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On Tuesday (July 15), ahead of the U.S. Consumer Price Index (CPI) and the start of the U.S. earnings season, investor sentiment was cautious, with the outlook for U.S. trade policy remaining a key focus for the market. Trump stated that he is open to further trade negotiations, including discussions with the European Union, but simultaneously criticized the trade imbalance in U.S.-Japan automotive trade. The rise in yields of major country bonds triggered increased market risk aversion, leading to gains in the U.S. dollar and U.S. stocks, while the GBP/USD fell for the seventh consecutive day. The VIX fear index and MOVE index both rose, while gold and Bitcoin experienced a pullback after reaching highs.
The three major U.S. stock indices generally rose, with the Dow Jones up 0.2%; the S&amp;P 500 up 0.14%; and the Nasdaq up 0.27%, closing at 20,640 points; the China Golden Dragon Index rose 0.73%. In terms of popular stocks, Boeing's share price rose 1.6%, making it the largest gainer among Dow components, while Meta rose 0.48%, with reports stating that Meta will spend hundreds of billions of dollars to expand AI. Cryptocurrency-related stocks generally rose, with Circle up over 9%. Large tech stocks had mixed performances, with Apple down 1.20%, Nvidia down 0.52%, Microsoft down 0.06%, and Tesla up 1.08%.
The yield on the 10-year U.S. Treasury rose 2 basis points to 4.43%, the U.S. dollar index rose 0.24%, surpassing 98.0; the EUR/USD fell 0.22%, marking three consecutive days of decline. The USD/JPY rose 0.21%, rebounding close to 148.0; gold fell 0.35%, losing and regaining $3,360; WTI crude oil fell 2.79%, dropping below $67.0; Bitcoin rose 0.6%, briefly reaching a historic high of $123,236, before falling back below $120,000; Ethereum rose over 1.35%.
Macro News
EU: Striving to reach an agreement with the U.S., preparing for countermeasures
Trump stated that he is open to further trade negotiations, including discussions with the European Union. Earlier, Trump imposed a 30% tariff on goods imported from the EU starting August 1. EU Trade Commissioner Maros Sefcovic stated that the EU will strive to reach a good trade agreement with the U.S., but if U.S.-EU trade negotiations fail, the EU is prepared to impose additional counter-tariffs on U.S. imports worth €72 billion (approximately $84 billion).
EU Commission President Ursula von der Leyen responded that imposing a 30% tariff on EU export products would disrupt important transatlantic supply chains, harming businesses, consumers, and patients on both sides of the Atlantic. The EU will extend the suspension of countermeasures until early August to prioritize negotiations.
German Chancellor Friedrich Merz stated that if the U.S. government imposes a 30% tariff on EU imports starting August 1, it will severely hurt the country's exporters &#34;to the core.&#34;
If the situation really occurs, Germany must postpone the implementation of some economic policies.
Trump warns of 100% tariffs and secondary tariffs on Russia.
The United States announced an agreement with NATO to provide Ukraine with advanced military equipment, with NATO responsible for payment, involving billions of dollars in missiles and other military supplies. In addition, Trump warned Russia that if an agreement on a ceasefire in Ukraine is not reached within 50 days, very severe tariffs will be imposed on Russia, with a rate of about 100%, and mentioned the imposition of secondary tariffs on countries purchasing Russian oil.
Trump indicated that the secondary tariffs are separate from the bill being pushed by the U.S. Congress, which proposes imposing tariffs of up to 500% on countries buying Russian oil.
Phil Flynn, a futures analyst at Price, stated that the market is more concerned about the negative impact of trade negotiations than the sanctions on Russian oil, which is bearish for oil prices. He also mentioned that China and India are the main buyers of Russian crude oil, and the U.S. is unlikely to fully sanction the two countries, limiting the impact of sanctions on oil prices.
Goldman Sachs raises oil price forecast for the second half of the year, predicting prices will reach $4,000 by mid-next year.
In light of limited Russian crude oil production, potential disruptions to oil supply, and decreasing OECD inventories, Goldman Sachs has raised its oil price forecast for the second half of this year. Goldman Sachs now estimates that the average price of Brent crude oil futures in the second half of the year will be $66 per barrel, which is $5 higher than previously estimated, while the average forecast for New York crude oil futures has been raised by $6 to $63 per barrel. For next year, Goldman Sachs has not adjusted its forecast, with average price predictions for Brent and New York crude oil remaining at $56 and $52 per barrel, respectively.
Goldman Sachs pointed out that the lack of change in next year's forecast is due to high oil prices, with a more severe oversupply situation expected globally next year, with a daily surplus of 1.7 million barrels. Goldman Sachs estimates that the Organization of the Petroleum Exporting Countries and its allies (OPEC+) will increase production by 550,000 barrels per day in September, completing the restoration of the 2.2 million barrels of additional voluntary production cuts. Goldman Sachs also estimates that if Iranian supply is disrupted, Brent crude oil could rise to $90 per barrel, and if OPEC+ further restores the 1.65 million barrels per day production cut that began in April 2023, oil prices could potentially drop to $40 per barrel next year.
Goldman Sachs noted that central banks and other institutions bought an average of about 77 tons of gold per month from January to May this year. Goldman Sachs still expects gold prices to reach new highs in the coming quarters. The net positions of funds in gold have fallen from the highs in April, providing more structural space for gold ETFs and central banks to continue buying. Goldman Sachs still predicts that gold prices will reach $3,700 per ounce by the end of 2025 and rise to $4,000 by mid-2026, reiterating its long-term bullish investment recommendation on gold.
Trump will announce a new AI project worth over $540 billion.
According to foreign media citing sources, U.S. President Trump will announce an artificial intelligence (AI) and energy infrastructure project worth $70 billion (HKD 546 billion) in Pennsylvania on Tuesday. This project is seen as part of Trump's push for technological development
According to reports, Trump will announce related news together with Republican Senator David McCormick, who represents Pennsylvania. McCormick is also the host of the Pennsylvania Energy and Innovation Forum held on Tuesday. About 60 executives from various companies will attend the forum.
Beth Hammack: Supports the Federal Reserve to wait for a while before cutting interest rates
Beth Hammack, President of the Federal Reserve Bank of Cleveland, stated that the Federal Reserve has not yet achieved its inflation target and supports a wait-and-see approach to assess the impact of the White House's new policies on inflation, hoping to see inflation decline before deciding to cut interest rates. Hammack also pointed out that she has heard that businesses are reducing or suspending investment plans due to unclear tariff policies, but the economic pace remains good, allowing the Federal Reserve to wait a little longer. She believes that the federal funds rate is close to neutral levels.
Market expectations
U.S. stocks: All three major U.S. stock indices rose, with the Dow Jones up 0.2%, the S&amp;P 500 up 0.14%, and the Nasdaq up 0.27%.
European stocks: European stock markets showed mixed results, with the German DAX 30 index down 0.39%. The French CAC 40 index fell 0.27%. The UK FTSE 100 index rose 0.64%.
Bond market: The yield on the U.S. 10-year benchmark government bond is about 4.43%, up 2 basis points from the previous trading day.
Commodities: Gold fell 0.36%, reported at $3342.5 per ounce. WTI crude oil fell 2.79%, reported at $66.83 per barrel.
Foreign exchange: The U.S. dollar index rose 0.24%, reported at 98.1. The USD/JPY rose 0.21%, while the EUR/USD fell 0.22%.
Cryptocurrency: Bitcoin rose 0.62% in the last 24 hours, currently reported at $119,739. Ethereum rose 1.38% in the last 24 hours, currently reported at $3,010.
Hong Kong stocks: The Hang Seng Index night market futures closed at 24,264 points, up 79 points, 61 points higher than yesterday's Hang Seng Index closing of 24,203 points, with a turnover of 7,779 contracts. The night market futures for the National Index closed at 8,750 points, 17 points higher than yesterday's National Index closing.
Global company news
Meta reportedly plans to spend hundreds of billions of dollars to expand AI, considering changing AI models to closed source
Meta CEO Mark Zuckerberg stated that the group will spend hundreds of billions of dollars to build superintelligence. He indicated that this investment includes hiring more AI elites and acquiring related companies to promote AI development.
The New York Times quoted sources saying that during discussions on AI development strategies, Meta mentioned the possibility of changing the AI model Behemoth from an open-source model to a closed-source model, which could lead to a complete change in the company's development approach
Musk: Does Not Support Merger Between Tesla and xAI
Elon Musk, CEO of the American electric vehicle company Tesla, stated that he does not support the proposal to merge Tesla with the artificial intelligence (AI) startup xAI, which he controls. In March of this year, Musk conducted an online poll, and after receiving widespread support, he initiated the merger of xAI with X. The Wall Street Journal reported last week that Musk-controlled Space Exploration Technologies Corp. (SpaceX) invested $2 billion in xAI.
Boeing Delivers Three Aircraft to China on Sunday
Chinese airlines received three Boeing (BA.US) aircraft on Sunday, marking a rare occurrence of three aircraft being delivered on the same day, indicating a easing of trade tensions between China and the United States. Flight tracking website Flightradar 24 showed that starting at 8:45 AM Seattle time on Sunday, three 737-8 Max aircraft from Xiamen Airlines, Shanghai Airlines, and Shandong Airlines took off within an hour.
Today's Key News Preview
China Q2 GDP Year-on-Year
China June Total Retail Sales of Consumer Goods Year-on-Year
China June Industrial Value Added Above Designated Size Year-on-Year
Federal Reserve's Collins to Speak
Germany July ZEW Economic Sentiment Index
Eurozone July ZEW Economic Sentiment Index
Eurozone May Industrial Production Month-on-Month
Canada June CPI Month-on-Month
U.S. June CPI
U.S. July New York Fed Manufacturing Index
Federal Reserve Governor Bowman to Speak at Meeting
Federal Reserve Governor Barr to Speak

July 15 Financial Breakfast: The VIX index rose more than 5%, the US dollar and US stocks generally increased, and the GBP/USD fell for seven consecutive days. Investor sentiment was cautious ahead of the release of the US Consumer Price Index (CPI), focusing on US trade policy. Trump expressed an open attitude towards further trade negotiations, and rising yields on major country bonds triggered risk aversion. The three major US stock indices rose, with the Dow Jones up 0.2%, the S&P 500 up 0.14%, and the Nasdaq up 0.27%. Gold and Bitcoin surged and then retreated, while WTI crude oil fell 2.79%

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July 15 Financial Breakfast: VIX rises over 5%! US dollar and US stocks rise, GBP/USD falls for seven consecutive days, Bitcoin and gold surge and then retreat