Daily Brief Macro: HEW: Kicked Can Lands Steady and more

• Trump kicked the tariff can a few weeks to 1 August, leaving other policymakers and markets in a wait-and-see mode. Pricing was little changed amid little news elsewhere.
• We thematically explored the market implications of resilience rolling cuts later, how healthy the US labour market data is, and dug into the UK’s political problems.
• Next week’s UK labour market and inflation data are critical ahead of an August BoE decision we believe remains finely balanced. US and EA inflation are other highlights.

• Amid the uncertainty surrounding the trade negotiations, Asian economies will have to provide fiscal and monetary boost to their domestic economies. They can’t rely on exports to sustain their growth.
• Asian economies shall likely provide more monetary stimuli than fiscal. Rapidly declining inflation affords their central banks larger wiggle room. China, Korea India, Indonesia, Philippines have room to cut rates.
• Fiscal stimulus is more contentious. China and Indonesia have articulated targets of expanding fiscal deficit and public debt. Korea’s low public debt and low bond yield affords some fiscal room. 

• Japan faces falling real wages and persistent inflation, with policy inaction likely to continue until late 2025.

• The Vietnam-US trade deal risks undermining WTO rules and global trade norms.

• China’s falling producer prices reflect healthy economic adjustment through market-driven consolidation.

• Trump signs executive order reducing tariffs on UK exports and lowering taxes on Chinese goods
• US and China announce reduction in tariffs, leading to relief for Americans and investors
• Despite initial shock and market volatility, US economy appears to be holding up despite tariff impacts

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• India’s $736.3 billion external debt creates liquidity risks with 42.4% short-term obligations, while ECB borrowings surge five-fold to $7.8 billion in Q4 FY25.
• Trump’s 26% reciprocal tariff threat appears as negotiating theater rather than economic warfare, with 90-day suspension revealing choreographed concessions strategy.
• India’s $696.65 billion forex reserves provide 11-month import cover, but widening trade deficits and debt vulnerabilities challenge long-term resilience narratives.

• Iron ore demand remains strong as supply tightens from Australia and Brazil, and China pushes for industrial reforms that could support raw material prices.
• Despite macroeconomic headwinds and Malaysian tariffs on Chinese steel, robust mill profits, and limited production curbs are expected to sustain iron ore demand.
• Prices are trading above key moving averages, suggesting ongoing upside momentum, while the MACD above its signal line confirms the prevailing bullish bias.

• Property / In Depth: The scam that turned China’s housing slump into a cash machine
• Education /In Depth: China’s preschoolers are stilling cramming for first grade
• Thailand /: Thailand’s casino plans stall amid political turmoil