US officials are preparing to send letters to other countries about trade deals. Meanwhile, Global Times suggests extending the US-China trade truce. A South Korean delegation will visit the US next week to talk about tariffs, with a possible trade deal expected after the July 8 deadline. In terms of interest rates, Fed’s Bostic predicts there will be only one rate cut this year due to uncertainty. ECB’s Villeroy describes the current environment as a trade war, not a currency war. ECB’s Kazāks wants a careful, meeting-by-meeting approach, and SNB’s Schlegel reaffirms that Switzerland is not manipulating its currency. Markets saw the New Zealand dollar lead while the Swiss franc lagged. European stocks rose, and US 10-year yields fell by 5.7 basis points to 4.398%. Gold dropped 2% to $3,175.20, WTI crude increased by 0.3% to $61.80, and Bitcoin rose by 0.2% to $103,712. The dollar stayed stable against the euro and yen, with EUR/USD near 1.1200 and USD/JPY around 145.60. USD/CHF rose by 0.1% to 0.8368, while USD/CAD remained almost unchanged. Bond yields fell slightly, with 10-year yields at 4.40% and 30-year yields at 4.86%. The article summarizes current and upcoming trade negotiations among major economies, along with comments from central banks and market trends. Trade talks are expanding, with the United States aiming to establish or modify agreements beyond Asia. Letters are expected to be sent to several countries, indicating a new round of trade outreach. Additionally, Chinese state-run media suggests a desire to maintain calm US–China trade relations. This timing is notable as we are now midway through the year and approaching important deadlines. A South Korean delegation will soon meet with US officials to discuss tariffs. A deal may be reached shortly after July 8, allowing both sides time to finalize details. This focused engagement benefits industries affected by trade tensions, particularly in sectors like semiconductors and automotive goods. It shows how specific dates can influence market volatility and direction, even before official agreements are made. On the monetary policy front, Bostic indicated that a rate cut is still possible but likely to be just one unless new data suggests otherwise. This creates a narrow policy window. Villeroy’s description of a “trade war” is significant, given the mixed global policy responses. Importantly, Kazāks supported examining cases individually, emphasizing a cautious rather than reactive approach, which aligns well with current inflation trends. In Switzerland, Schlegel denied any accusations of currency manipulation, clarifying that the franc’s weaker performance wasn’t due to drastic interventions but rather to overall market trends related to yield differences. This suggests that central banks are increasingly vocal in shaping narratives. Regionally, the New Zealand dollar performed well, buoyed by optimism about a soft landing and higher yields—possibly both—while the Swiss franc did not perform as well. European equities rose gradually, supported by lower yields and no new policy shocks. The US 10-year yield fell to 4.398%, suggesting confidence that rate normalization can continue a bit longer before steepening again. It’s worth noting that core fixed income yields are also drifting lower without causing panic or requiring outside catalysts. Commodities showed a mixed trend. Gold fell by another 2% to $3,175.20 due to changing expectations about rates and inflation, rather than a flight to safe havens. WTI crude oil rose by 0.3% to $61.80 per barrel, reflecting supply reassessment more than a surge in demand. Bitcoin also saw a slight increase of 0.2% to $103,712, driven more by liquidity shifts than strong buying. The foreign exchange market remained balanced. The dollar showed stability, with EUR/USD near 1.1200, not allowing for significant breakout opportunities; USD/JPY was around 145.60, with little talk of intervention; USD/CHF rose by 0.1% to 0.8368. This indicates that interest rate spreads across G10 are steady. USD/CAD hardly changed, again highlighting how stable oil markets correlate with steady Canadian dollar flows. In the bond market, 10-year yields settled at 4.40% and 30-year yields reached 4.86%. This yield compression suggests we aren’t in a dislocated phase but are tracking expectations that don’t yet need adjusting. For those closely monitoring the coming weeks, the message is clear: stable yields and modest currency adjustments limit opportunities for aggressive trading. Future shifts will likely stem from policy minutes or data surprises rather than daily market flows. Let’s remain patient and vigilant.

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