Portugal Sees EU, US Reaching Trade Deal With ‘Very Low’ Tariffs

Economic

Political

Summary:

Portuguese Finance Minister Joaquim Miranda Sarmento sees the European Union and the US reaching an agreement with tariffs potentially below 10% that would help keep trade flowing.

Portuguese Finance Minister Joaquim Miranda Sarmento said he sees the European Union and the US reaching an agreement with tariffs potentially below 10% that would help keep trade flowing.

“It's possible to have an agreement with very low tariffs, an agreement that could be perceived as beneficial to both parties and that could continue to allow us to trade and to increase value for our citizens,” Sarmento said in a Bloomberg Television interview in Brussels. “We expect to have an update of what the Commission was able to negotiate with the US administration,” in the EU finance ministers' meetings to be held today and on Tuesday.

Asked how low those tariffs could be, he later told Bloomberg Radio's Stephen Carroll “probably less than 10%, but let's see what's the outcome.”

The EU has until July 9 to clinch a trade arrangement with US President Donald Trump before tariffs on nearly all of the bloc's exports to the US jump to 50%. Trump has imposed tariffs on almost all its trading partners, saying he wanted to bring back domestic manufacturing, needed to pay for a tax-cut extension and stop other countries from taking advantage of the US.

“If the terms of the deal are not favorable for the EU then there is no agreement,” he said. “If an agreement is not possible on Wednesday there will mostly likely be a new deadline. If at the end of the day an agreement” is not possible, Europe should not retaliate on a full scale and should be very selective.”

Sarmento added that Portugal will support Eurogroup President Paschal Donohoe's bid for a second term heading the meetings of euro-area finance ministers. Sarmento also said the government is still evaluating whether to name a new Bank of Portugal governor or reappoint Mario Centeno, as his term heading the central bank ends this month.

Separately, the government will announce the start of the privatization process of state-owned airline TAP SA in the coming weeks, the minister said.

A plan to privatize TAP was delayed earlier this year after parliament toppled the center-right minority government in a confidence vote in March. Portugal held an early election in May that was won by the ruling coalition, which added seats in parliament while still falling short of an absolute majority.

Source: Bloomberg Europe

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Gerik

Commodity

Economic

Fresh Tariff Threat Rattles Metal Markets

President Donald Trump’s unexpected announcement of a sweeping new tariff targeting all countries aligned with the BRICS bloc has reignited volatility in global commodities markets. In a late Sunday post on Truth Social, Trump declared that a 10% tariff would be imposed on BRICS nations Brazil, Russia, India, China, and South Africa with no exceptions and in addition to existing duties. This sudden policy signal has injected new uncertainty into an already fragile global trade environment.

Following the announcement, industrial metals swiftly reversed recent gains. Copper dropped 0.7% to $9,800.50 per ton in Shanghai, marking a third consecutive decline on the London Metal Exchange after previously breaching $10,000. Aluminum also fell 0.8%, and broader declines were recorded across major base metals. Iron ore futures on the Singapore Exchange slipped 0.5% to $95.30 per ton, underscoring the widespread nature of the risk-off sentiment.

Market Sensitivity to Trade Policy Surprises

The reaction in commodity prices underscores a clear causal link between unexpected shifts in US trade rhetoric and investor sentiment across raw material markets. While industrial metals had shown resilience in recent months thanks to rising US imports, shrinking global inventories, and a weaker dollar the renewed threat of protectionism directly undermines the demand outlook.

Trump’s tariff policy threatens to disrupt trade flows with some of the world’s largest metal-producing and consuming economies. China, the world’s largest consumer of copper and aluminum, sits at the core of this risk, with Brazil and South Africa also being key resource exporters. A blanket tariff on BRICS nations, if implemented without exceptions, would not only raise transaction costs but also introduce fresh supply chain disruptions for global manufacturers.

Timing of the Policy Escalation Heightens Market Risks

The announcement comes as Trump prepares to escalate pressure on trade partners more broadly. Treasury Secretary Scott Bessent confirmed that as many as 15 countries will receive formal tariff warning letters, with new rates scheduled to take effect on August 1. While Bessent suggested there may be room for bilateral negotiation beyond the July 9 deadline, the lack of clarity has left investors and producers bracing for broader disruption.

The timing is particularly sensitive as metals markets had only recently shown signs of stabilization. Copper’s rise above $10,000 last week was fueled by surging US-bound shipments and declining stockpiles, suggesting recovering demand in the West. Trump’s tariff threat now casts doubt on that trajectory by introducing the potential for retaliatory measures and supply chain rerouting.

Risk of Retaliation and Strategic Recalibration

The BRICS bloc, while economically diverse, shares an interest in countering US trade dominance. A coordinated response to Trump’s policy could include counter-tariffs or reallocation of commodity flows toward non-Western markets. Such realignment would likely take time but would introduce structural inefficiencies and cost burdens across logistics and procurement systems. In this context, the metals market’s initial reaction reflects not only short-term pricing risk but a longer-term strategic recalibration.

Trump’s unilateral tariff threat toward BRICS nations has exposed underlying fragilities in the industrial metals market. While recent gains were supported by positive fundamentals, the sudden shift in trade policy sentiment highlights the vulnerability of globally integrated supply chains. As the August 1 tariff deadline approaches, markets will remain sensitive to any further developments or clarifications, with the potential for a deeper correction if retaliatory measures emerge or if trade flows become more restricted. The episode reinforces the market’s ongoing dependency on geopolitical stability for price momentum and supply continuity.

Source: Bloomberg

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IC Markets

DXY (US Dollar Index)

Potential Direction: Bullish

Overall momentum of the chart: Bearish

The price could potentially make a bullish continuation toward the 1st resistance.

Pivot: 96.66

Supporting reasons: Identified as a pullback support that aligns with the 161.8% Fibonacci extension, indicating a potential area where buying interest could pick up to resume the uptrend.

1st support: 95.40

Supporting reasons: Identified as a support that aligns with the 161.8% Fibonacci extension, indicating a potential area where the price could stabilize once again.

1st resistance: 97.79Supporting reasons: Identified as a pullback resistance, indicating a potential level that could cap further upward movement.

Monday 7th July 2025: Technical Outlook and Review_1

EUR/USD

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could fall toward the pivot and potentially make a bullish rise toward the 1st resistance. Additionally, the price is above the Ichimoku Cloud, which adds further significance to the strength of the bullish momentum.

Pivot: 1.1630

Supporting reasons: Identified as a pullback support, indicating a potential area where buying interest could pick up to resume the uptrend.

1st support: 1.1446Supporting reasons: Identified as an overlap support, indicating a potential area where the price could again stabilize.

1st resistance: 1.1909

Supporting reasons: Identified as an overlap resistance that aligns with the 161.8% Fibonacci extension and the 78.6% Fibonacci projection, indicating a potential area that could halt any further upward movement.

Monday 7th July 2025: Technical Outlook and Review_2

EUR/JPY

Potential Direction: Bullish

Overall momentum of the chart: Bullish

Pivot: `169.69

Supporting reasons: Identified as a pullback support, indicating a potential area where buying interest could pick up to resume the uptrend.

1st support: 167.43Supporting reasons: Identified as a pullback support, indicating a potential area where the price could again stabilize.

1st resistance: 171.98Supporting reasons: Identified as a multi-swing-high resistance and acting as a key area that could halt any further upward movement.

Monday 7th July 2025: Technical Outlook and Review_3

EUR/GBP

Potential Direction: BullishOverall momentum of the chart: Bullish

The price is falling toward the pivot and could potentially make a bullish rise toward the 1st resistance. Additionally, the price is above the Ichimoku Cloud, which adds further significance to the strength of the bullish momentum.

Pivot: 0.8563

Supporting reasons: Identified as a pullback support, indicating a potential area where buying interest could pick up to resume the uptrend.

1st support: 0.8521Supporting reasons: Identified as a pullback support, indicating a potential area where the price could stabilize once more.

1st resistance: 0.8681Supporting reasons: Identified as a swing high resistance, indicating a potential level that could cap further upward movement.

Monday 7th July 2025: Technical Outlook and Review_4

GBP/USD

Potential Direction: Bullish

Overall momentum of the chart: Bullish

Pivot: 1.3563

Supporting reasons: Identified as a pullback support that aligns closely with the 50% Fibonacci retracement, indicating a potential area where buying interest could pick up to resume the uptrend.

1st support: 1.3376Supporting reasons: Identified as an overlap support, indicating a potential area where the price could stabilize once more.

1st resistance: 1.3790Supporting reasons: Identified as a swing high resistance that aligns with a 161.8% Fibonacci extension, indicating a potential level that could cap further upward movement.

Monday 7th July 2025: Technical Outlook and Review_5

GBP/JPY

Potential Direction: BullishOverall momentum of the chart: Bullish

Pivot: 195.17

Supporting reasons: Identified as a pullback support, indicating a potential area where buying interest could pick up to resume the uptrend.

1st support: 193.09

Supporting reasons: Identified as a pullback support, indicating a potential level where the price could stabilize once more.

1st resistance: 198.44Supporting reasons: Identified as a multi-swing high resistance, acting as a key area that could halt any further upward movement.

Monday 7th July 2025: Technical Outlook and Review_6

USD/CHF

Potential Direction: Bearish

Overall momentum of the chart: Bearish

The price is rising toward the pivot and could potentially make a bearish reversal and fall toward the 1st support. Additionally, the price is below the Ichimoku Cloud, which adds further significance to the strength of the bearish momentum.

Pivot: 0.8042

Supporting reasons: Identified as a pullback resistance that aligns with the 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 0.7872Supporting reasons: Identified as a swing low support, indicating a potential level where the price could stabilize once again.

1st resistance: 0.8159Supporting reasons: Identified as a pullback resistance, indicating a potential level that could cap further upward movement.

Monday 7th July 2025: Technical Outlook and Review_7

USD/JPY

Potential Direction: Bullish

Overall momentum of the chart: Bearish

The price could fall toward the pivot and potentially make a bullish rise toward the 1st resistance.

Pivot: 142.38

Supporting reasons: Identified as a multi-swing low support, indicating a potential area where buying interest could pick up to resume the uptrend.

1st support: 139.90Supporting reasons: Identified as a swing low support, suggesting a potential area where the price could stabilize once more.

1st resistance: 146.02Supporting reasons: Identified as a pullback resistance that aligns closely with the 61.8% Fibonacci retracement, indicating a potential level that could cap further upward movement.

Monday 7th July 2025: Technical Outlook and Review_8

USD/CAD

Potential Direction: Bullish

Overall momentum of the chart: Bearish

The price has made a bullish reversal off the pivot and could potentially rise toward the 1st resistance.

Pivot: 1.3570

Supporting reasons: Identified as a swing-low support, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 1.3435

Supporting reasons: Identified as a multi-swing-low support, indicating a key level where the price could stabilize once more.

1st resistance: 1.3732

Supporting reasons: Identified as a swing-high resistance that aligns closely with a 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement. The presence of the red Ichimoku Cloud adds further significance to the strength of the downward momentum.

Monday 7th July 2025: Technical Outlook and Review_9

Source: IC Markets

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FOREX.com

Key Events to Watch

● Chinese CPI – Wednesday: Will deflationary pressures deepen?

● FOMC Minutes & USD Weakness: Possible policy clues and implications for oil demand

● U.S. Crude Inventories: Retesting 3-month highs, adding pressure to prices

As WTI trades back inside the 3-year downtrend channel established since the 2022 highs, the outlook has shifted to a neutral-to-bearish tone, with markets awaiting a decisive breakout.

Several macro and supply-side factors are reinforcing this stance, including OPEC’s planned unwind of voluntary supply cuts totaling more than 400,000 barrels per day starting in August, rising U.S. crude inventories nearing 3-month highs, and ongoing trade uncertainty tied to near-term tariff decisions.

Crude Oil Weekly Outlook: OPEC Meeting vs WTI Price Risks_1

Despite current downside pressure, several bullish factors are helping to hold prices and are worth monitoring:

● Continued U.S. dollar weakness could lend support to commodity prices.

● OPEC’s confidence in phasing out cuts suggests a more optimistic supply-demand outlook.

● Expectations for interest rate cuts and potential trade agreements may boost demand sentiment.

So what are the key levels I’m watching?

Crude Oil Weekly Outlook: Weekly Time Frame – Log Scale

Crude Oil Weekly Outlook: OPEC Meeting vs WTI Price Risks_2

As oil holds back within the 3-year down trending channel, a bearish-to-neutral stance persists in line with OPEC’s supply strategies. The latest oil drop found support above the 64-mark, aligning with the neckline of a previously formed inverted head and shoulders pattern that corresponded with the breakout above 70 during Middle East escalations. Now that we are back at that support and technical checkpoint, the scenarios are as follows:

Bearish Scenario:Should oil close below the 63.40 level, downside risks may accelerate toward the midzone of the established 3-year channel, aligning with the 60, 58, and 56 levels, respectively, before confirming projections for new 2025 lows.

Bullish Scenario: On the upside, if crude holds above the 64–66 support zone, it may recover toward the 69 and 72 resistance levels, where it is likely to challenge a fresh breakout attempt. Such a move could reshape the broader WTI outlook, either sustaining or overcoming the dominance of the long-standing down trending channel.

Source: FOREX

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Gerik

Economic

Commodity

Export Controls as Strategic Leverage in Geopolitics

China’s decision in April to curb rare earth and magnet exports, primarily in retaliation to US-imposed tariffs, served its geopolitical intent by stalling parts of the global auto supply chain and drawing US officials back into negotiations. With China supplying 90% of the world’s rare earth magnets, the move underscored its dominance in a critical material segment used across electric vehicles, defense technologies, and clean energy systems.

The export restrictions prompted a 75% drop in magnet exports within two months and forced several automakers globally to suspend production. These disruptions illustrated a direct causal relationship between Beijing’s policy intervention and the functional slowdown of the international manufacturing network. The United States subsequently reached a tentative deal with China on June 27 to resume rare earth trade, but industry insiders expect a slow implementation phase, as outlined by Baotou Rare Earth Products Exchange.

Economic Repercussions for Domestic Producers

While the move demonstrated China’s external bargaining power, the domestic cost has been severe. Magnet producers, already strained by a sluggish Chinese economy and weakening demand from the electric vehicle sector, found themselves facing an internal crisis. Export volumes had been crucial to many firms, contributing between 18% and 50% of total revenue among the top eleven listed magnet producers in 2024.

The abrupt contraction in export markets, combined with tepid domestic demand, has placed pressure on both revenue and operational continuity. Several medium-sized firms cut production by approximately 15% during April and May, while inventories began to accumulate due to the customized nature of magnets, which hinders domestic resale.

This squeeze has created a dual burden for manufacturers: they must manage rising storage and compliance costs, while simultaneously grappling with reduced revenue streams. The correlation here reveals that while the export curbs were politically intentional, their economic impact at home has been disproportionately negative and difficult to contain.

Market Signals Diverge from Business Realities

Stock prices of magnet-producing firms initially fell sharply in April following the export announcement but have since staged an unexpected rebound. Analysts such as Cory Combs at Trivium China warn that this recovery may be driven more by speculative sentiment than by any structural improvement in the sector’s prospects. Given the absence of a clear timeline for export license normalization, and the uncertain path forward in US-China trade relations, the current market optimism appears decoupled from operational fundamentals.

Moreover, the presence of numerous private firms in the rare earth magnet industry obscures a full accounting of the sector’s financial condition. Share prices of listed entities only partially reflect broader industry stress, especially among small-to-mid-size producers that lack export licenses or political influence.

Historical Parallels Suggest Prolonged Recovery Timelines

The experience with other critical minerals namely germanium and antimony suggests that even when controls are aimed at civilian industries, recovery in export flows is not guaranteed. Customs data show that antimony shipments to Europe remain far below pre-control levels, even a year after restrictions were imposed. This precedent indicates a possible lag effect, where producers may continue facing delays and compliance hurdles long after diplomatic agreements are reached.

Industry observers like Ellie Saklatvala from Argus emphasize that the burdens associated with documentation and licensing for exports have become a permanent feature of the trade process. These institutional changes reflect a structural shift in China’s export policy, with long-term implications for efficiency, trade friction, and inventory management.

Pressure May Drive Consolidation, Not Reform

The mounting operational strain could trigger a wave of industry consolidation. In a sector with hundreds of producers, particularly in regions like Inner Mongolia, financial pressure and logistical bottlenecks may force smaller players to exit or merge. Analysts like David Abraham view this as a potential outcome that Beijing may tacitly support, as it allows for tighter control and better tracking of rare earth flows.

This dynamic introduces a complex causal relationship: export controls designed for external strategic leverage inadvertently become tools for domestic industry restructuring. While short-term business losses are severe, the central government may view long-term consolidation as a policy-aligned benefit.

Strategic Gains at the Expense of Industrial Stability

China’s rare earth export curbs have yielded political leverage but at a significant cost to its own magnet manufacturing base. The dual effects geopolitical positioning and economic self-harm reveal the trade-offs embedded in strategic resource nationalism. Even as negotiations with the US offer a potential easing of restrictions, the regulatory and logistical friction introduced by the controls appears here to stay.

The episode underscores a broader transformation in how China uses its mineral dominance not merely as a passive supplier but as an active regulator of global supply chains, capable of enforcing compliance externally while reshaping industry structures at home. Whether this strategy will ultimately strengthen China’s position or undermine its industrial foundation remains contingent on how quickly and effectively domestic firms can adapt.

Source: Reuters

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FXOpen

Important Takeaways for GBP/USD and EUR/GBP Analysis Today

● The British Pound is showing bearish signs below the 1.3700 support against the US dollar.

● There is a key bearish trend line forming with resistance near 1.3650 on the hourly chart of GBP/USD at FXOpen.

● EUR/GBP is gaining pace and trading above the 0.8600 zone.

● There was a break above a contracting triangle with resistance at 0.8630 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

Market Analysis: GBP/USD Dips as EUR/GBP Accelerates Higher _1

On the hourly chart of GBP/USD at FXOpen, the pair failed to stay above the 1.3750 pivot level. As a result, the British Pound started a fresh decline below 1.3720 against the US Dollar.

There was a clear move below 1.3700 and the 50-hour simple moving average. The bears pushed the pair below 1.3650. Finally, there was a spike below the 1.3600 support zone. A low was formed near 1.3562 and the pair is now consolidating losses.

There was a minor move above the 1.3615 level. On the upside, the GBP/USD chart indicates that the pair is facing resistance near the 1.3650 level. There is also a key bearish trend line forming with resistance near 1.3650.

The next major resistance is near the 50% Fib retracement level of the downward move from the 1.3788 swing high to the 1.3562 low at 1.3675. A close above the 1.3670 resistance zone could open the doors for a move toward the 1.3700 zone. The 61.8% Fib retracement level is at 1.3700. Any more gains might send GBP/USD toward 1.3790.

On the downside, there is a key support forming near 1.3615. If there is a downside break below the 1.3615 support, the pair could accelerate lower. The next major support is near the 1.3560 zone, below which the pair could test 1.3500. Any more losses could lead the pair toward the 1.3440 support.

EUR/GBP Technical Analysis

Market Analysis: GBP/USD Dips as EUR/GBP Accelerates Higher _2

On the hourly chart of EUR/GBP at FXOpen, the pair started a decent increase from the 0.8500 zone. The Euro traded above the 0.8580 resistance level to enter a positive zone against the British Pound.

The pair settled above the 50-hour simple moving average and 0.8620. It traded as high as 0.8670 before a downside correction. There was a move below the 23.6% Fib retracement level of the upward move from the 0.8507 swing low to the 0.8670 high.

However, the pair is stable above the 0.8600 support zone. The next major support is near the 50% Fib retracement level of the upward move from the 0.8507 swing low to the 0.8670 high at 0.8590.

A downside break below 0.8590 might call for more downsides. In the stated case, the pair could drop toward the 0.8545 support level. Any more losses might call for an extended drop toward the 0.8505 pivot zone.

The EUR/GBP chart suggests that the pair is facing resistance near the 0.8635 zone. A close above the 0.8635 level might accelerate gains. In the stated case, the bulls may perhaps aim for a test of 0.8670. Any more gains might send the pair toward the 0.8700 level.

Source：FXOpen

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Gerik

Economic

Thailand Offers Expedited Trade Deal to Deter Tariff Imposition

Thailand has escalated its diplomatic and economic outreach to the United States in an attempt to prevent the implementation of a 36% export tariff threatened by the Trump administration. The revised trade proposal, submitted just before the expiration of a 90-day tariff suspension, reflects a calculated effort by Bangkok to preserve favorable trade ties with one of its largest partners.

Finance Minister Pichai Chunhavajira confirmed that the new offer includes wider access for US agricultural and industrial products, as well as commitments to purchase more American energy and Boeing aircraft. These gestures are aimed at rebalancing trade flows and addressing US grievances about Thailand’s persistent trade surplus.

Accelerated Timeline to Narrow Trade Surplus

Under the updated proposal, Thailand pledges to reduce its $46 billion trade surplus with the US by 70% within five years, achieving a full trade balance within seven to eight years. This is a notable acceleration from the previous offer, which projected a ten-year timeline for correcting the imbalance. The new targets suggest that Thailand is prioritizing the preservation of market stability and avoiding a disruptive tariff shock over long-term negotiation leverage.

This forward-leaning timeline is not merely symbolic. It reflects a causal response to external political pressure, as Thailand seeks to preempt tariff enforcement by aligning more closely with US economic interests. The immediacy of the commitment to eliminate import tariffs or non-tariff barriers for most goods upon deal acceptance, with slower adjustments for select items, supports this interpretation.

Geopolitical and Economic Stakes at Play

The proposal arrives at a sensitive juncture. With President Donald Trump signaling a more aggressive stance on trade, particularly toward countries with large bilateral surpluses, Thailand faces an urgent need to reposition itself as a cooperative partner. The Trump administration has framed such surpluses as indicators of unfair trade practices, and has wielded tariff threats as a mechanism for enforcing bilateral rebalancing.

The focus on American energy imports and Boeing aircraft purchases further illustrates the strategic calculus behind Thailand’s offer. These sectors represent politically sensitive industries in the US and have historically been focal points in American trade diplomacy. By committing to purchases in these areas, Thailand is appealing directly to constituencies that influence US trade policy.

Implications for Broader US-Asia Trade Dynamics

Thailand’s move may also carry broader implications for other Southeast Asian economies that maintain trade surpluses with the US. If the proposal is accepted and tariffs are avoided, it could establish a framework for other nations facing similar pressure to follow suit. However, it also risks reinforcing a bilateral model of economic negotiation that prioritizes immediate trade balances over multilateral rules and market forces.

The Thai offer reflects not just a willingness to make concessions but also an awareness of the shifting structure of global trade diplomacy. It underscores the growing importance of proactive engagement and targeted reciprocity in avoiding punitive outcomes in a less predictable global trade environment.

Thailand’s revised trade proposal marks a significant diplomatic and economic overture intended to forestall a damaging trade rupture. By offering faster surplus reductions and immediate concessions, Bangkok is not only trying to preserve market access but also repositioning itself in a changing global trade order. Whether this strategy will be enough to satisfy Washington remains to be seen, but it highlights Thailand’s increasing readiness to adapt under mounting geopolitical and economic pressure.