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Details of a trade pact between the US and EU have been released, with a joint statement issued today saying that tariffs on European cars could be cut within weeks, with the potential for reductions on other goods, too.

After a preliminary deal announced a month ago, the statement lists specific benchmarks for the EU to get sector-specific discounts on cars, drugs and semiconductors. It also details new commitments to cooperate on standards for food, as well as economic security and digital trade.

The tariff drop on cars from the current 27.5% to 15% is hotly anticipated, particularly by Germany which last year exported $34.9 billion of new cars and auto parts to the US. Other European goods will qualify for “most-favored nation,” or MFN, tariff rates, like aircrafts and aircraft parts, generic pharmaceuticals and their ingredients and some natural resources. However, the EU has not got that treatment for wines, spirits and medical devices — although the statement adds that more carve outs could be added in the future.

The EU intends to give preferential treatment to some American goods in return, including a range of seafood and other agricultural goods like tree nuts, some dairy products, fruit and vegetables, among other things. It has made other major promises, too, including to either invest $600 billion in the US — or buy $750 billion’s worth of US energy resources in the period to 2028.

The EU is also planning to dramatically increase the purchase of defense equipment from the US — including at least $40 billion in AI chips.

Despite the lower tariff rates, the new trade regime has received criticism in Europe, with some describing it as “tantamount to surrender,” while others say it will be “decades” before trade recovers.

Security guarantees for Ukraine as part of a US-led push to end Russia’s war are meeting difficulties almost immediately after US President Donald Trump met Russian President Vladimir Putin in Alaska last week. Officials from the US, Ukraine and Europe have started hashing out proposals for a post-war plan to protect Ukraine, after the White House said Putin was open to “Article 5-style” security measures for Kyiv, referring to NATO’s collective defense commitment.

Eurozone business activity hit a 15-month high for growth, despite a higher tariffs deal for exports to the US. The Composite Purchasing Managers’ Index by S&P Global rose to 51.1 in August from 50.9 in July – where anything above 50 shows expansion, and below is contraction. This beat forecasts of 50.6. But there was nuance: services weakened a little as expected, while manufacturing jumped to 50.5, its first expansion in over three years. These numbers – plus inflation hovering around target – will support the argument that there’s no rush for the European Central Bank to lower interest rates further.

Taps are running dry in Bulgaria as drier weather and aging infrastructure are leaving roughly 8% of the population often without water from June to September each year. As well as making washing, flushing toilets and cleaning difficult – the lack of water is also affecting key agricultural exports of sunflowers and corn as irrigation is curbed. Without “cardinal change” Bulgaria’s entire water system will collapse, according to Emil Gachev, head of the Waters department at the Climate, Atmosphere and Waters Research Institute in Sofia. The issues could be a warning for what’s to come across Europe, as water networks age and climate change affects weather.

Volkswagen electric vehicles are outselling Teslas in Europe a decade after the exposing of the “dieselgate” scandal. In 2015 it emerged that the carmaker was outfitting millions of cars with software to cheat tailpipe emissions tests, leading to €32 billion of fines, legal fees and recall costs. In the aftermath, VW pivoted aggressively to EVs in a bid to repair its green reputation, and in March 2021 the company said it aimed to outsell Tesla globally by 2025. Improved quality, plus Elon Musk’s controversial political interventions, have put VW on track to be Europe’s top EV maker this year.

The Iberian blackout in April, which cut power to the whole of Spain and Portugal for nearly a day and became the worst in modern European history, could have been avoided by investing in machines to improve grid resilience. Zero-carbon grid solutions company Statkraft is being paid by the UK to run so-called synchronous compensators, which run at a fixed speed and balance demand with the up-and-down supply from renewable sources. Around once a fortnight, the Liverpool grid experiences major faults like the one Spain suffered – but the machines react in less than a second to absorb excess power or inject some into the grid if there is too little, meaning there are no blackouts. The UK is building four more around the country – but continental Spain doesn’t have any at all.

London Tube strikes are planned for seven days next month, as the RMT union looks for more pay and better conditions. The walk outs are scheduled to start on Sept. 5, with different grades taking industrial action at differing times after management “refused to engage seriously with union demands,” according to the RMT. There is a separate strike planned by workers on the Docklands Light Railway, an overground part of the Transport for London network in east London, in the week starting Sept. 7 over a different pay and conditions strike.

South Africa is set to open a new underground gold mine, the first in 15 years. The Australia-listed West Wits Mining plans to start production next year at Qala Shallows on the western fringe of Johannesburg. It will mine ore during the three-year construction period to make the most of sky-high bullion prices at present. The company aims to produce around 70,000 ounces a year – a modest amount, but nonetheless a bright spot in the country’s dwindling gold sector. South Africa was once the world’s top producer of gold, but production has dropped by over 70% over the past 20 years.

Source: Bloomberg Europe

Oil trade for ceasefire

Not provoking China

Source: cnbc

The number of homes sold in the U.S. didn’t dip like analysts said it would. July home sales clocked a 2% increase from June, bringing the total to 4.01 million units on a seasonally adjusted annual rate, according to data released by the National Association of Realtors on Thursday.

These sales reflect deals that were likely agreed to in May and June, when mortgage rates were in a temporary slide. During that period, the 30-year fixed mortgage rate briefly crossed 7% in May, then ended June at 6.67%, based on data from Mortgage News Daily.

That dip in borrowing costs likely helped lock in buyers who had been sitting on the sidelines.

Inventory climbs, but affordable homes remain out of reach

The number of homes available for sale surged to 1.55 million by the end of July, marking a 15.7% increase compared to the same time last year. That puts current inventory at its highest level since May 2020, though it’s still well below what was seen before the Covid years.

At the current pace of sales, this stock represents a 4.6-month supply, which remains short of the six-month benchmark considered healthy for a balanced market.

More homes on the market didn’t lead to cheaper deals for buyers. The median price of homes sold in July was $422,400, up 0.2% from the same month last year and the highest July price on record. That said, the pace of price growth is slowing.

Lawrence Yun, chief economist at NAR, pointed out that “the ever-so-slight improvement in housing affordability is inching up home sales.” He also noted that wage growth is now outpacing home price growth, which gives buyers some breathing room, although not much.

Yun also said condo sales increased in the South, where prices have been falling over the past year. But that regional drop isn’t helping most buyers nationally. Sales remain strongest at the high end of the market.

Homes priced above $1 million saw a 7.1% year-over-year increase in sales. On the other hand, deals for homes between $100,000 and $250,000 dipped by 0.1%, and homes below $100,000 dropped sharply by 8%.

Investors return while first-time buyers back away

Homes aren’t flying off the shelves like they used to. In July, it took an average of 28 days to sell a property, up from 24 days a year ago.

Meanwhile, first-time buyers made up just 28% of sales, down from 30% in June and 29% in July 2024. That drop is yet another sign that rising borrowing costs are pushing out entry-level buyers.

Investors, however, are stepping in. They accounted for 20% of all sales in July, compared to 13% during the same period last year. This increase might be linked to the growing supply of listings, which can create opportunities for cash-rich buyers looking for deals.

Yun called attention to the 31% share of cash transactions, up from 27% last year, calling the level “unusually high” and noting that stock market gains or existing housing wealth could be behind the shift.

Even with more listings, most Americans still can’t afford to buy. A report from Realtor.com in August said only 28% of homes on the market are priced within reach of the average household. The maximum affordable price for a typical household has dropped to $298,000, down from $325,000 in 2019.

Despite a 15.7% increase in median income since then, buying power has dropped by about $30,000. Danielle Hale, chief economist at Realtor.com, said, “Even as incomes grow, higher interest rates have eroded the real-world purchasing power of the typical American household.”

That affordability crisis is taking a serious toll. A new study from Harvard’s Joint Center for Housing Studies said that the combined pressure from rising prices and high rates has driven homebuying activity to its lowest level since the mid-1990s.

Source: CryptoSlate

Swiss gold exports to the US surged last month to the highest since March, underscoring the trade imbalance that prompted President Donald Trump to slap a 39% tariff on imports from the country.Shipments of bullion from Switzerland, the world’s biggest gold-refining hub, to America jumped to almost 51 tons in July, from less than 0.3 tons the previous month. This year’s peak was recorded in January, when 193 tons of Swiss gold was shipped to the US.

Record bullion exports worth more than $36 billion made up more than two-thirds of the small European nation’s trade surplus with the US in the first quarter, even though Swiss refiners capture only a little portion of the value of the commerce. Billions of dollars worth of gold is constantly flowing across its borders, from mines in South America and Africa to banks in London and New York.

The impact of the gold industry on Switzerland’s trade balance is more important than ever as the Trump administration focuses on leveling deficits. The US president’s decision to impose tariffs of 39% on Swiss imports has caused a shock in the country, with the government having previously been confident it would avoid heavy duties.

Large-scale exports to the US earlier this year came largely in response to a potentially lucrative trans-Atlantic arbitrage window caused by concerns the precious metal could get caught up in sweeping import duties. Switzerland’s gold refiners became a crucial node in the opportunity, as European traders delivering bullion to New York needed their metal recast from the 400-ounce bars standard in London — the largest gold trading venue — into the 1 kilo or 100oz bars required by the US-based Comex exchange.

That flow reversed in the second quarter after bullion was exempted from Trump’s tariffs, leading US prices to fall back in line with the benchmark spot price in London. Earlier this month, a federal ruling that gold bars will be subject to tariffs caused chaos in global bullion markets, before Trump weighed in to say the precious metal would not face a US levy.

The Swiss National Bank addressed the issue earlier this year in a paper, arguing that outsized gold exports to the US shouldn’t be included when analyzing the trade relationship between the two economies.

Source: Bloomberg Europe

Oil fluctuated as investors weighed an increasingly bearish supply outlook against slowing progress in peace talks over the war in Ukraine.

West Texas Intermediate for October delivery edged higher to around $63 a barrel, though still hovered near two-month lows as Wednesday’s expiry of the previous contract added volatility to the low-volume trading. For the past 10 sessions, US oil futures have been locked in a tight range between about $62 and $65 a barrel.

Investors have continued to parse a mixed US crude stockpile report that included the biggest overall decline since mid-June but a seventh straight weekly buildup at the storage hub of Cushing, Oklahoma. The delivery point for West Texas Intermediate futures has seen a recent surge in supplies from the Permian Basin.

Investors are also watching the progress toward a Russia-Ukraine ceasefire following a series of high-level talks brokered by President Donald Trump. The US has worked to set up a meeting between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy, though the Kremlin so far has proved noncommittal and no date or location for the summit has been set. Any peace deal may lead to fewer restrictions on Russia’s crude exports, although Moscow has largely kept its oil flowing despite an array of sanctions.

Oil has dropped more than 10% this year on concerns that US tariffs will hurt economic growth just as OPEC+ nations are returning idled production, raising expectations for a glut once peak summer demand ends.

US gasoline stockpiles also declined for a fifth straight week, offering a reminder that, while many traders expect a surplus later this year, global inventories are still abnormally low. Jet fuel demand remains strong.

“The market continues to weigh a mix of bullish and bearish drivers that, which together with thin summer liquidity, are keeping prices boxed in,” said Ole Hansen, head of commodity strategy at Saxo Bank.

Source: Yahoo Finance

Source: Bloomberg