FED: September Rate Cut Base Case For Most, Though Some Holdouts Remain (2/2)

Lutnick stated the US are not rushing to secure more trade deals ahead of Friday's deadline, stressing Trump's openness to negotiating after the deadline passes. The latest on some of the remaining key deals for markets:

• Brazil: Foreign Minister could extend current US trip for tariff talks
• Canada: Negotiations at an "intense phase"
• Chile: Expects copper tariff exception
• China: Stockholm talks underway; 90-day truce extension likely
• India: Greer says trade talks need "more negotiations"
• Mexico: Have made concrete proposals, US are analysing it, expects response this week
• Norway: Tariff talks "still ongoing"
• Russian trade partners: Secondary tariffs could follow 10-12 Ukraine ceasefire demand
• South Africa: Treasury now considering potential impact of planned tariffs
• South Korea: Faces "strong pressure", meeting with Bessent on July 31st
• UK: Not expecting steel deal during Trump's visit
• Global: Baseline RoW tariff will be 15-20%

Speaking in Prince Edward Island, PM Mark Carney says that trade talks with the US "are at an intense phase". Says that "any trade deal with the US must be on fair terms for Canada." Adds that a trade deal with the US "without any tariffs is not likely." Carney: "That said, there's a question as to how large those tariffs would be." 

• Asked about US President Donald Trump's comments about the difficulty of negotiating a deal with Canada, Carney says, "Yes, we are difficult, but we are fighting for Canada."
• Says that US comments regarding Canada not being a priority in trade talks are "part of the negotiation."
• Former White House official Larry Haas, speaking to CTV on 27 July, said that the gov't in Ottawa needs to remain robust, “Canada needs to make clear to the United States that it’s not going to take just any deal.”
• With Canada risking an escalation in tariffs to 35% from 1 August, reaching a deal in the coming days will be of the highest priority for the Carney gov't, despite efforts to downplay the risks to Canadian growth from such high levies. 

No clear, fresh fundamental driver for the latest extension higher in the USD, with gold lower and S&P 500 e-minis closing the Asia-Pac opening gap higher. Meanwhile, benchmark European equity indices remain under pressure.

• U.S. President Trump has reiterated his ability to implement tariffs, earmarking a 15-20% “world tariff” range (in line with levels levied in recent negotiations), while shortening the deadline for Russia to agree a ceasefire truce with Ukraine (to 10-12 days from now).
• Elsewhere, there hasn’t been much in the way of negatives surrounding the Sino-U.S. trade meeting in Stockholm, although that only got underway this afternoon.
• On net, it looks like the watering down of some of the recent headwinds for the USD, along with Trump’s softening tone when it comes to the immediate future of Fed Chair Powell, is allowing some of the USD negativity unwind.
• Still, the broader USD (BBDXY) only trades back to levels that were registered last Monday.
• EUR/USD remains under the most pressure despite the U.S.-EU trade agreement, with the deal still deemed punitive enough to harm to EU, despite the avoidance of the worst-case scenario.
• EUR/USD registers lows of 1.1626, still some way above next support at the 50-day EMA (1.1559). a break there would pose a bigger threat to the bullish case in the pair.