UK
This week saw a mix of relief and caution. Insolvencies in England & Wales dropped 8% in June and 16% year‑on‑year – welcome news, but levels remain slightly elevated.
Meanwhile, the Bank of England’s Andrew Bailey flagged that if jobs falter, rate cuts could follow – contributing to a dip in gilt yields and the pound sliding to a three‑week low.
Regulatory winds are shifting, Barclays’ CEO welcomed deregulatory reforms designed to encourage consumer access to credit and more retail investment, and the FCA proposed easing listing rules – potentially saving firms £40m annually.
Geopolitically, the Northwood Declaration saw the UK and France pledge closer nuclear deterrent coordination on 10 July, while unprecedented hosepipe bans and drought alerts reflected the third heatwave of the summer across much of England.
US
Strong economic signals continued: jobless claims fell and June retail sales beat forecasts, pushing the S&P 500 and Nasdaq to record highs. Corporate earnings from Taiwan Semiconductor, GE Aerospace, PepsiCo, and United Airlines bolstered confidence.
But it wasn’t all sunshine. President Trump, in campaign mode, publicly pressured Fed Chair Jerome Powell to cut rates immediately – calling the Fed’s current policy “politically motivated” and “damaging to American growth.” This has revived debate over central bank independence. The Fed, for its part, has maintained that it remains data-dependent, but markets are watching the rhetoric closely.
However, trade tensions simmered: President Trump is preparing ~30% tariffs on EU imports while expanding duties to other nations – raising investor concerns. These threats hit European markets but left the US somewhat resilient.
Oil saw jittery swings: prices surged after drone strikes in Iraqi Kurdistan and tightened inventories, then edged down on concerns the trade skirmish could dent demand.
EU
The EU green‑lit its 18th sanctions package targeting Russia – cutting the oil price cap, tightening export controls, and banning over 100 ships linked to evasion. Discussions around the 2028 – 2034 EU budget continued, with divisions on tax and agriculture funding.
European equities rallied modestly, thanks to upbeat corporate earnings and optimism generated by the sanctions push. Yet, the threat of US tariffs dampened sentiment, particularly across German exporters.
China
China’s June trade data surprised slightly above expectations, and fresh optimism around trade with the US – boosted by Nvidia chip sales resuming – lifted risk appetite.
On the commodities front, copper rallied to its highest in over a week, driven by Chinese buying and hopes for a trade truce.
India
India remained on the periphery of global trade narratives: Boeing shares rose after investigations cleared the 787 Dreamliner post-crash. Meanwhile, Tata Steel’s new low‑emissions furnace project in the UK – securing 5,000 jobs – underscored India’s growing role in green industry partnerships.
Trade tensions echo in Asia broadly: US tariffs on several trading partners (e.g., South Korea, Japan) cloud the picture for growth.
Metals – Gold & Copper
Gold saw a mixed ride: earlier this week, safe‑haven buying pushed it to a three‑week high amid trade jitters, but stronger US data and dollar strength later weighed on futures. Still, the World Gold Council notes a solid mid‑year outlook – with prices up ~26% YTD, supported by geopolitical tension and central bank demand.
Copper blew higher – hitting one‑week highs (5,6095/t) on Chinese demand optimism and trade‑deal hope.
Oil
Crude futures ticked higher on Friday, capping a volatile week shaped by geopolitics, sanctions, and supply concerns. Brent rose 1% to $70.20, while WTI gained 1.2% to $68.35 per barrel. But the real fireworks were in gasoil: futures surged nearly 15% to a 17-month high, with the premium to Brent widening sharply to $27.27.
This spike came as the EU unveiled its 18th sanctions package against Russia – its toughest yet. The new measures cut the G7 price cap for Russian crude to $47.60, ban imports of any petroleum products derived from Russian oil, and even blacklist a major Rosneft-linked refinery in India. While exemptions exist for fuel produced in countries like the UK, U.S., Norway, and Switzerland, the policy is already roiling the diesel and jet fuel trade.
Analysts noted that India and Turkey have supplied nearly half a million barrels per day of refined Russian-sourced fuels to Europe this year. With those flows now potentially curtailed, low European inventories and a structural reliance on diesel imports have investors worried.
As Rystad’s Janiv Shah put it, “The market fears the loss of diesel supply into Europe, as India had been a source of barrels.”
On the US side, President Trump has threatened additional sanctions on buyers of Russian oil unless Moscow agrees to a peace deal within 50 days. Analysts flagged that while the U.S. hasn’t backed Europe’s new measures, the threat of unilateral American enforcement could spook markets further.
Meanwhile, oil flows from Iraqi Kurdistan remain disrupted, despite Baghdad saying exports would resume. No restart appears imminent, which is lending additional support to prices.
So, while spot oil markets are firming, the big story is the shift in refined products geopolitics – and the growing gap between supply reliability and sanctions enforcement. Watch this space.
Summary Take
- Risk-on tone: buoyed by stronger macro data and corporate earnings in the US and Europe.
- Trade flashpoints: US tariffs on EU and Asia, renegotiations with China, and broader trade uncertainty weigh.
- Geopolitical energy jitters: threats in the Middle East and oil incidents keep oil, copper, and gold markets on edge.
- UK tilt to growth: deregulatory moves, wage/price data, and evolving global partnerships shape domestic policy.
