TL;DR

US hikes tariffs on Canada and Brazil; Bitcoin surges on ETF inflows; gold rallies on trade risk.

Highlights

• US to impose 35% tariff on all Canadian imports from Aug. 1; Canadian dollar drops, USMCA stability questioned 1.
• US enacts 50% tariff on all Brazilian imports; Brazil threatens reciprocal duties, commodity markets react 2.
• PBOC advisers urge 1.5 trillion yuan ($209B) stimulus to offset US tariffs and weak demand in China 3.
• European Commission proposes floating price cap on Russian oil amid G7 split; Russian LNG exports to EU fall 22% YoY 4.
• OPEC+ denies talks of pausing planned oil output increases, maintaining current supply plan 5.
• Houthi attacks sink two Greek ships in Red Sea, doubling insurance premiums and raising shipping risks 6.
• UK GDP contracts 0.1% in May, extending two-month decline; BoE rate cut expectations rise 7.
• Bitcoin hits $118,000 on $2.4B short squeeze; US spot Bitcoin ETFs see $1.2B inflows; Ethereum ETFs also attract strong demand 89.
• US Treasury drops crypto broker reporting rules; Shanghai regulator studies stablecoin policy, signaling possible shift in China 1211.
• Gold climbs to $3,337/oz as haven demand rises on trade tensions and Fed rate cut expectations 10.
• ECB’s Schnabel signals little prospect of further rate cuts; DAX reaches record high on soft inflation 1314.
• China finds BYD and Chery wrongly took $53M in EV subsidies, adding pressure to the sector 15.

Commentary

Trade policy is the primary driver today, with the US escalating tariffs against Canada (35%) 1 and Brazil (50%) 2, and signaling broader tariffs for other partners. The Canadian dollar weakened on the announcement 1, and Brazil’s threat of reciprocal duties has rattled commodity markets, particularly coffee and orange juice 2. These moves risk renewed supply chain disruptions and put the stability of the USMCA under scrutiny, with potential spillover to North American equities, FX, and commodities 12.

China faces mounting pressure from earlier US tariffs, prompting PBOC advisers to call for a significant stimulus package 3. While a Trump–Xi summit is described as likely by US officials, no date is set, and trade frictions remain elevated 19. Meanwhile, the regulatory environment for digital assets is shifting: the US Treasury’s rollback of crypto broker reporting rules 12 and Shanghai’s review of stablecoin policies 11 have supported strong inflows into crypto ETFs and contributed to Bitcoin ’s surge above $118,000 89.

Energy markets remain volatile. OPEC+ is maintaining its output increase schedule 5, while the EU’s proposal for a floating Russian oil price cap and renewed Houthi attacks in the Red Sea are pushing up shipping costs and insurance premiums 46. These developments are likely to keep energy and freight prices firm, supporting gold ’s rally as investors hedge against geopolitical and economic risks 10.

European equities are buoyed by soft inflation and ECB signals that further rate cuts are unlikely, with the DAX reaching new highs 1314. In contrast, the UK’s two-month GDP contraction is fueling expectations of a BoE rate cut and keeping the pound under pressure 7. In China, the clampdown on improper EV subsidies adds further stress to an already competitive auto sector 15.

Traders should monitor further tariff developments, central bank signals, and ongoing volatility in commodities and crypto. Defensive positioning in gold and selective exposure to European equities may be prudent amid rising global trade and geopolitical risks.