Bassanese Bites: What’s the hurry? – July 07 2025
Global week in review
Global stocks rose further last week, reflecting hopes around US fiscal stimulus and trade talks.
Trade and fiscal hopes
Global stocks are now looking for almost any excuse to rally. Last week, the US Senate’s passing of the ‘Big Beautiful Bill’ was a reason to rally on the back of fiscal stimulus hopes, with concerns of rising US public debt put to one side. Trump signed the bill on Friday. The bond market vigilantes were nowhere to be seen.
Also cause for optimism was the US-Vietnam trade deal, even though it left imports from Vietnam facing a hefty 20% across-the-board tariff. So-called ‘transhipped’ goods – that is, goods exported through Vietnam but mainly made elsewhere (such as China) – will face a 40% tariff.
Resilient economic data and steady Fed
US economic data last week was generally firm, confirming the economy remains impressively resilient in the face of lingering tariff threats. May job openings and June employment growth were both higher than expected, while the key ISM manufacturing and service sector surveys held up close to market expectations.
Given lingering tariff uncertainty and firm economic data, US Fed Chair Jerome Powell again rightly signalled no hurry to cut rates again last week – despite the persistent cajoling of Trump to move quickly.
Tariff deadline looms large this week
There is not a lot of major global economic data due this week, with the focus likely to be on tariff policy.
The 9 July deadline for trade deals to be struck before the US imposes “reciprocal tariffs” on its trading partners takes place mid-week. At this stage it appears Trump is focusing on trying to extract concessions from major players like Europe, India and Canada – and will simply notify the tariffs that most other smaller countries will face. In turn, these major countries seem to have been dragging their heels, perhaps trying to test out if Trump is bluffing or not.
The bottom line is that the tariff saga has not gone away. Emboldened by the share market rebound and economic resilience, there’s a risk this week that Trump might unleash large tariffs again which in turn causes a market backlash – after which he may or may not ‘chicken out’. We simply don’t know at this stage.
