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So much for that. CAD down sharply.

Trump’s message:

We have just been informed that Canada, a very difficult Country to
TRADE with, including the fact that they have charged our Farmers as
much as 400% Tariffs, for years, on Dairy Products, has just announced
that they are putting a Digital Services Tax on our American Technology
Companies, which is a direct and blatant attack on our Country. They are
obviously copying the European Union, which has done the same thing,
and is currently under discussion with us, also. Based on this egregious
Tax, we are hereby terminating ALL discussions on Trade with Canada,
effective immediately. We will let Canada know the Tariff that they will
be paying to do business with the United States of America within the
next seven day period. Thank you for your attention to this matter!

Canada and the US had laid out at the start of last week a 30-day period to make a deal.

I imagine this is all theatre as Trump lays the groundwork for a deal. Canada is obviously prepared to drop this tax if the US drops tariffs.

This article was written by Adam Button at www.forexlive.com.

Trump — evidently — is so offended that Iran’s supreme leader didn’t say ‘thank you’ to Trump and instead claimed he won the war that he’s “immediately dropped all work on sanction relief, and more”.

Here is Trump’s post:

Why would the so-called “Supreme Leader,” Ayatollah Ali Khamenei, of the
war torn Country of Iran, say so blatantly and foolishly that he won
the War with Israel, when he knows his statement is a lie, it is not so.
As a man of great faith, he is not supposed to lie. His Country was
decimated, his three evil Nuclear Sites were OBLITERATED, and I knew
EXACTLY where he was sheltered, and would not let Israel, or the U.S.
Armed Forces, by far the Greatest and Most Powerful in the World,
terminate his life. I SAVED HIM FROM A VERY UGLY AND IGNOMINIOUS DEATH,
and he does not have to say, “THANK YOU, PRESIDENT TRUMP!” In fact, in
the final act of the War, I demanded that Israel bring back a very large
group of planes, which were heading directly to Tehran, looking for a
big day, perhaps the final knockout! Tremendous damage would have
ensued, and many Iranians would have been killed. It was going to be the
biggest attack of the War, by far. During the last few days, I was
working on the possible removal of sanctions, and other things, which
would have given a much better chance to Iran at a full, fast, and
complete recovery – The sanctions are BITING! But no, instead I get hit
with a statement of anger, hatred, and disgust, and immediately dropped
all work on sanction relief, and more. Iran has to get back into the
World Order flow, or things will only get worse for them. They are
always so angry, hostile, and unhappy, and look at what it has gotten
them – A burned out, blown up Country, with no future, a decimated
Military, a horrible Economy, and DEATH all around them. They have no
hope, and it will only get worse! I wish the leadership of Iran would
realize that you often get more with HONEY than you do with VINEGAR.
PEACE!!!

No wonder other world leaders are always so careful to flatter Trump’s ego.

I guess this is bullish oil.

This article was written by Adam Button at www.forexlive.com.

Baker Hughes data:

• Oil rigs -6 to 432
• Nat gas rigs -2 to 109

WTI crude oil is trading down 11 cents to $67.65.

This article was written by Adam Button at www.forexlive.com.

The S&P 500 is up 45 points to a fresh record at 6185.

It’s bee a great week for stock markets following the Iran-Israel war and the S&P 500 is up 3.6% WTD. The market isn’t rattled by Trump trade comments as it’s concluded that tariffs won’t be overly inflationary and that other countries aren’t likely to retaliate.

Technically, a close anywhere above 6147 — which was the Feb high — is bullish and the higher the better. Next week is holiday-shortened by July 4 and the turn of the quarter could have some impacts. Beyond that, we will have to wait for meaningful economic data or comments on demand from corporates.

This article was written by Adam Button at www.forexlive.com.

• We want full trade barrier dropping with India
• At a certain point over the next week we will send out letters to countries to tell them what they have to pay
• Would be great if Powell lowers rates
• Some countries will be disappointed on trade because they will have to pay tariffs
• Iran wants to meet

On we go.

This article was written by Adam Button at www.forexlive.com.

OPEC+ is meeting July 6 and I would have assumed the baseline in the market was for another large 411K output hike but oil dipped after Bloomberg reporting that OPEC is set to weigh another ‘super-sized’ oil output increase.

For me, this isn’t a surprise at all and it would be something of a shock if they don’t add 411K bpd. I’d assume the same next month while it’s the meeting after that where it could change, depending on oil prices/inventories.

This article was written by Adam Button at www.forexlive.com.

Yesterday’s US advance goods trade balance report showed continued softness and that’s been incorporated into the latest GDPNow estimate along with softer consumption in the PCE data. That has it down to 2.9% from 3.4%. It’s steadily grinded lower in the past month but we’re still more than a month away from the first Q2 estimate.

From the Atlanta Fed:

“After recent releases from the US Census Bureau and the US Bureau of Economic Analysis, an increase in the nowcast of the contribution of net exports to second-quarter real GDP growth from 2.07 percentage points to 3.49 percentage points was more than offset by a decrease in the nowcasted GDP growth contribution of inventory investment from -0.42 percentage points to -2.22 percentage points.”

This article was written by Adam Button at www.forexlive.com.

Keep in mind that with Trump, a 11:30 pm ‘schedule’ is a rough timeline at best.

This article was written by Adam Button at www.forexlive.com.

The May annualized trimmed mean reading of PCE inflation from the Dallas was 2.0%, down from 2.7% in April.

This article was written by Adam Button at www.forexlive.com.

US Treasury Secretary Scott Bessent said something interesting on trade on Fox Business today:

“If we can ink 10 or 12 of the important 18 — there are another important 20 relationships — then I think we could have trade wrapped up by Labor Day,” Bessent said

Labor Day falls on September 1 this year.

Now this might be fanciful as the ’90 days in 90 days’ post-Liberation Day plan has completely fallen apart. The US has already laid the groundwork for punting on the July 9 ‘deadline’ as well.

That’s not to say all the deals will be papered and completed but we could at least have an idea on tariff levels without any big risk of surprise. That would certainly be positive for markets even if I find it hard to believe that Trump would ever stop threatening tariffs.

A separate report from Fox Business’ Charlie Gasparino today also indicated that trade deals were near, though he cautioned that had been reported many times before.

It’s also worth flagging that trade remains a big risk and deals or negotiations could blow up with retaliation from partners, particularly on steel and autos.

This article was written by Adam Button at www.forexlive.com.

• May prelim was 60.5
• Final April reading was 52.2
• Current conditions 64.8 vs 63.7 prelim
• Expectations 58.1 vs 58.4 prelim
• One -year inflation 5.0% vs 5.1 prelim
• Five-year inflation 4.0% vs 4.1% prelim

Sentiment has rebounded from the April-May lows but still remains far below the levels from late 2024. The market reaction to the report has been minimal.

This article was written by Adam Button at www.forexlive.com.

The S&P 500 has hit a record high for the first time since February and the Nasdaq hit a record high for the first time since December.

It’s been a remarkable comeback for the Nasdaq since April and if we can close at new highs, there are blue skies above.

The interesting one to watch next is the Russell 2000, which still needs to rally 13.5% to get back to October levels. It’s was up a hefty 1.7% yesterday.

This article was written by Adam Button at www.forexlive.com.