The euro faces new tariff threats, analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on July 9

Global Market Review

1. European and American market trends

U.S. stock market futures rose, S&P 500 mini futures rose 8.5 points (0.14%), Nasdaq 100 mini futures rose 29 points (0.13%), and Dow Jones mini futures rose 78 points (0.18%). European stocks opened high and closed high, Germany's DAX index rose 1.04%, and France's CAC index rose 1.18%.

2. Market news interpretation

The euro faces the threat of new tariffs, and the market expects trade agreements to limit exchange rate fluctuations

⑴ FrancescoPesole of the Netherlands International Group said that the euro may be under pressure against non-dollar currencies after Trump plans to write to the EU on Thursday and outline the new tariffs. ⑵ He pointed out that the impact of tariffs on the euro against the dollar is not clear, because the imposition of tariffs on the EU may also damage the US dollar, thereby offsetting the impact of the euro. ⑶ Markets expect the EU and the United States to reach a trade agreement before the new deadline on August 1, which will limit the substantial fluctuations in the euro against the dollar. ⑷Unless the U.S. data deviates significantly from expectations, the euro may continue to fluctuate against the US dollar between 1.16 and 1.18.

Trump's tariff remarks trigger market fluctuations, but ignore the differences in www.xmhouses.commodity and consumer goods markets

⑴ US President Trump said he would impose 50% and 200% tariffs on copper and drug imports respectively. Although these measures may not be implemented, this "one-size-fits-all" tariff strategy covers up different dynamics in the www.xmhouses.commodity and consumer goods markets and is not conducive to economic structural adjustment. ⑵On July 8, Trump announced his plan toCopper is subject to a 50% tariff, which U.S. www.xmhouses.commerce Secretary Howard Lunik said could www.xmhouses.come into effect at the end of July or August 1. ⑶On July 9, Freeport-McMoRan, one of the world's largest copper producers, rose 4.8%, reflecting the market's www.xmhouses.complex response to copper tariffs. ⑷On July 8, Trump also threatened to impose 200% tariffs on the pharmaceutical industry, saying that these tariffs may be implemented in 1 to 1.5 years. ⑸ On July 9, the stock price of European drugmakers performed flat, with Novo Nordisk falling 1.6%, AstraZeneca falling 0.33%, Novartis falling 0.5%, GlaxoSmithKline rising 0.1%, and Roche falling 0.1%.

European corporate profits face the most severe challenges in five years

⑴ European financial report season will be fully launched next week, and large www.xmhouses.companies including ASML, Saab, Novartis, Volvo and Nodea will announce their results one after another. ⑵ By the end of July, about two-thirds of European www.xmhouses.companies will www.xmhouses.complete financial reports, and the strong euro will become the main drag factor, resulting in the second-quarter earnings performance that may be the weakest in five years. ⑶Bank expects STOXX600 earnings per share to fall by 3% year-on-year, the worst performance in five quarters, mainly affected by declines in sales and adverse exchange rates. ⑷ The energy and consumer sectors are expected to be the main drag of the decline in profits, while the financial sector may perform relatively flat. ⑸ Although positive macroeconomic data may drive some www.xmhouses.companies to exceed expectations, Bank of America warned that a strong euro could weaken this positive impact and expects further cuts in earnings per share expectations in the www.xmhouses.coming months.

The impact of the British Treasury bond market on the pound's trend has intensified

⑴ The recent pound's trend has been significantly affected by the fluctuations in the UK's Treasury market, and the deterioration of the UK's fiscal situation has further aggravated the vulnerability of the pound. ⑵ The UK Office for Budget Responsibility (OBR) warned in its latest fiscal risk and sustainability report that UK public finance is in a vulnerable state. ⑶The impact of changes in UK Treasury yields on the pound is increasing, especially as the autumn budget approaches. ⑷ If the UK 10-year Treasury bond yield breaks through the dangerous range of 4.80%-4.92%, it may trigger a negative feedback loop, further pushing up the yield and aggravating fiscal concerns. ⑸ In this case, the pound may face pressure to depreciate across the board. ⑹Looking forward, the UK's monthly GDP data released on July 11 will become a key indicator, and the market expects it to grow by 0.1% month-on-month. If the data is lower than expected, the pound may be under further pressure.

UBS adjusts its U.S. bond strategy, waiting for a better opportunity

⑴ UBS strategist said in the report that the bank had closed its long positions when the 10-year U.S. bond yield reached 4.40%. ⑵ UBS initially established the position at the end of May, when the 10-year U.S. Treasury yield was 4.51%. ⑶ Before the non-farm employment data was released last week, UBS narrowed its stop loss to 4.40%. ⑷ The report points out that there may be a more suitable opportunity to re-use the US debt for a long time., but we need to wait for the market to understand more clearly the trend of the US job market, the impact of the "Big and American" bill, and the impact of higher tariffs on the bond market without the strengthening of the US dollar.

Minutes of the Federal Reserve meeting may reveal differences in tariffs and interest rates

⑴Minutes of the Federal Reserve's June 17-18 policy meeting will be released at 2 a.m. Beijing time on July 10, which is expected to show that there are differences within the Federal Reserve's economic impact on the rise in US import tariffs and are cautious in interest rate adjustments. ⑵ Minutes of the meeting may reveal that some Fed officials have different views on whether the price rise caused by tariffs is a short-term impact, and why seven officials do not expect interest rate cuts in 2025. ⑶ The Trump administration’s tariff policy has not yet been clarified, which has increased uncertainty in the Federal Reserve’s decision-making. ⑷Federal Director Christopher Waller and Vice Chairman Michelle Bowman have said they may consider a rate cut at their July 29-30 meeting. ⑸ The minutes of the meeting will provide details of the Fed's discussion at a critical period, when Trump publicly called on the Fed to cut interest rates sharply, although data and survey results show rising prices and slowing employment growth. ⑹Federal Chairman Powell previously said that the interest rate path will depend on data from June, July and August, which laid the foundation for possible rate cuts at the September 16-17 meeting. ⑺The Federal Reserve's economic forecast shows that although inflation is expected to rise, it will fall again in 2026, even if interest rates are lowered. ⑻However, the sustainability of inflation is still difficult to judge, and it is uncertain how www.xmhouses.companies allocate higher import costs and whether it will lead to sustained price increases. ⑼There are still differences within the Fed on when and how to cut interest rates, and high tariffs and potentially high inflation make decisions more www.xmhouses.complicated.

The Bank of England relaxes mortgage restrictions on high loan income ratio

⑴ The Bank of England said on Wednesday that banks and construction associations can issue more mortgages with high loan income ratio (LTI) to support first-time home buyers. ⑵ The upper limit of high LTI loan ratio for individual lending institutions has been relaxed from the previous restrictions to more than 15%, but the overall upper limit for the entire industry remains at 15%. ⑶ The Bank of England said the move is intended to allow more first-time home buyers to obtain loans, but pointed out that the deposit requirements of lenders are still a bigger obstacle for most borrowers. ⑷The move www.xmhouses.comes after the Labor government called on regulators to find a balance between promoting economic growth and maintaining financial stability. ⑸ The high loan-to-income ratio restrictions were introduced in 2014, aiming to prevent excessive lending from causing risks in banks. This policy effectively curbed excessive lending before the 2008 financial crisis. ⑹The Bank of England pointed out that the loan ratio of individual lenders is far below this threshold due to banks' unwillingness to break through the 15% high-risk loan ceiling, limiting the growth of the mortgage loan market. ⑺ Data shows that in the first quarter of 2025, the overall proportion of high loan income for British banks was 9.7%, which means that few individual lenders will reach the 15% industry limit. ⑻UKThe central bank expects that after the relaxation of restrictions, the overall proportion of high-risk loans may reach 11% by the end of 2025. ⑼The Bank of England will also reassess the bank's overall capital requirements in its December financial stability report, the first such assessment in five years.

The Bank of Japan may postpone interest rate hikes due to US tariffs

⑴ Former Bank of Japan review www.xmhouses.committee member Masa Sakurai said that the Bank of Japan may suspend interest rate hikes by at least March next year to assess the impact of US tariffs on the economy. ⑵ The Trump administration imposed higher tariffs on 14 countries, including Japan, which frustrated Japan's exports and lack of progress in trade negotiations, which could force the Bank of Japan to lower its economic growth forecast in its July 31 quarterly forecast. ⑶The Bank of Japan will continue to suspend interest rate hikes before confirming whether www.xmhouses.companies will continue to raise wages and increase capital expenditures. ⑷ Sakurai Masa pointed out that the Bank of Japan will closely monitor the "short-view" corporate prosperity survey released in early October and the signals of www.xmhouses.companies' wage prospects from September to October. ⑸ He mentioned that due to Trump's tariff policy, the conditions for Japan's interest rate hike this year have been destroyed, and Japan may find it difficult to obtain US auto tariff exemptions. ⑹If corporate profits are hit hard by tariffs, the interest rate hike may be further postponed to fiscal year 2026. ⑺Masa Sakurai said that the Bank of Japan hopes to eventually raise interest rates to at least 1%, ideally reaching 1.5%, but at present, due to tariff issues, interest rate hikes are difficult to rationalize.

UAE says the oil market needs OPEC+ to significantly increase supply

UAE Energy Minister said that the oil market needs OPEC+'s latest super-large increase in production, publicly defending this unexpected decision. During his OPEC seminar in Vienna, UAE Minister of Energy Suhail Al Mazrouei said that although OPEC and its allies had previously increased supply, the market inventories did not increase, which proves that the market does need more oil. In April this year, OPEC+ unexpectedly announced an increase of 411,000 barrels per day, and increased production again in May and June. Last Saturday, the organization announced that it would further increase production by 548,000 barrels per day. However, due to recent signs of tightening supply, oil prices have actually risen slightly since then. In response to the question of whether to worry about oversupply at the end of the year, he said, “We are not worried because we weigh each time we make a decision. Even though supply has increased in the past few months, we have not seen a significant increase in inventory, which means the market needs these crude oils”.

3. Trends of major currency pairs in the New York Stock Exchange before the New York Stock Exchange

Euro/USD: As of 19:16 Beijing time, the euro/USD fell and is now at 1.1704, a drop of 0.18%. Before New York, the euro fell slightly against the dollar in the last intraday trading, with the dominant short-term bearish correction trend continuing, and the price faces obvious negative pressure as trading below the EMA50, indicating the current bullish momentum.

GBP/USD: As of 19:16 Beijing time, GBP/USD fell and is now at 1.3584, a drop of 0.03%. Before the New York market, the (GBPUSD) price rose slightly in the last intraday trading, supported by positive signals from (RSI), to get rid of this situation after reaching the oversold level before, which opened the way for more downward trends in the following trading, especially moving along the bearish correction trend line in the short term, which has continued to form a greater negative pressure on the pair's trend as its trading is below EMA50.

Spot gold: As of 19:16 Beijing time, spot gold fell and is now at 3292.63, a drop of 0.26%. Before the New York Stock Exchange, affected by the short-term bearish correction trend, the (gold) price continued to fall in the last intraday and traded along the bias line. As the price stabilized below EMA50, the negative pressure remained valid, indicating a weak bullish momentum.

Spot silver: As of 19:16 Beijing time, spot silver fell and is now at 36.594, a drop of 0.37%. Before the New York market, the (silver) price fell in the last intraday trading, relying on the support of EMA50, while testing a small bullish trend line in the short term, representing the last chance to regain the bullish momentum required for recovery and rise again. With the help of positive signals (RSI), the stability of the price above the nearby support level has strengthened the positive situation.

Crude Oil Market: As of 19:16 Beijing time, U.S. oil rose to 68.430, up 0.15%. Before the New York Stock Exchange, (crude oil) closed at a low level in the last intraday trading. With negative overlap signals on (RSI), the indicator did not reach a strong overbought level, but the contradiction between it and the price trend indicates a negative divergence, which may put temporary pressure on prices in the short term.

4. Institutional View

Citi: Raising Disney's target price to $140, maintaining a buy rating

Citibank raised Disney's target price from $125 to $140, and maintaining its buy rating. According to analysts surveyed by FactSet, Disney's average rating is overweight, with an average target price of $131.88.

The above content is about "【XM Foreign Exchange]: The euro is facing the threat of new tariffs. The entire content of the short-term trend analysis of spot gold, silver, crude oil and foreign exchange on July 9 was carefully www.xmhouses.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for your support!

Due to the author's limited ability and time tightness, some content in the article still needs to be discussed and studied in depth. Therefore, in the future, the author will conduct extended research and discussion on the following issues: