible area of leverage, too.

In the meantime, market players are evaluating the potential scale of the fallout.

“There is a lot more risk of things falling apart than is being priced in by the market,” said Zuhair Khan, a fund manager at UBP Investments. “There is always the risk of a policy blunder by either side.”

He points to the 32,000 Nikkei level on the day Trump first announced the reciprocal tariffs. “If the probability of a no deal is 25% then the Nikkei should be at 38,000.”

The point of imposing a deadline in negotiations is to create an opportunity for leverage, so it’s not surprising to see Trump pushing high tariffs as a threat to push for better deals as the date approaches, said Phillip Wool, head of portfolio management at Rayliant Global Advisors Ltd.

“There’s also an element of political theater here, as Trump’s narrative to American voters is that the US has been bullied on trade for so long, and there’s clearly a desire to look ‘tough’ on trade,” Wool said. “But there has to be a face-saving deal at some point so that it looks like the negotiation was truly a success as opposed to the mutually assured destruction of impasse and perpetually high tariffs.”

Like some other market players, he is wary of an overly pessimistic knee-jerk response to each remark Trump makes. If there is a big selloff in a worst-case scenario, Wool sees it as a great buying opportunity for long-term, active investors.

Strategists are split on how a bad scenario might play out for the yen. While some such as SBI Liquidity Market Co.’s Marito Ueda see the possibility of risk aversion sparking a strengthening of Japan’s currency to the 138 range against the dollar, others see a weakening as more likely.

A stalemate in trade talks would likely delay the Bank of Japan’s next interest rate hike, especially if it led to tariffs of up to 35% in the meantime, said Akira Moroga, chief market strategist at Aozora Bank. Still, movement would slow after the 145 mark, making a push past 147 difficult, he said.

Still, the consensus is that a deal will be reached sooner or later, and that Japan will have to concede more ground to achieve it.

“If it’s concluded I don’t think it’s going to be a win-win situation,” said Fujisaki. “Maybe a capital-letter ‘WIN’ for US, but a small letter ‘win’ for Japan.”

Source: Bloomberg Europe

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Gerik

Economic

Record Jet Fuel Shipments Reflect Strategic Trade Shift

Northeast Asia sent the largest volume of jet fuel to Europe in nearly a year in June, as traders leveraged strong price differentials, reduced freight rates, and ample supply. According to data from shiptracking platform Kpler and multiple market sources, approximately 350,000 metric tons (2.8 million barrels) of jet fuel were shipped from South Korea and China, with trader estimates climbing as high as 465,000 tons for June bookings.

This redirection of fuel flows represents a tactical shift by refiners and trading houses in response to an attractive arbitrage window between Asian and European jet fuel prices. With Northwest Europe offering a premium of $60 to $80 per ton over Asia during most of June, market players seized the opportunity despite ongoing geopolitical risks.

Production Recovery and Freight Dynamics Spur Exports

Refiners in Northeast Asia ramped up output after concluding seasonal maintenance. Simultaneously, rising product cracks—indicative of higher refining margins—encouraged increased production of aviation fuel. Ivan Mathews, head of APAC analysis at Vortexa, noted that these favorable margins coincided with reduced spot demand from Asia’s regional importers, pushing traders to pivot exports westward.

Freight conditions further supported this strategy. The cost to transport 90,000 tons of jet fuel on LR2 tankers dropped to a one-month low of $40–$45 per ton, especially for charters made before tensions escalated between Iran and Israel on June 13. At least four newly built LR2 vessels were booked for East-to-West voyages in June and July. These maiden voyages tend to be cheaper, as shipowners seek to establish mileage and build tracking history.

Traders Capitalize on Margins Amid Middle East Risk

Trading firms such as Vitol, BP, Aramco Trading, Gunvor, and Unipec—the trading unit of Sinopec—were among those that chartered the five tankers exporting the jet fuel. Analysts noted these trade flows were driven by opportunism, amplified by geopolitical fears that lifted Northwest European crack spreads, making the arbitrage even more profitable.

Europe’s jet fuel demand, which typically peaks during the summer travel season, also played a role in attracting Asian cargoes. According to Eurocontrol, flight activity in Europe rose 5.2% year-on-year and 7.8% month-on-month in June, supporting stronger physical market demand.

Oversupply in Asia Remains a Limiting Factor for Prices

Despite the surge in exports, analysts do not expect this East-to-West movement to significantly tighten Asia’s oversupplied jet fuel market. Kpler’s senior analyst Zameer Yusof emphasized that Asia remains structurally long in jet fuel and kerosene, with a surplus estimated at 625,000 barrels per day for June and July. Therefore, even sizeable flows to Europe do little to meaningfully reduce the regional glut.

Further compounding the oversupply picture, China exported 1.92 million tons of jet fuel in May, marking a 20% increase compared to the same period last year. Yusof also highlighted that China appears poised to maintain a monthly jet/kero export pace exceeding 2 million tons, which will likely weigh on any bullish sentiment in the Asian market.

The spike in jet fuel exports from Northeast Asia to Europe reflects opportunistic market behavior rather than a long-term reconfiguration of trade flows. Although profitable in the short run due to favorable margins and low freight rates, these shipments will not fundamentally alter the supply imbalance in Asia. With China maintaining high export volumes and domestic demand in Asia still subdued, any sustained price recovery will depend on broader structural adjustments in refining output or a stronger rebound in regional air travel.

Source: Reuters

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Economic

Impasse in Global Trade Talks Ahead of US Tariff Deadline

As the United States edges closer to implementing a new round of retaliatory tariffs, global trade negotiations remain largely stagnant. Despite efforts from key partners, only the United Kingdom has reached a formal trade agreement with Washington. Talks with the European Union (EU), Japan, South Korea, ASEAN countries, and India continue without substantial breakthroughs.

President Donald Trump’s administration has confirmed it will not extend the tariff suspension period. If no deal is reached before the looming July 9 deadline, the tariffs will take effect, potentially reshaping global trade dynamics.

European Union: Weighing an Uneven Compromise

The EU is considering an “asymmetric” trade arrangement with the US. According to Bloomberg, this would involve a flat 10% tariff on various EU exports, though the EU is pushing for reduced rates on key sectors like pharmaceuticals, alcohol, semiconductors, and commercial aircraft. Brussels also seeks exemptions or quotas to mitigate the 25% US tariffs on automobiles and parts and the 50% duty on steel and aluminum.

The European Commission has outlined four potential outcomes: an acceptable asymmetric agreement, a non-viable proposal, a delayed deadline, or unilateral US action. On July 1, EU Trade Commissioner Maros Sefcovic met with US counterparts in Washington and acknowledged receiving draft proposals from the US side—seen as a positive shift from prior exchanges of viewpoints to concrete drafting.

However, structural challenges remain. According to Cui Hongjian of the China Institute of International Studies, automobile industry competition is the major hurdle. The EU is offering concessions, such as increased investment and purchases of US goods, but Washington has yet to reciprocate meaningfully.

Japan and South Korea: Auto Tariffs at the Center of Tensions

For Japan, trade negotiations are locked in a stalemate over auto tariffs. President Trump has labeled Japanese auto trade as unfair and continues to signal intent to impose a 25% duty on car imports. Despite seven negotiation rounds, the US has not backed down, even as Japan offers to enhance cooperation in critical sectors like semiconductors, rare earths, and shipbuilding.

Japanese negotiators appear willing to accept most US conditions if the car tariff is lowered to 2.5% or eliminated altogether. However, the US insists on reciprocal access to Japan’s auto market, maintaining its hardline position.

South Korea faces similar pressure. As a major exporter of vehicles, semiconductors, and batteries, Korea's economy could suffer significant damage if the 25% US tariffs are enacted. President Lee Jae-myung’s administration has urged caution, seeking alignment with other partners before finalizing any agreement.

Zhan Debin of the Shanghai University of International Business and Economics argues that Seoul is deliberately delaying talks to observe outcomes from the US negotiations with Japan and the EU. With the Korean cabinet still incomplete, Seoul may use this transition period to request an extension from Washington.

South Korea’s ultimate goal is to return to the original KORUS free trade agreement framework, maintaining zero tariffs. However, Washington is expected to push for a broader negotiation package that may include defense cost-sharing arrangements.

ASEAN: Strategic Caution and Regional Solidarity

Countries such as Vietnam, Indonesia, Thailand, the Philippines, and Malaysia have expressed willingness to negotiate with the US to avoid higher tariffs. However, they are cautious about being drawn into strategic competition between the US and China.

Ge Hongliang of the Guangxi University’s ASEAN College notes that Washington has increasingly pressured Southeast Asian nations on supply chain security. Despite openness to talks, ASEAN is coalescing around the view that reciprocal tariffs undermine the global trade order.

ASEAN countries are unlikely to lead negotiations and are expected to adopt a wait-and-see approach. Internally, the bloc is working to maintain a unified front to prevent any member from making side deals that could jeopardize collective interests.

India: A Potential Breakthrough on the Horizon

Unlike other regions, India appears closer to striking a deal. On July 1, President Trump expressed optimism about reaching a “very large” agreement with New Delhi. US Treasury Secretary Scott Bessent recently stated that both sides are nearing an accord that would lower tariffs on US goods and avoid India’s proposed 26% tariff from April.

If finalized, this deal could enhance US access to the South Asian market and help India secure more favorable trade conditions. It also reflects India’s growing strategic importance in US trade and geopolitical calculations.

Uncertainty Mounts as Deadline Approaches

As the July 9 deadline looms, the lack of progress in trade negotiations signals a high likelihood of new tariffs taking effect. The rigidity of Washington’s demands, particularly in sectors like autos, limits room for compromise. Meanwhile, key partners remain divided between strategic caution and economic urgency.

Whether through delayed agreements or unilateral US action, the coming days will likely shape the next phase of global trade policy and signal how much flexibility the current US administration is willing to offer in a volatile and increasingly fragmented global economic landscape.

Source: Global Times

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Economic

Cryptocurrency

Federal Reserve Chair Projects Higher Inflation for Summer

Powell's statements suggest potential adjustments in monetary policy, impacting the U.S. economy and beyond.

Jerome Powell communicated expectations of higher inflation readings this summer due to economic conditions. He emphasized the continuous monitoring of inflation and reiterated the Federal Reserve's focus on a data-driven approach for future policy decisions.

"Inflation is behaving pretty much exactly as we have expected and hoped that it would... the expectation of 'higher readings' this summer." - Jerome Powell, Chair, Federal Reserve

Powell has led efforts since 2018 to steer U.S. economic policy during challenging periods. His remarks at the ECB panel highlighted anticipated inflation effects and interest rates remaining on hold amidst uncertainties caused by new trade tariffs.

Powell's outlook may influence BTC, ETH, and major digital assets, which have historically been sensitive to U.S. macro signals. Crypto markets and DeFi protocols could see shifts in trading volumes and price volatility depending on inflation and rate decisions.

Past episodes of delayed rate cuts after Fed signaling led to volatility in cryptocurrencies. Analysts predict possible capital flow rotations and temporary yield increases in DeFi following this news, potentially affecting tokens like AAVE and MKR.

The Fed continues to prioritize its dual mandate of maximum employment and stable prices. Powell's comments suggest no immediate new regulatory measures for the crypto sector but underscore the important data dependence in policy deliberations. Past instances have seen macro signals leading to shifts in crypto liquidity and asset reallocation, affecting various sectors within the ecosystem.