South Korea’s FX Reserves Climb to 5-Month High in June
South Korea's foreign exchange reserves rose to January's high of $410.2 billion in June 2025, up from $404.6 billion the previous month. The increase was primarily driven by a jump in deposits, which climbed to $26.5 billion from $19.7 billion in May, followed by a slight uptick in Special Drawing Rights (SDRs) to $15.9 billion from $15.7 billion. In contrast, securities holdings declined to $358.5 billion from $360 billion, while gold reserves ($4.8 billion) and the IMF reserve position ($4.5 billion) remained unchanged. The mixed movement in components reflects continued volatility in the composition of South Korea’s reserves amid shifting global financial conditions. Despite the dip in securities, the overall rise in reserves indicates efforts to maintain stability in a complex economic landscape.
Ibovespa Eases on Wednesday
The Ibovespa fell 0.4% to close at 139,051 on Wednesday, reflecting a convergence of external and domestic headwinds. Abroad, the unexpected loss of 33,000 jobs in June’s ADP report and renewed uncertainty over US trade deals ahead of the July 9th tariff deadline have weighed heavily on Brazil’s export-sensitive equities. Domestically, May’s 0.5% contraction in industrial output, marking two consecutive monthly declines, underscored a cooling economy. Meanwhile, the central bank reaffirmed that its 15% Selic rate will remain “restrictive for a very prolonged period,” tightening financial conditions for borrowing-dependent sectors. Fiscal unease over the impasse on the IOF tax decree and proposed R$20 billion in 2026 tax-incentive cuts further unsettled investors. Companhia Sanea (-3.8%), Localiza (-6.1%), Hapvida (-5.9%), Natura (-7.5%) and Lojas Renner (-3.7%) led the decline, while mega-caps Petrobras (2.7%), Vale (3.8%) and Ambev (2.5%) helped offset losses.
TSX Sets Record High
The S&P/TSX Composite Index edged up to a fresh record of 26,870 on Wednesday as investors balanced tepid economic signals on both sides of the border with progress in US–Canada trade talks. Ottawa’s pledge to lift all retaliatory tariffs by July 9th followed last week’s digital services tax repeal, but had little fresh impact, keeping focus on Canada’s flat flash GDP for May and the US’s unexpected 33,000-job decline in June—the latter driving modest Treasury yield gains. Sector-wise, communications and materials led the advance: Rogers Communications leapt 7.2% on a BMO price-target upgrade, Teck Resources and First Quantum Metals rallied 3–3.7% on stronger copper outlooks, and Bombardier soared 21.4% after securing a 50-aircraft order. In contrast, technology underperformed, with BlackBerry down 8.2% on restructuring concerns, and defensive names such as Waste Connections, Great-West Lifeco and Cameco each slipped more than 3.5%.
S&P 500 Closes at Fresh High
The S&P 500 and Nasdaq advanced on Wednesday, rising 0.5% and 0.8%, respectively, with the S&P 500 closing at a new record high while the Dow ended flat. Markets were lifted by strong tech gains and news of a US-Vietnam trade agreement that includes 20% tariffs on certain Vietnamese imports. Investor sentiment was further bolstered by renewed trade optimism and soft labor market data, which reinforced expectations for Federal Reserve rate cuts. Apple (+2.2%), Nvidia (+2.6%), and Tesla (+5%) led the rally, helping the Nasdaq to climb. However, ADP data showed private-sector payrolls unexpectedly fell by 33,000 in June, marking the first decline in more than two years and raising fresh concerns over labor market strength. Meanwhile, President Trump’s sweeping tax-and-spending bill, projected to add $3.4 trillion to the national debt, passed the Senate and now moves to the House, where political divisions may delay final approval.
WTI Oil Jumps 3% as Iran Cuts IAEA Ties
WTI crude oil futures rose 3% to settle at $67.4 per barrel on Wednesday as geopolitical tensions flared after Iran suspended cooperation with the U.N. nuclear watchdog, amid a surprise build in US crude inventories. Iran’s move added a modest risk premium to prices, though analysts noted that no actual supply disruptions have occurred. Meanwhile, US crude stocks unexpectedly rose by 3.8 million barrels, with gasoline demand falling to 8.6 million bpd—well below the 9 million threshold considered healthy for summer. Meanwhile, OPEC+ plans to gradually increase output, but these moves are largely priced in, with Saudi Arabia notably raising exports in June. Traders now await the US jobs report, which could influence Fed rate cut expectations and, by extension, the oil demand outlook.
Natgas Futures Jumps as Summer Demand Heats Up
US natural gas futures rose more than 2% to above $3.4/MMBtu on Wednesday, snapping a two-day losing streak as hotter mid-July forecasts boosted expectations for stronger air-conditioning demand. A smaller-than-expected inventory build and potential winter supply concerns, especially for January contracts, as key upside risks. In the Lower 48, gas output slipped to 106.2 bcfd in early July, down slightly from June, while demand projections increased with warmer temperatures. LNG exports also dropped to 14.4 bcfd in June, further tightening supply. Meanwhile, geopolitical factors continue to influence the market, with US sanctions on Russia’s Arctic LNG 2 project curbing exports and President Trump urging the EU to increase US LNG imports. Uncertainties around tropical storm activity and its dual impact on both supply and demand also added volatility to the outlook.
Crypto currencies on demand on Wednesday
Positive momentum persisted in the cryptocurrency markets, with Ether gaining 6.93%, and Bitcoin rising by 3.52%.
Agricultural Commodities Updates: Orange Juice Plunges by 11.00%
Top commodity losers are Orange Juice (-11%) and Cocoa (-6.56%). Gains are led by Wheat (3.35%), Corn (2.48%) and Palm Oil (2.34%).
Metals Commodities Updates: Platinum Gains by 4.69%
Top commodity gainers are Platinum (4.69%), Steel Rebar (2.30%), Copper (2.12%) and Gold (0.41%).
Energy Commodities Updates: Heating Oil Gains by 3.50%
Top commodity gainers are Heating Oil (3.50%), Crude Oil WTI (3.01%) and Brent Crude Oil (3%). Biggest losers are Natural Gas EU Dutch TTF (-1.87%) and Natural Gas UK GBP (-0.50%).
Qualcomm Hits 17-week High
Qualcomm increased to a 17-week high of 162.15 USD. Over the past 4 weeks, Qualcomm gained 8.84%, and in the last 12 months, it decreased 20.48%.
Brazilian Real Strengthens to 9-Month High
The Brazilian real has strengthened past 5.44 per USD in July, its strongest level in nine months, amid hawkish monetary policy signals, steady inflation control efforts, and dovish expectations for the US Fed. The central bank’s monetary policy director reaffirmed that the Selic, currently at 15%, is not only restrictive but will be held at elevated levels for a “very prolonged” period to re-anchor inflation expectations, which remain influenced by Brazil’s backward-looking price dynamics. Meanwhile, June’s surprise loss of 33,000 US private-sector jobs added pressure on the dollar and spurred markets to increase bets on Fed cuts as early as July, narrowing the US-Brazil yield spread and favoring the real. Meanwhile, ongoing legal battles over the IOF decree and political infighting have so far not undermined the Central Bank’s credibility or forward guidance, allowing the real to hold firm even amid fiscal uncertainties.
Russia Unemployment Falls to New Record Low
Russia’s unemployment rate fell to 2.2% in May of 2025 from 2.3% in the prior month, below market forecasts of 2.3% to record a new record low. The result was in line with statements from the Central Bank of Russia, flagging shortages in the labor force due to the Russian military mobilization and the reduced the capacity of the Russian economy.
Russia Sustains Moderate Retail Sales Growth
Retail sales in Russia rose by 1.8% year-on-year in May 2025, following a 1.9% increase in the prior month. On a monthly basis, retail sales rose by 2%, rebounding from a 2.1% slump in the previous month. Considering the first five months of 2025, retail trade grew by 2.3%, down from 10.5% in the same period in 2024.
Mexican Peso Holds Strong
The Mexican peso stabilized at 18.76 per USD, near its August 2024 high of 18.74 seen on July 1st, as the US dollar remained subdued while investors digested stronger external receipts and a supportive domestic monetary policy backdrop. The dollar’s decline accelerated after a surprise 33,000-job loss in June’s ADP report fueled Fed rate-cut repricing. At the same time, Mexico posted a $1.03 billion trade surplus in May driven by a 1.8% rise in non-oil exports despite a 35% collapse in oil shipments, while remittance inflows hit a record $5.5 billion. Those inflows, coupled with the central bank’s June 26th decision to trim its key rate by 50 basis points to 8%, while signaling further cuts only as inflation recedes, bolstered confidence in the peso and kept an attractive real interest rate. Domestic labor metrics remain robust, with unemployment at just 2.7%, and although the manufacturing PMI eased to 46.3 in June, it still outperformed most of Latin America.
DAX Ends on Higher Note
Frankfurt's DAX rose about 0.5% to finish at 23,790 after a choppy session on Wednesday, halting a two-day losing run, amid growing expectations of a positive outcome in high-stakes trade talks. President Donald Trump said the US has struck a trade deal with Vietnam, the second since suspending the steep "Liberation Day" tariffs, following an agreement with the UK and a framework with China. Meanwhile, US-EU trade talks continue, with the US reportedly pushing a 10% tariff and the EU seeking exemptions for sectors like alcohol, aircraft, pharma, and semiconductors. Meanwhile, ECB officials at the Sintra Summit expressed rising worries that the euro’s strength could weigh on inflation. Auto stocks led gains after UBS boosted price targets and earnings estimates for several European names, pointing to milder U.S. tariff effects and improved global vehicle output.
US 10-Year Yield Rebounds
The yield on the 10-year US Treasury note rebounded to 4.3% from the two-month low of 4.2% yesterday as markets assessed how the latest economic policy may impact the Fed's rate outlook. President Trump announced a deal setting 20% tariffs on Vietnam, doubling those imposed on the Liberation Day reprieve from April 9th, to raise concerns on whether the disinflationary momentum in the US will be sustained. Also, the Senate approved Trump's $3.3 trillion deficit spending tax bill. Still, the ADP report showed that 33K jobs were shed in June, the first decline in over two years and contrasting with forecasts of a 110K gain to consolidate the view that the labor market may be more responsive to economic uncertainty, tariffs, and the prolonged period of restrictive interest rates. In the meantime, the Senate narrowly approved Trump’s tax-and-spending bill, projected to add $3.3 trillion to the national debt, sending the measure back to the House for final approval.
UK Stocks Fall on Reeves Speculation
The FTSE 100 fell on Wednesday as UK markets were rattled by political uncertainty surrounding Chancellor Rachel Reeves. Speculation about her future intensified after Prime Minister Keir Starmer failed to firmly back her during Prime Minister’s Questions, triggering a sharp rise in gilt yields—the largest since April—and a steep drop in the pound. Though Starmer later expressed support, the damage was done. The resulting sell-off hit rate-sensitive sectors hard, with homebuilders, real estate firms, and banks leading the declines. Berkeley fell over 8%, Persimmon over 6%, while Marks & Spencer, Barratt Redrow, and Land Securities dropped more than 5%. Lloyds Banking lost over 3%, and Barclays more than 1%. Rising bond yields and reduced bets on Bank of England rate cuts further pressured these sectors. On the upside, miners outperformed as Rio Tinto, Glencore, and Anglo American rose between 2.5% and 5.2%, offering some support to the broader index.
Bonds Update: United Kingdom 10Y Bond Yield Gains by 15 bps
Government bonds yields are higher on Wednesday. Top gainers are United Kingdom 10Y (14.71bps).
S&P 500 Hits Record Amid Tech Rally, Trade Deal Boost
US stocks were mostly higher on Wednesday as markets assessed fresh economic data, trade deals, and corporate developments. The S&P 500 rose 0.3% to a new record, while the Nasdaq 100 added 0.6% and the Dow was flat. President Trump announced a trade deal that will tariff Vietnam at 20% instead of the 46% tariff from "Liberation Day". Still, reports of stalled negotiations with Japan and a pending deal with the EU maintained uncertainty ahead of next week's resumption of aggressive tariffs. In the meantime, data from the ADP showed an unexpected decline in private sector jobs, adding to evidence of a softening labor market ahead of tomorrow's jobs report. On the fiscal front, markets await the lower House's rule on the spending bill passed by the Senate, which adds $3.3 trillion to US debt. Tech rebounded from yesterday's slump, while Microsoft was flat after announcing it will cut 9 thousand jobs. In turn, Nike and Lululemon surged after higher Vietnam tariffs were averted.
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