Trump Targets Canada with 35% Tariff; Bitcoin Surges to Record Highs

Global Sentiment: Risk-on
Factors: Earnings Optimism, Trump Tariff

TODAY’S WATCHLIST
- UK May Trade Data
- FOMC Member Daly Speaks 

THE BIG STORY
President Donald Trump on Thursday dramatically escalated his global trade war, announcing a 35% tariff on Canadian imports starting August 1, warning Prime Minister Mark Carney that the rate could rise if Ottawa retaliates. The move follows a flurry of tariff announcements in recent day including steep levies on copper and blanket tariffs of up to 20% on other key trading partners like Japan and South Korea. In an NBC News interview, Trump made clear that no formal warning is necessary for countries yet to receive letters: “We’re just setting our tariffs… we’ll work that out now.”

As tensions deepened on the trade front, Bitcoin soared to fresh all-time highs, peaking at $116,046.44 late Thursday. The cryptocurrency rally has been driven by growing institutional interest and a wave of crypto-friendly policies from the Trump administration. Trump has recently signed an executive order to establish a strategic reserve of cryptocurrencies and appointed advocates like former SEC commissioner Paul Atkins and tech entrepreneur David Sacks to top regulatory and advisory roles. With geopolitical uncertainty rising and investor interest surging, the crypto market appears to be one of the few clear winners in an increasingly fractured global economy.

DATA
The number of Americans applying for new jobless benefits fell unexpectedly to a seven-week low, indicating employers are reluctant to lay off workers despite broader signs of a cooling labour market. Initial claims for state unemployment benefits dropped by 5,000 to a seasonally adjusted 227,000 in the week ending 5 July, marking the fourth consecutive weekly decline, according to the US Labour Department. The figure came in below economists’ expectations of 235,000 and included the July 4 holiday week, a period typically marked by data volatility. The continued drop in claims suggests a resilient job market, easing pressure on the Federal Reserve to resume interest rate cuts in the near term.

WHAT HAPPENED OVERNIGHT
US stocks indices closed at record highs on Thursday, lifted by a strong showing from tech and travel stocks, as investors looked past trade tensions and focused on earnings optimism. Nvidia’s market capitalisation ended above $4 trillion for the first time, cementing its position as the poster child of the AI boom. Meanwhile, travel shares soared after Delta Air Lines projected stronger-than-expected profits for the third quarter and full year, sending its stock up 12%. United Airlines surged 14.3%, and Hertz Global added 11.8% in the wake of the upbeat guidance. Markets are now turning their attention to the second-quarter earnings season, watching closely for signs of how companies are navigating the disruptive effects of President Trump’s escalating trade war, launched on 2 April. 

The yield on 10-year US Treasury note held at 4.35% on Thursday, stabilising after Wednesday’s sharp decline as investors weighed the inflationary implications of President Trump’s latest tariff moves. The decision to fast-track a 50% levy on copper imports and impose the same on Brazilian goods has stirred concerns over rising input costs across manufacturing. Bond markets also reacted to Trump’s renewed call for the Fed funds rate to be slashed by 300 basis points, fuelling chatter about a more dovish tilt in future Fed appointments and anchoring longer-term inflation expectations.

The US dollar index hovered near 97.5 on Thursday, showing little movement as markets remained focused on the latest tariff announcements and diverging views from the Federal Reserve. President Trump’s decision to impose a 50% tariff on Brazilian imports and confirm similar levies on copper added a layer of trade-driven uncertainty, though the greenback held steady. The euro traded around $1.17 still near a three-year high as hopes for a US-EU trade agreement gained traction, with EU officials suggesting a framework deal could be finalised within days.

Brent crude oil prices dropped sharply on Thursday, with Brent crude falling 2.21% to settle at $68.64 a barrel and US West Texas Intermediate sliding 2.65% to $66.57. The sell-off came as investors reassessed the potential drag on global growth from President Donald Trump's renewed tariff threats. Concerns that escalating trade tensions could dampen energy demand overshadowed recent signs of supply tightness and geopolitical risk, leaving the market firmly on the defensive.

Day’s Ledger
Economic Data

• UK May GDP Data
• UK May Industrial Production Data
• UK May Trade Data
• US IEA Monthly Report  
• US Baker Hughes Oil Rig Count

Corporate Actions

• Earnings: Aditya Birla Money, Avenue Supermarts, Elecon Engineering Co, Madhya Bharat Agro Products, Nath Bio-Genes (India), Sanginita Chemicals, and Superhouse
• Mahindra Logistics to consider fund raising
• Religare Enterprises to consider fund raising

Policy Events

• FOMC Member Daly Speaks 
• India Farm Minister Chouhan meeting

TICKERS

• AEGIS LOGISTICS to sell Pipavav LPG terminal to associate firm Aegis Vopak for ₹4.3 billion via slump sale on going concern basis.
• ANAND RATHI WEALTH June quarter net profit rises 28% YoY to ₹936.2 mln; revenue from operations grows 15% to ₹2.74 billion.
• GLENMARK arm signs $700-mln licensing deal with AbbVie for cancer drug ISB 2001; eligible for up to $1.225 billion in milestones, royalties.
• HUL CEO Rohit Jawa resigns, to be succeeded by Priya Nair from Aug 1; Nair currently heads global beauty & wellbeing at Unilever.
• IREDA June quarter net profit drops 36% YoY to ₹2.47 billion on higher impairments; gross NPA ratio jumps to 4.13% from 2.45% in Mar quarter.
• JSW INFRASTRUCTURE gets committee of creditors' nod for NCR Rail Infra resolution plan; awaits NCLT approval for freight terminal asset in Khurja, UP.
• MPHASIS acquires 26% stake in US-based AI startup Aokah for $4 million to boost AI-led capabilities and build global delivery centres.
• PETRONET LNG signs ₹12-billion regasification deal with Deepak Fertilisers unit; contract runs 5.5 years starting 2026 with upside potential.
• PRESTIGE ESTATES issues ₹4.5 billion corporate guarantee for JV firm Thomsun Realtors' term loan from HSBC; classified as contingent liability.
• TATA ELXSI June quarter profit drops 16% QoQ to ₹1.44 billion on weak demand, macro headwinds; media and healthcare verticals drag revenue.
• TCS June quarter revenue down 1.6% QoQ—sharpest fall in 5 years—amid weak demand; profit up 4% to ₹127.60 billion, deal wins at $9.4 billion.
• ZEE ENTERTAINMENT shareholders reject ₹22.37 billion promoter warrant issue due to low support; only 60% voted in favour vs 75% needed.

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