Global stock markets started the week on a high note as investors cheered progress in multiple trade negotiations, a further decline in oil prices, and continued strength in mega-cap equities. With optimism spreading, the S&P 500 futures rose 0.4% to a new record, and major Asian and European indices followed suit.

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Trade Talks Unclog: Canada, India, Taiwan in Focus

The most significant breakthrough came as Canada agreed to rescind its digital services tax, satisfying a major demand by US President Donald Trump and unblocking stalled trade talks. Prime Minister Mark Carney and Trump agreed to resume negotiations, setting a new July 21 deadline—an extension of Trump’s previous July 9 target.

India also extended its delegation’s stay in Washington as both sides push to finalize a deal ahead of July 9. Taiwan, too, reported “constructive progress” in its second round of trade talks with the US.

Meanwhile, Japan’s top negotiator extended his US trip, helping the Nikkei 225 jump 1.5%, while the Canadian dollar strengthened following its policy reversal. The upbeat trade developments have fueled what analysts call a “nirvana environment” for risky assets, where geopolitical headwinds are fading, and sentiment is improving.

“The momentum and trends seen in risky markets portray an almost nirvana environment,” wrote Chris Weston, head of research at Pepperstone Group.

Trump’s $4.5 Trillion Tax Plan Hits Senate Gridlock

While trade optimism runs high, Trump’s $4.5 trillion tax-and-spending bill is facing significant resistance in the Senate. Democrats are delaying proceedings by forcing clerks to read all 940 pages aloud—making them, ironically, the only ones familiar with its details.

The Congressional Budget Office estimates the bill would add $3.3 trillion to the national debt over a decade, triggering concerns about foreign appetite for US Treasuries. Meanwhile, the deadline for the bill, originally July 4, now appears unlikely to be met.

Dollar Slides as Rate Cut Bets Build

Amid policy and trade uncertainty, the US dollar is on the back foot. The Bloomberg Dollar Spot Index fell 0.2%, extending what’s now the worst start to a year for the dollar since at least 2005.

According to Capital Economics, the dollar’s year-to-date slide has surpassed any year since the US moved to a free-floating exchange rate in 1973.

Markets are now pricing in 65 basis points of rate cuts from the Federal Reserve for the rest of the year. A rate cut in July is still considered unlikely but could become plausible if Thursday’s payrolls report surprises to the downside—especially if the unemployment rate rises above 4.3%, a level not seen since 2021.

Global Market Snapshot (as of June 30, 2025)

Stocks

  • S&P 500 futures: +0.4% (new record)
  • Euro Stoxx 50 futures: +0.3%
  • Nikkei 225 (Japan): +1.5%
  • Topix (Japan): +0.7%
  • S&P/ASX 200 (Australia): +0.6%
  • Hang Seng (Hong Kong): -0.4%
  • Shanghai Composite (China): +0.2%

Currencies

  • Bloomberg Dollar Index: -0.2%
  • Euro: Flat at $1.1714
  • Japanese Yen: +0.4% to 144.14 per dollar
  • Offshore Yuan: +0.1% to 7.1637 per dollar

Cryptocurrencies

  • Bitcoin: +1% to $108,481.51
  • Ether: +2.9% to $2,503.12

Bonds

  • US 10-Year Yield: +1 bps to 4.29%
  • Japan 10-Year Yield: +2 bps to 1.445%
  • Australia 10-Year Yield: +5 bps to 4.18%

Commodities

  • WTI Crude Oil: -0.5% to $65.20/barrel
  • Gold (spot): +0.1% to $3,278.07/oz

Looking Ahead

  • European Central Bank Forum in Sintra kicks off, with potential commentary on EU monetary policy.
  • German and Italian CPI data due, which could shape ECB rate expectations.
  • Fed officials Bostic and Goolsbee will speak, possibly offering clues on the central bank’s inflation outlook.

Markets are basking in a wave of optimism as trade talks resume, tariff fears fade, and rate cut hopes remain alive. But between Trump’s stalled tax plan, a weakening dollar, and still-fragile geopolitics, traders may want to enjoy the sunshine—but pack an umbrella.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

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