Published Date 7/28/2025
The US and EU concluded their trade deal yesterday; both appeared to be pleased, 15% tariffs on most EU exports to the US; some products, including aircrafts and their components, some chemicals and pharmaceuticals, will not be subject to tariffs. The EU will be “purchasing hundreds of billions of dollars’ worth of military equipment,” and investing $600B in the US according to news reports. There has been no reaction to the deal in US financial markets as it was expected. In the meantime, a court case challenging whether the president has the authority to set reciprocal trade deals. Eventually the case will end up in the Supreme Court.
This is a huge week for potential market-moving news, the headline, the FOMC and Powell on Wednesday, followed by key inflation data on Thursday and July employment on Friday.
At 9:30 am the DJIA opened +20, NASDAQ +62, S&P +10. 10 year at 9:30 am 4.41% +2 bps. FNMA 6.0 30 year coupon at 9:30 am -10 bps from Friday’s close and +2 bps from 9:30 am Friday.
There is a lot of key data and news this week that presents the possibility of increased volatility. The Fed will not lower rates at the meeting but likely set the tone for a cut at the next meeting in September but that could blow up if inflation increases. Today two Treasury auctions, the recent demand has been solid. August 1st hits on Friday, key trade deals have been accomplished but once again the lower courts are tossing a wrench into whether the president has the authority to levy reciprocal trades.
This Week’s Economic Calendar:
Monday,
11:30 am $69B 2 year note auction
1 pm $70B 5 year note auction
Tuesday,
8:30 am US June preliminary trade deficit (-$99.0B from -$96.6B in May)
9 am May Case/Shiller home price index (year/year 20 city +3.4% down from 3.4% in April)
10 am July consumer confidence from the Conference Board(95.8 from 93.0 in June)
JOLTS June job openings (7.400 million from 7.769 million in May)
1 pm $44B 7 year note auction
Wednesday,
7 am weekly MBA mortgage applications
8:15 am July ADP private jobs (+80K from -33K in June)
8:30 am advance Q2 GDP (+2.5% from -0.5% in Q1)
10 am June pending home sales (+0.5% from +1.8% in May)
2 pm FOMC policy statement
2:30 pm Jerome Powell’s press conference
Thursday,
8:30 am weekly jobless claims (223K from 217K)
June PCE (personal consumption expenditures) overall month/month +0.3% from +0.1%, year/year +2.5% from 2.3%; core PCE m/m +0.3% from +0.2%, year/year +2.7% unch from May)
June personal income and spending (income month/month +0.3% from -0.4% in May; spending month/month +0.4% from +0.1%)
Q2 employment cost index (+0.8% Q/Q)
9:45 am July Chicago purchasing managers index (42.0 from 40.4)
Friday,
8:30 am July employment data (unemployment rate 4.2% from 4.1%, NFP jobs +102K from 147K, private jobs +94K from 74K, average hourly earnings +0.3% from +0.2%)
10 am July ISM manufacturing index (49.8 from 49.0)
July final University of Michigan consumer sentiment index (61.8 unch from two weeks ago)
Source: TBWS
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