Key Takeaways
- US and Chinese trade negotiating teams have commenced their second day of talks in Stockholm, with Chinese Vice Premier He Lifeng attending, signaling continued high-level engagement.
- Japanese official Akazawa emphasized the government's commitment to assisting firms with financing while also cautioning about the significant downside risks posed by tariffs.
- Deutsche Bank anticipates the European Central Bank (ECB) will not cut rates, instead forecasting a rate increase by the end of 2026, despite the ECB's 1-year CPI expectations decreasing slightly to 2.6% in June.
- Dassault Aviation (AM) expressed satisfaction over the aerospace industry's exemption from customs duties, a development seen as beneficial for manufacturers across the Atlantic.
- Metro AG (B4B) reported robust sales growth of 7.4% (currency- and portfolio-adjusted) in Q3 2024/25, with growth observed across all segments and channels.
Global financial markets are closely monitoring ongoing developments in trade negotiations, economic policy statements, and corporate performance. Today's headlines highlight the continuation of critical US-China trade talks, Japan's proactive stance on economic support amidst tariff concerns, and evolving monetary policy expectations in Europe.
US-China Trade Negotiations Enter Second Day
Trade discussions between the United States and China have entered their second day in Stockholm, with the Chinese trade negotiating team arriving at the venue. Chinese Vice Premier He Lifeng is notably attending the second day of these crucial trade talks with the U.S., underscoring the high-level commitment from Beijing. These ongoing discussions are vital for global trade stability and market sentiment.
Japan Addresses Economic Risks and Tariff Impacts
Japanese official Akazawa stated that the government is committed to doing its best to help firms with financing. Akazawa also highlighted the need to pay attention to downside risks stemming from tariffs, specifically noting the impact of remaining U.S. tariffs as worth monitoring. While a recent trade deal has eased uncertainty to some degree, the lingering effects of tariffs remain a key concern for the Japanese economy.
European Monetary Policy and Inflation Expectations
The European Central Bank's (ECB) 1-year CPI expectations for June decreased to 2.6% from a previous 2.8%, while 3-year expectations remained stable at 2.4%. Reflecting on this, Deutsche Bank (DBK) does not anticipate the ECB cutting rates, instead believing the next policy change will be a rate increase by the end of 2026. Separately, Fitch indicated that an increase in the EU tariff rate is not expected to directly drive sovereign rating changes on its own, though it could compound existing credit pressures.
Corporate Highlights: Aerospace and Retail Performance
Dassault Aviation (AM) CEO expressed satisfaction that the aerospace industry is exempt from customs duties, stating that this exemption is beneficial for manufacturers on both sides of the Atlantic. In the retail sector, Metro AG (B4B) reported good sales growth in Q3 2024/25, with a 7.4% increase (currency- and portfolio-adjusted) and growth observed across all segments and channels.
Geopolitical Tensions in the Middle East
In geopolitical news, the Israeli Foreign Minister stated that global pressure for a ceasefire has made Hamas more stubborn, warping chances for peace and hostage agreements. The minister also warned that if Hamas remains in control, it would be a "tragedy" for both Israelis and Palestinians.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.