Trump Targets BRICS Ally India; USD Strengthens

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.3580-1.3820

Euro                 1.5920-1.6170

Sterling            1.8490-1.8740

WTI Oil (opening level) $68.43

The CAD/USD is opening at 1.3700 ( 0.7299 )

The USD experienced modest gains with varied performance against its G10 currency peers. The USD Index rose slightly as market participants looked forward to today’s release of FOMC Minutes.

Headlines

·    Trump caused turmoil across global copper markets after he stated he would impose a 50% tariff on copper imports, double the 25% consensus. A move that if implemented will inflict higher costs abroad a wide section of the US economy due the multiple industries and applications that rely on copper. He also threatened up to 200% tariffs on pharmaceutical imports, with implementation delayed by 12 to 18 months.

·    Trump also stressed he would not offer additional extensions on country-specific levies set to hit in early August, and that he would tag imports from India with an additional 10% levy for their participation in BRICS. In addition, he could unilaterally declare a new tariff rate on the European Union within the next two days due to frustration over the bloc's taxes and fines targeting US technology firms.

·    In June 2025, US 1 year consumer inflation expectations dropped to 3%. Commodity price expectations rose for gas (4.2%), medical care (9.3%), college education (9.1%), and rent (9.1%).

·    Taiwan's trade surplus rose to USD 12.07 billion from USD 4.70 billion. Exports reached USD 53.32 billion, led by information, communication, and audio-video products (82.5%) and electronic parts (31.1%). Exports grew to the US, ASEAN, Japan, and China & Hong Kong, but fell to Europe.

Key Points

·    Equities: Trump confirms copper tariff; EU rally continues; UK exporters shine

·    Volatility: VIX eases to 16.8; SPX expected move ±0.44%; flat curve hints at calm

·    Digital assets: Bitcoin steady; ETH gains; IBIT inflows continue; ETHA dips

·    Fixed Income: US Treasury yields rise further ahead of 10-year auction

·    Currencies: USD see modest gains against its G10 currency peers

·    Commodities: HG copper surges to a near 30% premium over London

·    Macro events: US 10-year Notes auction & FOMC minutes from June meeting