German Exporters Don't Want US Trade Deal 'at Any Price', Says Trade Group

Economic

Forex

Summary:

German exporters do not want a deal at any price in the trade conflict with the United States, said Dirk Jandura, head of the BGA trade lobby.

"Our interests must be reflected in an agreement with the U.S.," Jandura said on Thursday in Berlin. "We need a fair deal for the whole of Europe. It must not be concluded at any price."

The European Commission aims to reach a trade agreement outline with the U.S. in the coming days, ahead of the August 1 deadline set by President Donald Trump for broad tariff increases.

Jandura, President of the Federation of German Wholesale, Foreign Trade and Services (BGA), called for a stronger European single market to improve the EU's negotiating position and to cushion the economic impact of tariffs, alongside new trade agreements or the revision of existing ones.

The U.S. was Germany's biggest trading partner in 2024 with two-way goods trade totalling 253 billion euros ($296.77 billion).

Exports to the United States dropped 7.7% in May month on month, following a 10.5% decline in April, data showed on Tuesday.

"The situation in foreign trade is dramatic and threatens to get worse," said Jandura. "The consequences of Trump's tariff policy are thus becoming ever clearer."

Source: Yahoo Finance

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Gerik

Economic

Vietnam Responds to US Pressure with Regulatory Overhaul

In the wake of a preliminary tariff agreement with the United States, Vietnam is preparing to enforce stricter trade compliance measures aimed at curbing illegal transshipment practices. A draft decree seen by Reuters outlines plans for increased penalties and inspection protocols, primarily targeting Chinese-origin goods suspected of bypassing US tariffs by re-entering global supply chains through Vietnam.

This initiative is a direct outcome of recent negotiations between President Donald Trump and Vietnamese leader To Lam, resulting in a deal that reduces the threatened 46% US tariff on Vietnamese imports to 20%. However, goods found to be illegally transshipped through Vietnam will still face a punitive 40% levy, signaling that enforcement not just diplomacy will determine the agreement’s long-term success.

Causal Relationship Between Trade Surges and Transshipment Concerns

The US has repeatedly accused Vietnam of being a transshipment hub for Chinese goods attempting to avoid high US tariffs. These accusations are supported by trade data showing a near-synchronous surge in both Vietnamese exports to the US and Vietnamese imports from China since the start of the US-China trade war in 2018. By 2024, Vietnam’s exports and imports in this bilateral triangle both stood at approximately $140 billion.

The correlation suggests that a significant share of Vietnam’s rising export volume may be composed of goods that underwent minimal transformation, raising questions about their compliance with rules of origin standards. Washington’s demand for clearer thresholds on value-added requirements reflects a push for Vietnam to decrease its reliance on Chinese components, especially in sectors such as electronics and machinery.

Focus of Enforcement: Origin Fraud and Counterfeit Goods

Vietnam’s new measures aim to address widespread concerns surrounding fraudulent certificates of origin and counterfeit imports. The July 3 trade ministry document lists key product categories under heightened scrutiny, including plywood, wooden furniture, steel parts, headphones, batteries, and bicycles. These goods have been flagged as high-risk due to their prior involvement in trade defense cases by the US and EU.

Vietnamese authorities have already intensified inspections on US-bound exports and are preparing to regulate self-certification practices more strictly. Future updates to the draft decree are expected to include financial penalties and legal sanctions. The draft also outlines plans for more frequent on-site inspections and a revision of the certificate-of-origin issuing process to deter fraud.

Legal Ambiguities and the Path to a Final Deal

Despite the outlined enforcement intentions, significant legal ambiguities remain. The US has yet to define how it will determine illegal transshipment and how much domestic value addition is required to classify goods as legitimately Vietnamese. These details are crucial, as they will shape compliance expectations and enforcement frameworks on both sides of the deal.

Sources familiar with the ongoing discussions indicate that Washington is pushing for Vietnam to localize more production processes and reduce dependency on upstream Chinese inputs. However, without clear value thresholds or finalized timelines, both businesses and regulators are navigating uncertain terrain.

Vietnam’s Strategic Trade Balancing Act

Vietnam’s actions illustrate a strategic attempt to preserve trade ties with the US, its largest export market, while carefully managing its industrial dependence on China. This balancing act reflects a broader regional challenge: how to navigate great power rivalries while maintaining export-led economic growth.

By committing to stronger enforcement, Vietnam seeks to demonstrate alignment with US trade priorities without severing its deeply integrated supply chains with China. Whether these measures will satisfy US regulators or disrupt trade flows remains to be seen, but they mark a clear shift in Vietnam’s trade governance in the face of mounting geopolitical and economic pressure.

Vietnam’s pending crackdown on trade fraud is not merely regulatory housekeeping it is a political and economic response to the evolving demands of its largest trading partner. As the final terms of the tariff deal remain under negotiation, the success of these reforms will depend on both legal clarity and Vietnam’s capacity to enforce new standards without destabilizing its export-driven economy.

Source: Reuters

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Blue River

Stocks

Technical Analysis

FundamentalOverview

The S&P 500 continuesto be supported given the lack of bearish drivers. We haven’t got anymeaningful catalyst since the NFP report other than Trump’s tariff letters thatwere largely ignored by the market given that everyone expects them to be justthe usual negotiating tactic.

Next week, we have the USCPI report and that could trigger some big moves in the market. To keep thetrend going, we would likely need soft inflation figures as a hot report mighttrigger a deeper pullback given the positioning.

In the bigger picturethough, given that the Fed's reaction function remains to either wait more orcut, the market should eventually get back to its upward trend.

S&P 500Technical Analysis – Daily Timeframe

S&P 500 Daily

On the daily chart, we cansee that the S&P 500 is consolidating around the all-time highs after avery strong rally. From a risk management perspective, the buyers will have abetter risk to reward setup around the previous all-time high at 6,160-ishlevel to position for the continuation of the uptrend. The sellers, on theother hand, will want to see the price breaking lower to pile in for a dropinto the 6,000 level next.

S&P 500 TechnicalAnalysis – 4 hour Timeframe

S&P 500 4 hour

On the 4 hour chart, we cansee that we have an upward trendline defining the uptrend. If we were toget a pullback all the way into the trendline, we can expect the dip-buyers tolean on it to position for a rally into new all-time highs with a better riskto reward setup. The sellers, on the other hand, will look for a break lower toincrease the bearish bets into the 5,800 level next.

S&P 500 TechnicalAnalysis – 1 hour Timeframe

S&P 500 1 hour

On the 1 hour chart, we cansee that we have a minor resistance around the 6,315 level. The sellers willlikely continue to step in around the resistance with a defined risk above itto keep targeting a pullback into the 6,160 level. The buyers, on the otherhand, will look for a break higher to increase the bullish bets into newall-time highs.

There’s also a minor upwardtrendline that can offer support for the dip-buyers, while the sellers willlikely increase the bearish bets into new lows on a breakout. The red linesdefine the average daily range for today.

Source: ForexLive

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Gerik

Economic

Industry Opposition to Deregulatory Shift

A coalition of European telecom operators has formally expressed concern over the European Commission’s recent proposal to ease regulation on fixed network infrastructure. In an open letter released on July 10, 2025, firms including Vodafone, Iliad, and 1&1 argued that the plan risks re-establishing monopolies by giving dominant national operators such as Deutsche Telekom in Germany unfair advantages. The proposal, they claim, undermines the EU’s longstanding competition principles and could severely constrain the growth of Europe’s fiber optic infrastructure.

This resistance is rooted in the historical context of telecommunications in Europe, where former state-owned monopolies still control much of the essential network infrastructure. Under the current regulatory framework, these incumbents are obligated to provide access to competitors under regulated terms. The new plan would loosen these obligations, potentially eroding the competitive environment that smaller players depend on.

Causal Risks to Fiber Optic Rollout and Market Balance

The operators' criticism highlights a causal link between deregulation and reduced infrastructure access. If market leaders are no longer required to open their networks under fixed, transparent conditions, smaller telecom companies could find themselves locked out or forced to pay prohibitive access fees. This would not only reduce their competitiveness but also lead to underinvestment in rural or less profitable regions, where larger firms may not prioritize expansion.

The letter frames this proposed policy change as a “step backwards,” suggesting that the relaxation of rules could lead to a form of structural re-monopolization. Rather than accelerating broadband rollout, as the EU may have intended, the policy could paradoxically stifle it by reducing competitive incentives for innovation and territorial expansion.

Germany’s Policy Context and Broader Implications

The timing of the letter is particularly significant, as it follows Germany's Bundestag decision earlier this month to pass legislation aimed at accelerating both fiber optic and mobile network growth. While the German law emphasizes speed and efficiency, the broader EU regulatory shift seems to threaten the competitive checks that made such expansion possible in the first place.

The operators’ pushback underscores that regulatory flexibility should not come at the expense of equitable access. Without safeguards to prevent dominant firms from using their infrastructure advantages to block competitors, the overall quality, reach, and affordability of internet services across Europe could decline.

As the EU considers loosening fixed network regulations, strong opposition from firms like Vodafone and Iliad signals deep industry concern over the potential re-emergence of monopolistic control. The current regulatory framework has fostered diversity and innovation by ensuring infrastructure access, particularly in the competitive broadband space. Weakening this model may offer short-term administrative relief but poses long-term threats to competition, consumer choice, and infrastructure development across the continent. The European Commission now faces a pivotal decision: whether to prioritize liberalization or uphold the regulatory foundations that have shaped Europe’s digital landscape.

Source: Reuters

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Daniel Carter

Political

Russia-Ukraine Conflict

Escalating Russian attacks have strained Ukrainian air defences at a perilous moment in the war and forced thousands of people to seek bomb shelters overnight.

"Residential buildings, vehicles, warehouse facilities, office and non-residential buildings are on fire," head of Kyiv's military administration, Tymur Tkachenko, said on the Telegram messaging app.

Russia launched 18 missiles and around 400 drones in an attack which primarily targeted the capital Kyiv, according to Ukrainian President Volodymyr Zelenskiy.

There was no comment from Moscow about the attack, which came a day after Russia launched a single-night record number of drones targeting its smaller neighbour in what Ukrainians describe as terror tactics.

"Approaches to warfare changed a long time ago, and in its quest to break our society through terror, Russia has opted for combined strikes," the head of Ukrainian presidential office Andriy Yermak said.

Russia says its attacks aim to degrade Ukraine's military. The Russian defence ministry said its own air defence units had destroyed 14 Ukrainian drones overnight, RIA state news agency reported.

After U.S. President Donald Trump pledged earlier this week to send more defensive weapons to Kyiv, Washington was already delivering artillery shells and mobile rocket artillery missiles to Ukraine, two U.S. officials told Reuters on Wednesday.

Zelenskiy held a "substantive" meeting on Wednesday with Trump's Ukraine envoy, Keith Kellogg, in Rome ahead of a Ukrainian recovery conference.

On Thursday, he will hold more meetings with American officials to discuss the adoption of the next package of U.S. sanctions against Russia in the near future, according to the Ukrainian foreign minister.

Trump has been growing increasingly frustrated with President Vladimir Putin, saying that the Russian leader was throwing a lot of "bullshit" at the U.S. efforts to end the war that Moscow launched against Ukraine in February 2022.

U.S. Secretary of State Marco Rubio will meet with Russian Foreign Minister Sergei Lavrov on the sidelines of the ASEAN foreign ministers' meeting in Kuala Lumpur on Thursday, the U.S. State Department and Russia's foreign ministry said.

The Russian attack on Kyiv on Thursday rattled the city with explosions, Reuters' witnesses said. Videos showed windows blown out, devastated facades and cars burned down. Ukrainian officials said that damage was reported in eight of the city's 10 districts.

"I turned around and saw that the apartment was gone, and a fire had also broken out," said Karyna Volf, a 25-year-old Kyiv resident who rushed out of her place moments before shards of glass went flying.

"This is terror, because it happens every night when people are asleep."

Thick smoke covered parts of Kyiv, darkening the red hues of a sunrise over the city of three million, Reuters' witnesses reported. Air raids in the capital lasted more than four hours, according to Ukraine's air force data.

Closer to the battle zone, a Russian air strike killed three people and injured one late on Wednesday in the front-line town of Kostiantynivka in Ukraine's east, the national emergency services said.

Source: Reuters

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Glendon

Economic

President Donald Trump’s latest extension of tariff negotiations once again stretches out the policy limbo that US businesses are being forced to endure. In a flurry of letters this week, Trump effectively kicked the can on his much-hyped July 9 “reciprocal tariff” deadline until Aug. 1. In other words, Trump wants nations to come forward with concessions by that date. Meanwhile, American businesses and consumers are already juggling current levies that are up some 11 percentage points to around 13% on average.

Who will pay the price for Trump’s destructive policy and this persistent uncertainty? Odds are decent that the titans of the US stock market will adapt, but the nation’s small businesses could suffer lasting damage.

Small businesses, which collectively employ about half of America’s private workforce, account for about a third of the value of goods imported into the US. They include many wholesalers, some manufacturers and companies operating in a variety of other industries. (Here I define small businesses as those with fewer than 500 workers, but this group includes very small companies too, such as the 94,000 importers with just 1-19 employees.)

Unlike the publicly traded giants who can often secure a private audience at Mar-a-Lago or at least have officials lobby on their behalf, small businesses have neither the policy influence, the negotiating leverage with suppliers, nor the fat profit margins to weather large cost increases and haphazard policy implementation. So while tariffs and trade uncertainty haven’t held back the S&P 500 Index or had an obvious impact (yet) on the consumer price index, one plausible thesis is that small businesses will take the brunt of the blow.

Some of the more sobering evidence comes from surveys. Around 44% of small and medium-sized businesses say their revenues are taking a hit, according to the latest wave of a study from Alignable and researchers at the Massachusetts Institute of Technology and Harvard Business School. The National Federation of Independent Business’ monthly survey, whose small-business respondents always seem to perk up when a Republican is in office, has seen optimism swoon in 2025 (though it’s still up a lot from before Trump’s election win). Just a net 7% expect higher real sales volumes, versus 22% in December, while a net 32% plan to increase prices, the most since March 2024.

Admittedly, survey interpretation can be tricky in our age of partisan politics and social media silos, and other data seem to paint a picture of a small business ecosystem that’s hanging in there for now, but clearly not firing on all cylinders.

The Paychex Small Business Employment Watch jobs index — which focuses on businesses with under 50 workers — slipped slightly to 99.65 in June, the lowest since 2021, with values under 100 signaling that jobs are being shed. That index was consistent with similar data from the ADP National Employment Report, which showed that those under-50-employee businesses shed 47,000 jobs in June, the most since March 2022, even as larger firms continued to grow. Small business employment has mostly been treading water for a few years now, and the risk is that the tariff upheaval will turn a tenuous yet stable situation into a downright bad one with layoffs and business closures.

For now, earnings are still in decent shape. Using proprietary internal bank data, Bank of America Institute researchers use the account inflow-to-outflow ratio as a proxy for small-business profitability, and they found that the ratio has been above 1 for most of 2025. However, the study also noted that in the subset of companies that themselves pay tariffs directly to Customs and Border Protection, those payments have soared.

Like it or not, Trump appears to view all the uncertainty — the rolling deadlines, constantly changing tariff rates and blustery social media posts — as part of his negotiating strategy. Investors on Wall Street seem to be assuming, at this point, that the ultimate tariffs probably won’t be quite as bad as his threats (i.e., on the final accounting, they may “only” be as bad as the 1930s, rather than the 1890s). In the near-term, levies will probably go up as product-level investigations are completed and deadlines pass, but no one should be taking the bluster at face value, appears to be the calculus. And many of the levies are so intrinsically temporary that — worst comes to worst — they’ll never outlast the Trump administration itself, if they even make it past the 2026 midterm election.

But that’s cold comfort to small business owners, who oftentimes find themselves operating with no more than one month’s cash buffer held in reserve. To them, the existing tariffs and the months of uncertainty are a near-and-present danger, and Trump is playing with fire each time he draws it all out for another month.

Source: Bloomberg Europe

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Gerik

Economic

Auction Metrics Suggest Stability, But Caution Persists

The 20-year Japanese government bond (JGB) auction held on July 10, 2025, delivered a muted but stable result. The bid-to-cover ratio stood at 3.15 below the annual average, yet the highest since March while the auction’s tail narrowed to 0.18, marking its tightest level since January. These figures suggest that demand, while not robust, showed signs of resilience. Yields remained steady at 2.51%, following a 2.5 basis point decline prior to the auction, and bond futures ticked higher, reflecting modest confidence.

The Ministry of Finance has subtly reduced the issuance of long-duration bonds in recent months, aiming to temper volatility in the super-long end of the curve. This reduction in supply, coupled with more attractive yield levels and temporary yield curve stabilization, made conditions more palatable for buyers. However, investors remain on alert, especially with Japan's Upper House election scheduled for July 20, where pledges for fiscal stimulus or tax cuts could significantly alter debt dynamics.

Investor Sentiment Anchored by Election Risks and Policy Direction

Though the auction's outcome did not raise immediate alarm, underlying unease among bond investors remains rooted in the nation’s ballooning debt and shifting political landscape. The causal concern lies in the prospect of post-election fiscal expansion, which could prompt higher bond issuance and upward pressure on yields. This sentiment was echoed by Meiji Yasuda Life Insurance Co., which publicly stated its intention to refrain from increasing exposure to super-long JGBs over the next two years due to the risk of rising interest rates and supply increases.

This apprehension comes at a moment when the Bank of Japan historically the largest JGB holder is gradually stepping back from aggressive bond purchases. The anticipated reduction in central bank support introduces a structural shift in the bond market’s demand side, leaving longer-dated maturities more vulnerable to external sentiment and political developments.

Foreign Influences and Comparative Pressure from Global Markets

Japan’s bond market tension is not occurring in isolation. Sovereign yields globally have been trending higher, with the US 30-year Treasury yield approaching the 5% mark earlier this week. Fiscal sustainability fears mirrored in the US after a 10-year auction revealed strong demand are increasingly defining yield curve movements. While Japanese yields remain low by comparison, the international context reinforces domestic caution. Any perception that Japan may follow a path of expansive fiscal policy could push investors to reprice long-term risk more aggressively.

Moreover, the upcoming election coincides with fresh 25% US tariffs set for August 1, imposed by President Donald Trump. The dual impact of trade uncertainty and fiscal stimulus risks places added strain on investor outlooks. US Treasury Secretary Scott Bessent’s remarks about “domestic constraints” tied to the Japanese vote underscore the broader geopolitical implications of the current fiscal stance.

Auction Participants Indicate Support, But Not Full Conviction

A partial breakdown of winning bidders reveals Nomura Securities Co. securing over 16% of the bonds, followed by Mitsubishi UFJ Morgan Stanley Securities Co. with just above 11%. These large allocations suggest that domestic institutions, particularly those aligned with long-term liability structures, continue to provide foundational support for JGBs. However, the absence of broader participation from foreign investors and cautious tones from major insurers temper the overall optimism.

Market strategist Ken Matsumoto from Crédit Agricole assessed the situation as contained for now, suggesting that 30-year yields around 3% remain within a justifiable range, though a move toward 4% appears unlikely in the near term. Still, this assessment hinges on the assumption that post-election policies will not introduce unexpected fiscal shocks a condition far from guaranteed.

Japan’s latest 20-year bond auction delivered a surface-level stability that belies deeper structural and political uncertainties. With a pivotal election just days away, and fiscal promises likely to define future debt trajectories, investors remain in a holding pattern. While auction metrics signal momentary calm, the market’s longer-term stability depends on both the evolution of Japan’s political leadership and the government’s ability to manage its debt without overburdening an already fragile demand base for super-long securities.