11/07/2025 Daily Reports
U.S. President Donald Trump reignited trade tensions late Friday by announcing fresh tariffs on Canadian goods and signaling similar actions toward the European Union. In a televised statement, Trump revealed that letters would be sent to several countries outlining increased tariff measures. Shortly after, he published the Canadian letter online, stating a 35% duty on all imports from Canada would begin August 1—an abrupt jump from the current 10% baseline. Markets initially reacted with caution, though a White House official later clarified that goods under the USMCA would likely be exempt, offering some relief.
Investor anxiety remains elevated as Trump hinted at broader tariff hikes of up to 20% on countries that do not receive exemption letters. With the European Union next in line, concerns are rising that ongoing trade discussions may be stalling. Meanwhile, the weakening yen reflects diminishing hopes for a U.S.-Japan deal. With few major data releases scheduled, market attention now turns to next week’s U.S. earnings season for early signs of tariff-driven pressure on corporate performance.
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Global Equity Flows Continue Unabated Amidst Tariff Uncertainty; Investors Bet on Trump’s U-Turn as Auto Industry Waits for Trade Deal; Oil Trades on Geopolitical Mania
• Global equity funds once again witnessed inflows for the second consecutive week as of July 9 due to predominantly an increase in AI stocks and defensive hopes that the postponement of US tariff rollouts to August 1 might provide room for negotiations. $10.21 billion were pumped into global equity funds, though this was a significant drop from the previous week’s strong inflows. European equity funds were particularly popular.
• Despite President Trump’s continued threats of deep tariffs (15%-20% across-the-board tariffs to 50% on some imports, like copper, and fresh tariffs on Japan, South Korea, Canada, and Brazil), and a looming August 1 deadline for their application, mood remains generally upbeat in the market. This is largely because investors still believe that Trump will ultimately “U-turn” or use these threats as leverage, as he has done before. Trump, however, views the rallying share market as supporting his tariff policies.
• Oil prices increased with traders weighing an expected “major statement” by Trump on Russia and news of increased crude output by Saudi Arabia. BMW chief executive was meanwhile hopeful that there would be a “manageable” car import tariff agreement between the EU and the US, while Europe is awaiting news on potential tariff rates from the US administration.
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