Global financial markets are navigating a complex landscape marked by evolving geopolitical dynamics, fresh economic data from Europe, and significant policy adjustments in China. A notable report from the Financial Times indicates that former U.S. President Donald Trump reportedly inquired with Ukrainian President Volodymyr Zelenskyy about Ukraine's capability to strike Moscow. This comes as Russia has largely dismissed Trump's recent "theatrical ultimatum" regarding potential sanctions on Russian exports unless a peace deal in Ukraine is reached within 50 days, with a senior Russian security official stating Moscow "didn't care" about the threat. Meanwhile, the Dutch Foreign Minister expressed satisfaction with the U.S. willingness to send advanced defense equipment to Ukraine.
In the Middle East, EU Aid Chief Hadja Lahbib stated that Israel is not fully implementing the Gaza agreement, acknowledging some progress but deeming it insufficient. Lahbib has previously condemned humanitarian violations in Gaza and the West Bank, calling for full and unhindered humanitarian access and stressing the need for a ceasefire.
European Economic Indicators Show Mixed Signals
The Eurozone saw a positive surprise in industrial production for May, with a month-over-month increase of 1.7%, significantly exceeding the estimated 1.0% and reversing a revised -2.2% decline from the previous month. Annually, industrial production surged by 3.7%, well above the 2.2% estimate and the prior 0.2%. This jump was largely driven by a 3.7% increase in energy production, alongside good increases in capital goods (+2.7%) and non-durable consumer goods (+8.5%).
However, sentiment surveys presented a more nuanced picture. The Eurozone ZEW Survey Expectations for July slightly improved to 36.1 from 35.3, though it missed the estimated 37.8. In Germany, the ZEW Survey Expectations for July rose to 52.7, surpassing both the estimate of 50.4 and the previous month's 47.5. The German Survey Current Situation also showed improvement, moving to -59.5 from -72.0, better than the estimated -66.0. Despite ongoing global trade uncertainties, nearly two-thirds of experts anticipate an improvement in the German economy.
Italy's general government debt for May decreased slightly to EUR 3.054 trillion from EUR 3.064 trillion. However, the nation's public debt-to-GDP ratio is projected to rise to 137.00% by the end of 2025 and continue increasing to 138.20% in 2026, according to Trading Economics models.
China's Economic Adjustments and Export Controls
China is implementing price cuts for both diesel and gasoline, reducing diesel by 125 yuan per ton and gasoline by 130 yuan per ton, effective from Wednesday. This move is aimed at strengthening competitiveness amid falling spot LNG prices and abundant domestic supply.
In a significant policy shift, China's Commerce Ministry has updated its export control list to include battery technology and has changed rules for extracting gallium metal technologies. These measures reflect China's strategic efforts to maintain its competitive edge in critical minerals and advanced technologies, particularly in the face of ongoing trade tensions. China holds a dominant global share in cathode materials and gallium.
Regarding coal, China Coal's (1898.HK) June sales volume decreased by 11.2% year-over-year to 21.65 million tons. This decline comes even as China's June coal imports rose due to heatwaves boosting electricity demand. However, overall June coal imports fell to a more than two-year low, down 26% from a year earlier, as domestic production ramped up to replace lower-grade imports.
Corporate News: Nissan and xAI
Nissan (7201.T) CEO Makoto Uchida stated that there would be no further actions in vehicle restructuring in Japan. The company is reportedly looking at potential resale of assets but is not engaging in any joint ventures or contract manufacturing discussions with external parties.
In the AI sector, xAI announced that recent issues with its Grok 4 chatbot, which had generated offensive content, have been investigated and mitigated. Grok 4, launched by Elon Musk's xAI, boasts enhanced capabilities and aims to disrupt the AI sector, though it has also faced controversies regarding its "unfiltered" approach.
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.