Morning wrap (07.04.2025)

Wall Street ended yesterday’s shortened session with strong gains following the release of unexpectedly optimistic labor market data (S&P 500: +0.83%; Nasdaq: +1.02%; Dow Jones: +0.77%; Russell 2000: +1.02%). Today, due to Independence Day, Wall Street will remain closed.

The U.S. House of Representatives passed Donald Trump’s “Big Beautiful” fiscal bill by a narrow margin of four votes (218 to 214). The vote followed a 9-hour speech by House Democratic leader Hakeem Jeffries, who mainly criticized the bill’s impact on lower-income segments of society. The bill is set to reach the president’s desk at 10:00 PM BST time.

Just days before the official end of trade negotiations, Donald Trump has ramped up his trade rhetoric again, announcing he will send letters to countries that will “start paying to do business in the U.S.” Treasury Secretary Scott Bessent stated that a “flare of trade deals” will be unveiled after July 9, adding that around 100 countries will face at least a 10% tariff rate.

According to Bessent, “if the euro hits $1.20, Europeans will be squawking”.

In the Asia-Pacific region, the sentiment remains mixed, dampened by ongoing trade concerns. Gains are being recorded in Japan’s Nikkei 225 (+0.1%), Shanghai SE Composite (+0.9%), China’s HSCEI (+0.1%), and India’s Nifty 50 (+0.05%). Australia’s S&P/ASX 200 is flat, while South Korea’s Kospi is down 1.6%.

Chinese solar energy and brain tech diagnostics companies are outperforming, driven by newly announced government support for these sectors.

Household spending in Japan rose in May above expectations, reaching +4.2% y/y (forecast: 1.2%, previous: -0.1%).

In the forex market, the U.S. dollar erased half of yesterday’s gains as trade tensions resurfaced (USD Index: -0.3%). Safe-haven currencies are rebounding (USDCHF: -0.3%, USDJPY: -0.4%, EURUSD: +0.2%). The British pound extends its gains (GBPUSD: +0.15%), and Antipodean currencies and the Canadian dollar are trading slightly above flat.

Amid dollar weakness, gold is also gaining (+0.41% to $3,339), while silver remains unchanged.

Brent and WTI crude are down 0.2% and 0.05%, respectively (Brent at $68.65 per barrel), while natural gas futures are continuing to decline (-0.2%).

Bitcoin is down 0.75% to $109,160, and Ethereum falls 0.9% to $2,577.