Daily Market Outlook, July 11, 2025 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute…

Overnight Friday, markets took another Trump tariff-inspired swoon south. U.S. President Donald Trump took to television to add new tension to his ongoing trade conflicts, disrupting Wall Street's recent rally to record levels. Trump announced that he would send out tariff letters to Canada and Europe "today or tomorrow," and he proposed that the overall tariff rates on other nations that do not receive a letter could be increased to 15% or 20%, up from the existing 10% baseline. Shortly after, he shared the letter to Canada on social media, stating that a 35% tariff would be applied to all Canadian goods starting August 1. However, market concerns eased somewhat when an administration official indicated that an exemption was likely for items included under the United States-Mexico-Canada Agreement. Wall Street futures slid and EUROSTOXX 50 futures fell before managing to recover some stability. Trump has announced that the EU will also receive a letter, leading investors to believe that trade negotiations between the two are not progressing well. EU officials had previously indicated that their goal was to finalise a deal before August 1. The economic data releases in both Europe and the U.S. are limited on Friday, prompting investors to prepare for the upcoming second-quarter corporate earnings in the U.S. next week, which will help assess the effects of Trump's tariffs. In a troubling indication of future developments, Fast Retailing, the parent company of Uniqlo, cautioned that tariffs will significantly impact its U.S. business later this year, and the company intends to increase prices to mitigate the effects. As a result, its stock fell by nearly 7% in Tokyo. Bitcoin surged to a record peak on Friday, driven by interest from institutional investors and supportive measures from the administration of U.S. President Donald Trump. The recent surge in Bitcoin's value is fuelled by consistent buying from institutional investors, who are significantly purchasing available supply, creating diminishing liquidity on trading platforms.

The UK economy shows signs of fragility, with GDP contracting by -0.1% in May after a -0.3% decline in April. The 3m/3m growth rate has slowed to 0.5%, while y/y growth dropped to 0.7%, the weakest since last June. Manufacturing (-1.0%) and construction (-0.6%) declines outweighed modest services growth (+0.1%). Global trade frictions continue to challenge production, while labour market concerns and potential tax hikes weigh on confidence. Heatwaves may further dampen activity, making it difficult for the economy to meet the BoE’s Q2 growth forecast of 0.25%.

The upcoming week holds a packed macroeconomic slate. On Tuesday, the spotlight will be on China’s Q2 GDP figures. Earlier trade gains during the quarter, coupled with increased government spending, are expected to provide support. However, the outlook remains fragile due to weak domestic demand, high debt levels, and deflationary pressures. 

The main highlight will be the U.S. CPI report on Tuesday, where inflation is anticipated to show further growth. A 0.3% month-on-month increase in the headline figure is forecasted, which would push the year-on-year rate to 2.7% from 2.4%. Core CPI is also projected to rise by 0.3% month-on-month, bringing the year-on-year rate back to 3.0% from 2.8%. Both estimates align closely with the Cleveland Fed’s Nowcast. Markets are likely to react strongly to any significant deviations, especially given concerns about tariff pass-through effects and fiscal uncertainties following the passage of Trump’s tax legislation. Additional U.S. data releases include PPI, industrial production, and the Beige Book on Wednesday, as well as retail sales on Thursday. Early July survey data will also begin to emerge, with the University of Michigan consumer sentiment index on Friday being a key focus.

In the UK, it’s set to be a pivotal week. On Tuesday, the Chancellor will deliver a policy update at Mansion House, followed by a monetary policy perspective from Governor Bailey. Wednesday will feature the release of CPI data, with labour market reports scheduled for Thursday. Both are critical for the Bank of England’s decision-making. A further decline in labour market activity would carry more weight than inflation volatility, given recent signs of weakening employment indicators. In the Eurozone, the economic calendar is relatively light, with the ZEW survey on Tuesday being the only notable event.

Today's key macro events: France HICP release, Canada employment data, US Federal budget balance update, and speeches by ECB officials Panetta, Vujcic, and Cipollone.

Overnight Headlines

  • Trump Slaps 35% Tariff On Canadian Goods, Eyes 15–20% On Others

  • Stock Futures Drop, Dollar Rises As Tariffs Target Canada And EU

  • Trump Plans ‘Major’ Statement On Russia Monday, Mulls New Sanctions

  • Oil Gains Amid Geopolitical Tensions In Middle East

  • Gold Edges Higher Amid Trade Tensions And Tariff Moves

  • Trump’s Brazil Tariff Rattles Coffee Markets, Prices May Rise In US

  • Bitcoin Hits Another Record High As Crypto Rally Extends

  • Flutter To Buy Boyd Gaming’s Stake In FanDuel

  • T-Mobile–US Cellular Deal Clears As DoJ Won’t Seek Injunction

  • Levi Strauss Raises FY Outlook On Strong Direct-To-Consumer Sales

  • Pimco Sees Japan Attracting Capital Amid Global Tariff Diversification

  • Goldman Sachs Appoints Ben Wallace As Americas M&A Co-Head

  • Apple Prepares New iPads, iPhone 17e, And Mac For 2026 Launch

  • Capgemini To Acquire India’s WNS For $3.3B In AI Push

  • Peru Holds Rate As Copper Tariffs Threaten Export Outlook

FX Options Expiries For 10am New York Cut 

(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)

  • EUR/USD: 1.1600 (1.1BLN), 1.1650 (470M), 1.1665 (930M), 1.1685 (527M)

  • 1.1700 (2.6BLN), 1.1715 (592M), 1.1725-30 (634M), 1.1740-50 (613M)

  • 1.1770 (2.8BLN)

  • EUR/CHF: 0.9400 (251M). EUR/GBP: 0.8645 (260M)

  • GBP/USD: 1.3600-15 (414M)

  • AUD/USD: 0.6550-60 (847M), 0.6600 (380M). AUD/NZD: 1.0900 (302M)

  • USD/CAD: 1.3635 (777M), 1.3650 (725M), 1.3700 (936M), 1.3710-20 (548M)

  • USD/JPY: 146.20-30 (1BLN), 146.75 (528M), 146.90-147.00 (752M)

  • 147.20 (350M), 147.40-50 (640M), 147.65 (513M)

CFTC Positions as of the Week Ending July 4th 

  • Speculators have raised the net short position in CBOT US Treasury bonds futures by 2,672 contracts to a total of 104,457. They have also increased the net short position in CBOT US Ultrabond Treasury futures by 17,436 contracts, bringing it to 226,962. The net short position in CBOT US 10-year Treasury futures has been increased by 103,531 contracts, resulting in a total of 783,662. The CBOT US 5-year Treasury futures net short position has grown by 13,373 contracts to 2,477,002, while the CBOT US 2-year Treasury futures net short position is up by 50,444 contracts, totaling 1,280,648. 

  • Equity fund managers have boosted their net long position in S&P 500 CME by 3,352 contracts, reaching 844,576. Conversely, equity fund speculators have increased their net short position in S&P 500 CME by 29,824 contracts to 298,864. 

  • The Japanese yen net long position stands at 127,338 contracts, the Euro's at 107,537 contracts, the British pound's at 31,399 contracts, and the Swiss franc shows a net short position of -23,853 contracts. Bitcoin has a net short position of -1,756 contracts.

Technical & Trade Views

SP500

  • Daily VWAP Bullish Above 6246 Target 6400

  • Weekly VWAP Bullish Above 6100 Target 6515

EURUSD 

  • Daily VWAP Bearish Below 1.1710 Target 1.16

  • Weekly VWAP Bullish Above 1.1640 Target 1.19

GBPUSD 

  • Daily VWAP Bearish Below 1.3580 Target 1.3450

  • Weekly VWAP Bearish Below 1.3580 Target 1.3450

USDJPY 

  • Daily VWAP Bullish Above 1.45 Target 1.48

  • Weekly VWAP Bullish Above 1.45 Target 1.51

XAUUSD

  • Daily VWAP Bullish Above 3320 Target 3420

  • Weekly VWAP Bearish Below 3350 Target 3290

BTCUSD 

  • Daily VWAP Bullish Above 113k Target 120k

  • Weekly VWAP Bullish Above 108k Target 130k