MNI ASIA OPEN: Tariff Announcements & Deadline Extensions

Jul-07 20:08By: Bill Sokolis

APAC+ 4

EXECUTIVE SUMMARY

MNI TARIFFS: Pres Trump Announces 25% Japan Tariffs On Truth Social
MNI TARIFFS: Trump: Tariff Rates Of 25% On Malaysia, 30% On South Africa
MNI TARIFFS: White House Says 12 More Tariff Letters Today; Rtrs Says EU Won't Get
MNI: Zero Bound Remains A Medium‑Term Risk - Fed's Williams

MNI TARIFFS: Trump: Tariff Rates Of 25% On Malaysia, 30% On South Africa

Trump announces on Truth Social the following tariff rates to be imposed on Aug 1 (in similar letters to those seen sent earlier to Japan and South Korea). White House Press Secretary Leavitt announced earlier that there would be 12 letters sent today - this is 5 of those sent in a quick burst, implying 7 more to be announced later.

25% tariffs on Malaysia and Kazakhstan - had been announced at 24% / 27% respectively before tariff "pause"
30% on South Africa (USDZAR quickly rises 0.3%) - had been announced at 31% before tariff "pause"
40% on Laos and Myanmar - had been announced at 48% / 45% respectively before tariff "pause"

MNI TARIFFS: Pres Trump Announces 25% Japan Tariffs On Truth Social

From the President's Truth Social account in a letter addressed to the Japanese Prime Minister (key text): Starting on August 1, 2025, we will charge Japan a Tariff of only 25% on any and all Japanese products sent into the United States, separate from all Sectoral Tariffs. Goods transshipped to evade a higher Tariff will be subject to that higher Tariff...If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 25% that we charge.

MNI TARIFFS: White House Says 12 More Tariff Letters Today; Rtrs Says EU Won't Get

White House Press Secretary Leavitt says in today's briefing that there will be trade letters coming today for 12 more countries in addition to the Japan and South Korea letters already published (imposing 25% tariffs on both effective August 1). Additionally there will be more letters sent in the coming days, she says.

NEWS

MNI: Zero Bound Remains A Medium‑Term Risk - Fed's Williams

The risks that the Federal Reserve's policy rate will be pinned at the zero lower bound remains significant over the medium to long-term due to recent elevated uncertainty, according to a blog published Monday by the president of the Federal Reserve Bank of New York, John Williams, and two other Fed system economists. "Currently, seven-year-ahead ZLB risk is comparable to that observed in 2018, even though the expected interest rate level is higher. This reflects that uncertainty is higher today than it was in 2018," John Williams, Sophia Cho, and Thomas Mertens wrote.

MNI US-EU: German Gov't Spox: Merz Coordinating w/VdL, Meloni & Macron On Tariffs

Reuters reports comments from a German gov't spox stating that Chancellor Friedrich Merz is coordinating with European Commission President Ursula von der Leyen, Italian PM Giorgia Meloni, and French President Emmanuel Macron with regard to the situation vis-a-vis US tariffs. Adds that "time is money when it comes to tariff negotiations." Germany and France remain on different tracks in terms of response to US tariffs, with Berlin seeking a swift deal even if it is not perfect, while France has sought to avoid perceptions of EU 'weakness' at the risk of no agreement being reached.

MNI EUROZONE: Incumbent Donohoe Confirmed As Eurogroup President For Third Term

The Eurogroup meeting of eurozone finance ministers has formally re-elected incumbent president, Ireland's Finance Minister Paschal Donohoe, for a third two-and-a-half-year term. Earlier today, Spain's Carlos Cuerpo and Lithuania's Rimantas Sadzius both confirmed the withdrawal of their bids to replace Donohoe, each stating that they did not have the required support to oust the incumbent. In late June, MNI's Policy team highlighted the threats to Cuerpo's run for the presidency posed by frustrations over a thwarted banking merger and anger among other European nations at Spain's intransigence on hitting elevated NATO defence spending targets.

MNI IRAN: Pezekshian Says Iran Open To US Talks In Interview w/Tucker Carlson

President Masoud Pezeshkian has given a high-profile interview to conservative talk show host Tucker Carlson. In the interview, Pezeskhian claims that Iran has never sought to create a nuclear bomb, and that the idea is a fabrication from Israeli PM Benjamin Netanyahu. Asked if Iran will allow other countries to verify its enrichment activities, the president says "we are ready to hold talks" on monitoring and "we stand ready" to accept foreign monitoring, but this will require access to the nuclear facilities damaged in US and Israeli airstrikes.

US TSYS

MNI US TSYS: Trump Announces Tariffs via Social Media

Treasuries look to finish broadly lower - but off midday lows as Pres Trump announced tariffs via social media Monday (that spurred Brazil's Lula to say it is "Irresponsible to threaten tariffs on Social Media).
Currently, Tsy Sep'25 10Y futures trades -7.5 at 110-31.5 (110-29 low / 111-12.5 high), sitting on key support at 110-31, the 50-day EMA, and the Jul 3 low. A clear break of this average would signal scope for a deeper correction and highlight a possible reversal.
Tsy 10Y yield climbed to 4.3972% high late Monday, curves bear steepened w/ 2s10s +2.512 at 47.473, 5s30s +3.771 at 96.145.
Tsys had gapped higher briefly early Monday after Tsy Sec Bessent alluded to several trade announcements expected over the next 24 hours with "plenty of countries wanting to make deals" -- but Tsys swiftly pulled back from highs amid a general lack of specifics from the Trump administration.
Rates extended lows along with equities after Pres Trump announced 25% tariffs on Japan and South Korea Goods. Additional announcements included: 25% tariffs on Malaysia and Kazakhstan, 30% on South Africa and 40% on Laos and Myanmar.
Price action is bolstered by the USD index respecting its test of long-term trendline support, fostering the subsequent extension to fresh recovery highs.
No data Monday, limited on tap Tuesday: NFIB Small Business Optimism at 0600ET, Consumer Credit at 1500ET, Tsy bills and $58B 3Y Note auction (91282CNM9) at 1300ET. Main focus on Wednesday's FOMC minutes for the June meeting.

OVERNIGHT DATA

No US economic data Monday, limited Tuesday: NFIB Small Business Optimism and Consumer Credit.

MARKETS SNAPSHOT

Key market levels of markets in late NY trade:
DJIA down 477.39 points (-1.06%) at 44344.35
S&P E-Mini Future down 53.5 points (-0.85%) at 6270
Nasdaq down 198.8 points (-1%) at 20399.23
US 10-Yr yield is up 4 bps at 4.3853%
US Sep 10-Yr futures are down 8/32 at 110-31
EURUSD down 0.0056 (-0.48%) at 1.1722
USDJPY up 1.56 (1.08%) at 146.03
WTI Crude Oil (front-month) up $1 (1.49%) at $68.02
Gold is up $2.52 (0.08%) at $3339.56

European bourses closing levels:
EuroStoxx 50 up 52.73 points (1%) at 5341.54
FTSE 100 down 16.38 points (-0.19%) at 8806.53
German DAX up 286.22 points (1.2%) at 24073.67
French CAC 40 up 27.2 points (0.35%) at 7723.47

US TREASURY FUTURES CLOSE

3M10Y +4.787, 3.21 (L: -5.674 / H: 4.401)
2Y10Y +2.701, 48.662 (L: 46.277 / H: 49.898)
2Y30Y +4.641, 102.16 (L: 98.795 / H: 103.915)
5Y30Y +3.626, 96 (L: 93.68 / H: 97.128)
Current futures levels:
Sep 2-Yr futures down 0.875/32 at 103-21.125 (L: 103-20.75 / H: 103-23.875)
Sep 5-Yr futures down 3.25/32 at 108-8 (L: 108-06.75 / H: 108-15.75)
Sep 10-Yr futures down 8/32 at 110-31 (L: 110-29 / H: 111-12.5)
Sep 30-Yr futures down 29/32 at 113-11 (L: 113-04 / H: 114-13)
Sep Ultra futures down 1-07/32 at 116-14 (L: 116-04 / H: 117-26)

MNI US 10YR FUTURE TECHS: (U5) Monitoring Support At The 50-Day EMA

RES 4: 113-07 76.4% retracement of the Apr 7 - 11 bear leg
RES 3: 112-23 High May 1 and key resistance
RES 2: 112-12+/15 High Jul 1 / 61.8% of the Apr 7 - 11 sell-off
RES 1: 111-28 High Jul 3
PRICE:‌‌ 110-31+ @ 1520ET Jul 07
SUP 1: 110-31 50-day EMA
SUP 2: 110-16 Low Jun 20
SUP 3: 110-10+ Low Jun 16
SUP 4: 110-03 76.4% of the May 22 - Jul 1 bull leg

A bull cycle in Treasury futures is intact and - for now - the latest pullback appears corrective. The contract remains above a key support at 110-31, the 50-day EMA, and the Jul 3 low. A clear break of this average would signal scope for a deeper correction and highlight a possible reversal. For bulls, a resumption of gains would open 112-15, the 61.8% retracement of the Apr 7 - 11 steep sell-off. Initial resistance is at 111-28, the Jul 3 high.

SOFR FUTURES CLOSE

REFERENCE RATES (PRIOR SESSION)

US TSYS: Repo Reference Rates

Secured Overnight Financing Rate (SOFR): 4.35% (-0.04), volume: $2.846T
Broad General Collateral Rate (BGCR): 4.32% (-0.05), volume: $1.140T
Tri-Party General Collateral Rate (TCR): 4.32% (-0.05), volume: $1.109T
(rate, volume levels reflect prior session)

STIR: FRBNY EFFR for prior session:

Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $129B
Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $277B

FED Reverse Repo Operation

RRP usage inches up to $218.030B this afternoon from $214.665B last Thursday, total number of counterparties at 37. Usage had fallen to $54.772B on Wednesday, April 16 -- lowest level since April 2021 - compares to yesterday's (July 1) $460.731B highest usage since December 31.

MNI PIPELINE: Corporate Bond Update: $3B Carnival Launched, IADB Expected Tuesday

Date $MM Issuer (Priced *, Launch #)
07/07 $6B #Broadcom $1.75B 5Y +68, $1.75B 7Y +78, $2.5B 10Y +85
07/07 $3B #Carnival Corp 7NC 5.75%
07/07 $2.05B #Nationwide Bldng Soc. $750M 4NC3 +80, $300M 4NC3 SOFR+107, $1B 11NC10+115
07/07 $750M #CIBC 60.25NC5 7%
07/07 $650M #Avalon Holdings 5+108
07/07 $500M *Shinhan Financial 5Y +63
07/07 $Benchmark Rep of Guatemala 10Y 6.375%a, 30Y 7%a
07/07 $Benchmark Nissan Motor 5Y 7.25%a, 7Y 7.75%a, 10Y 8%a
07/07 $Benchmark NTT Finance Corp multi tranche investor calls: 2Y, 3Y fix/SOFR, 5Y fix/SOFR, 7Y, 10Y, 12Y -- in addition to EUR issuance 2Y, -4Y, 8Y and 12Y
Expected Tuesday:
07/07 $Benchmark IADB 10Y

MNI BONDS: EGBs-GILTS CASH CLOSE: Weakness Builds Into The Close

Bunds slightly underperformed Gilts Monday.

Yields started the session by edging lower. Eurozone retail sales came in weak, though German industrial production was surprisingly solid versus last week's factory orders data.
Core FI would weaken over the course of the rest of the European session, with oil prices and equities edging up, albeit amid light volumes. Yields closed at the session highs.
Just after the cash close, however, we saw a bounce in Bund and Gilt futures after US President Trump announced the imposition of 25% tariffs on South Korean and Japanese imports.
The German and UK cash curves both bear steepened on the day.
Periphery / semi-core EGB spreads closed slightly wider, with BTPs underperforming.
Tuesday's central bank speaker slate is quiet, with only an appearance by ECB's Nagel. In addition, we get German trade data.

Closing Yields / 10-Yr EGB Spreads To Germany

Germany: The 2-Yr yield is up 2.1bps at 1.837%, 5-Yr is up 3.6bps at 2.161%, 10-Yr is up 3.6bps at 2.643%, and 30-Yr is up 3.1bps at 3.118%.
UK: The 2-Yr yield is up 1.2bps at 3.864%, 5-Yr is up 2bps at 4.011%, 10-Yr is up 3.2bps at 4.586%, and 30-Yr is up 4.8bps at 5.391%.
Italian BTP spread up 1.2bps at 84.8bps / French OAT up 0.5bps at 67.8bps

MNI FOREX: Greenback Extending Recovery Amid Tariff Developments

Trepidation surrounding renewed tariff concerns has boosted US dollar sentiment on Monday, allowing the USD index to extend its most recent recovery. Price action is bolstered by the USD index respecting its test of long-term trendline support, fostering the subsequent extension to fresh recovery highs.
The bear steepening move for the treasury curve and late weakness for equities are providing the dominant drivers for FX in late trade, while last week’s stellar US payrolls data may also be underpinning the renewed greenback optimism.
Initial dynamics weighed significantly on the likes of AUD and NZD Monday, although as the session has progressed the Japanese yen and some EM currencies have been notable laggards. The latest posts via truth social on the intended 25% tariffs on Japan and South Korea have exacerbated the weakness for the JPY and KRW.
For USDJPY, session gains currently stand at 1.13% as we approach the APAC crossover. Spot ramped higher following the breach of the 50-day EMA, at 144.91, and the clean break has prompted a significant narrowing of the gap to 146.19, the Jun 24 high.
The late extension of dollar strength also prompted EURUSD to slip back below 1.17, a post-payrolls low, tracking towards key short-term support to watch lies at 1.1630, the 20-day EMA.
Separately, Trump's ire toward BRICS countries has tilted EM FX to underperform to start the week. Higher beta ZAR and BRL have notably depreciated after the President warned there would be "no exceptions" to a policy of 10% additional trade tariffs on nations that adhere to the BRICS' anti-American policies. CLP and COP are also extending losses to over 1.5% on the session.
Tuesday’s focus turns to the RBA decision, where consensus sees the board delivering a 25bp rate cut to 3.60%.

TUESDAY DATA CALENDAR

Date	GMT/Local	Impact	Country	Event
08/07/2025	0500/1400		JP	Economy Watchers Survey
08/07/2025	0600/0800	**	DE	Trade Balance
08/07/2025	0645/0845	*	FR	Foreign Trade
08/07/2025	0900/1000	*	GB	Index Linked Gilt Outright Auction Result
08/07/2025	1000/0600	**	US	NFIB Small Business Optimism Index
08/07/2025	-		EU	ECB de Guindos At ECOFIN Meeting
08/07/2025	1255/0855	**	US	Redbook Retail Sales Index
08/07/2025	1400/1000	*	CA	Ivey PMI
08/07/2025	1500/1100	**	US	NY Fed Survey of Consumer Expectations
08/07/2025	1530/1130	**	US	US Treasury Auction Result for 52 Week Bill
08/07/2025	1700/1300	***	US	US Note 03 Year Treasury Auction Result
08/07/2025	1900/1500	*	US	Consumer Credit
09/07/2025	-		NZ	Reserve Bank of New Zealand Meeting
09/07/2025	0130/0930	***	CN	CPI
09/07/2025	0130/0930	***	CN	Producer Price Index
09/07/2025	0200/1400	***	NZ	RBNZ official cash rate decision