Market Outlook
Last Updated: 11 Jul 25 5 min read
After copper, Brazil came in the White House firing line as the US administration threatened to impose 50% tariffs on the country, citing the poor treatment of former president Jair Bolsonaro by the current Brazilian leader Lula da Silva. Bolsonaro has similar political views to Trump and this event highlights the unpredictable nature of Trump’s trade agenda, which can include anything which irks the President. Brazil responded with a pledge of reciprocity on US trade, which led to a large slump in the Brazilian Real versus the US dollar, falling by 3%.
Closer to home, the UK economy contracted for a second month in a row, falling by 0.1% for the month of May after already falling by 0.3% the month before. The numbers leave the economy at risk of stagnating and make the job of the Prime Minister and Chancellor even more politically difficult after the recent negative news headlines. Although the numbers are disappointing, weaker growth may have been expected after the very strong growth experienced the prior quarter, while Chancellor Reeves was quoted as being “determined to kickstart economic growth”.
Chinese inflation numbers showed prices increasing by 0.1% for the year to June, marking the first rise in prices since the beginning of the year. Policy measures to help revive the economy are possibly showing early signs of a assisting a tentative recovery, although data is still mixed with declining producer prices painting a weaker picture. Second quarter earnings season is about to begin, where results will be keenly dissected to determine what companies have experienced after the first full quarter of Trump trade policies and whether they have been able maintain margins and investment plans or have begun to retrench.
The economic environment has remained resilient, but rising geopolitical tensions and trade uncertainty may begin to weigh on sentiment. The recent Israel-Iranian de-escalation has eased this somewhat, but risk remains high, while delayed tariff deadlines have slowed their rollout. This delay has offered a temporary reprieve for policymakers and trade partners, but markets remain sensitive to further developments.
Equities |
1 Week |
YTD |
1 Year |
|---|---|---|---|
S&P 500 |
0.04% |
7.54% |
13.97% |
FTSE 100 |
1.78% |
12.25% |
13.26% |
Euro Stoxx 50 |
2.26% |
12.65% |
11.31% |
MSCI Asia Pacific ex Japan |
0.33% |
15.10% |
12.64% |
MSCI China |
0.58% |
17.70% |
31.20% |
Source: Bloomberg as at 08:43am on 11.07.2025
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