US Sets Deadline for russia on Ukraine Ceasefire, Tightens Sanctions Pressure

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

US Dollar        1.3630-1.3870

Euro                 1.5800-1.6050

Sterling            1.8250-1.8490

WTI Oil (opening level) $66.63

The CAD/USD is opening at 1.3752 ( 0.7272 ) 

The US dollar and even more so the Japanese yen powered sharply higher yesterday, particularly against a suddenly weak Euro in the wake of the EU-US trade deal.

The FOMC meets tomorrow, with no anticipation of a cut at the meeting, while the Bank of Japan meets on Thursday.

EURUSD traded all the way to 1.1575 overnight, some 200 pips below (it was 1.1770) the Monday high, which has it already challenging the range since late June of 1.1557. The range toward the prior major high of 1.1214 in late 2024 could be opened up on a significant break of 1.1500-1.1450. The euro was weak across the board.

Headlines

·    Trump gave russia 10 to 12 days to agree to a ceasefire in Ukraine or face mounting sanctions and possibly secondary sanctions against countries that import russian oil. This shortens the prior timeline for the threatened sanctions, which was set at 50 days earlier this month..

·    The U.S. and China will resume trade talks today after top officials met in Stockholm on Monday, discussing disputes and extending their trade truce by three months. U.S. Treasury Chief Scott Bessent and China's Vice Premier He Lifeng led the negotiations. With an August 12 deadline looming, a lasting tariff agreement is needed to prevent major global supply chain disruptions and the reintroduction of triple-digit U.S. tariffs.

·    CBI's UK retail sales gauge rose to -34 in July 2025 from June's -46, missing expectations of -26. Despite the improvement, retail sales volumes declined for the tenth month due to rising prices and economic uncertainty affecting consumer spending.

·    The Dallas Fed’s Texas manufacturing index improved to 0.9 in July from -12.7 in June, showing stability after declines. Production surged to a three-year high, with orders, capacity use, and shipments turning positive. Manufacturers' outlook brightened and hiring increased, along with a sharp rise in work hours.

·    Trump stated he will announce pharma tariffs soon and will address pharma issues with the UK, affirming he won't use tariffs to block the UK. 

Key Points

·    Equities: US-EU trade deal, record US closes, Europe reverses gains, autos weak

·    Volatility: VIX steady near 15, SPX implied move ±0.33% (day), ±0.8% (week)

·    Digital assets: BTC steady, ETHA +4.4%, IBIT inflows, altcoins consolidate

·    Fixed Income: European yields drop in first session after the EU-US trade deal

·    Currencies: EUR crushed across the board after the EU-US trade deal

·    Commodities: Gold and silver remain on the defensive, though ranges so far holding