Global equity markets kicked off the week on a cautious note as investors grow increasingly anxious over the July 9 deadline for a potential reintroduction of sweeping U.S. trade tariffs. Simultaneously, the U.S. dollar continues its downward slide, while safe-haven assets like gold and the Japanese yen attract inflows.
Equities: Risk Appetite Erodes Globally
Stock markets in both Asia and Europe posted losses on Monday, reversing some of the gains from the second quarter:
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South Korea’s KOSPI: down 1.8%, pressured by tech-sector outflows
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Taiwan’s TAIEX: fell 0.9%, dragged by semiconductor giants
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Germany’s DAX: dropped 0.7% amid weakness in autos and chemicals
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France’s CAC 40: declined 0.6%, led by retail and construction stocks
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UK’s FTSE 100: fell 0.5%, weighed by energy and mining sectors
Although the U.S. markets were closed for Independence Day, futures trading suggested a risk-off tone for Wall Street’s Tuesday open.
Currencies: Dollar Slides as Safe Havens Outperform
The U.S. dollar index (DXY) continues to weaken, having now dropped nearly 11% year-to-date, with Monday extending the slide:
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EUR/USD: climbed to 1.0995, nearing key resistance
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GBP/USD: rose to 1.2753 after a surprise uptick in UK construction PMI
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USD/JPY: fell to 143.60, reflecting yen demand as risk sentiment soured
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AUD/USD: gained 0.4%, supported by resilient commodity demand
The Swiss franc and Japanese yen posted the strongest performance among G10 currencies, consistent with safe-haven inflows.
Commodities: Gold Steady, Oil Drifts Lower
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Gold: held firm at $3,350/oz, reflecting global unease
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Oil: softened slightly ahead of OPEC+ production decisions
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Copper: down 1.6%, echoing broader risk aversion
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Bitcoin: slipped 0.8%, with crypto markets mirroring equity sentiment
Key Drivers of Market Sentiment
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Tariff Uncertainty: With former President Trump signaling tariff actions as early as August 1, investors are bracing for retaliatory trade measures and price shocks.
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Central Bank Caution: Traders are also weighing upcoming Federal Reserve and ECB meetings, where dovish tones are expected amid economic softening.
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China Growth Concerns: Weak industrial output and tepid consumer data from China continue to weigh on emerging markets and commodity-linked stocks.
Analyst Outlook
“Market participants are being forced to price in tail risks around geopolitics and trade again,” said one senior strategist. “That’s leading to a flight to quality assets like gold and yen, while equities and the dollar face headwinds.”
Conclusion
As the July 9 tariff deadline looms and macro clouds darken, global markets are displaying increasing signs of stress. With equities pulling back, the dollar sliding, and safe-havens in demand, traders should expect a volatile, reactive environment in the days ahead.
ForexFlash will continue delivering fast, focused coverage of cross-asset market reactions as this high-risk week unfolds.
