July 2025 - Carry Trading - Beat the banks and brokers with their own weapons

UK Retail Sales Edge Up But Challenges Persist

28. July 2025 by Analyst

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Excerpt:
The CBI’s retail sales index rose slightly in July 2025 but stayed weaker than expected, showing UK retailers are still battling tough economic conditions. Meanwhile, Hong Kong’s import growth slowed in June as demand shifted across sectors and trading partners.

📉 UK Retail Sales: Modest Improvement in July

The Confederation of British Industry’s (CBI) latest monthly retail sales gauge brought a hint of relief for UK retailers. The index climbed to -34 in July, improving from June’s 17-month low of -46. However, this figure still missed analysts’ expectations of -26, underlining how high prices and ongoing economic uncertainty continue to drag on consumer spending.

Retail sales volumes have now fallen for ten consecutive months, reflecting the squeeze on household budgets. Looking ahead, retailers are slightly more optimistic about August, with the measure of expected sales rising to -31, compared to -49 a month earlier.

🌏 Hong Kong Imports: Growth Cools in June

Hong Kong’s imports climbed 11.1% year-on-year to $476.7 billion in June 2025, according to the Census and Statistics Department. While this marks another month of growth, it was the slowest rate in five months, down from May’s sharp 18.9% rise.

Imports surged from Vietnam (+50.6%), the United Kingdom (+44.7%), mainland China (+17.3%), Thailand (+15.9%) and the United States (+3.9%). However, imports from South Korea saw a sharp decline (-27.1%).

By product category, there were broad gains in key sectors:

Electrical machinery, apparatus and parts rose 14.6% (vs 23.7% in May)
Telecommunications equipment increased 17.7%
Office machines and data processing equipment rose 9.8%
Miscellaneous manufactured articles grew 12.6%
Power-generating machinery jumped 38.7%

In contrast, declines were recorded for non-metallic mineral manufactures (-15.6%), professional and scientific instruments (-9.4%) and petroleum-related products (-10.5%).

📌 Sources

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U.S. Mortgage Applications Surge, Markets Rally Amid Trade Developments, and Mexico Inflation Softens

9. July 2025 by Analyst

Mortgage Applications See Strongest Weekly Rise in a Month

In the first week of July 2025, the volume of U.S. mortgage applications soared by 9.4% from the previous week — the largest increase in a month, according to data from the Mortgage Bankers Association. This marks the third consecutive weekly gain, the longest streak since December 2024, as benchmark mortgage rates dipped to their lowest since April.

Refinancing activity, which tends to respond quickly to changes in short-term rates, jumped 9% week-over-week and surged 56% compared to the same period in 2024. Similarly, purchase applications rose 9% on the week and were up 25% year-over-year, highlighting renewed strength in the housing market. source: Mortgage Bankers Association of America

Markets Edge Higher on Trade Announcements and Fed Speculation

U.S. equities closed higher on Wednesday as traders digested updates on trade policy and awaited the Federal Reserve’s next moves. The S&P 500 gained 0.5%, the Nasdaq climbed 0.7%, and the Dow Jones rose by nearly 200 points.

President Trump signaled that major trade announcements would be made, including a planned 50% tariff on copper imports and potential 200% tariffs on pharmaceuticals, though implementation is delayed by 12–18 months to give industries time to adapt.

Market participants are closely watching for the FOMC minutes release, which may offer insights into the timing of potential interest rate cuts. Expectations remain strong for two 25 basis point cuts before year-end.

Technology stocks led gains, with Nvidia up 2.2% and Microsoft rising 1.2%. Apple shares were flat, following a statement by White House Trade Counselor Peter Navarro suggesting the company considers itself “too big to tariff.”

Mexico’s Inflation Slows but Core Pressures Rise

Mexico’s annual inflation rate eased to 4.32% in June 2025, down slightly from 4.42% in May, aligning closely with market expectations of 4.31%, according to the national statistics agency INEGI.

Price growth moderated in agriculture (5.04% vs 6.76%) and energy (3.56% vs 3.93%), while accelerating for goods, food, beverages, and services. Notably, core inflation ticked up to 4.24%, suggesting that underlying price pressures remain sticky.

On a monthly basis, inflation was unchanged at 0.28%, maintaining the same pace as in May. Instituto Nacional de Estadística y Geografía (INEGI)

Conclusion

With falling mortgage rates energizing the U.S. housing market, equity markets buoyed by trade policy hints, and inflation trends in Mexico showing mixed signals, July 2025 is shaping up to be a pivotal month for both investors and policymakers.

Stay tuned for more updates on monetary policy, inflation data, and global economic trends.

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Markets eye US tariff deadline, FOMC minutes, global central bank moves, and key data from China, Germany, UK, and Canada in the week of July 7.

4. July 2025 by Analyst

🌍 Global Themes

Trade Tensions Return: The July 9th deadline marks the end of the US tariff pause. Only partial deals (UK, Vietnam, China framework) are in place. Markets are bracing for possible escalations and their impact on global trade flows.
Fed Watch: Investors await the FOMC minutes and several Fed speeches to gauge the outlook for interest rates. Chair Powell maintains a cautious tone, but markets want more clues on the path for policy in H2.
Central Bank Decisions: Policy meetings in Australia, South Korea, Malaysia, and New Zealand could signal regional divergence amid slowing global growth and easing inflation.

🇺🇸 United States

Tariff Deadline: High stakes around the July 9th expiration of tariff relief. Key sectors may face higher import costs unless further agreements are reached.
Fed & Data:
- FOMC minutes and Fed speeches in focus.
- Data includes: Weekly jobless claims, consumer credit, NFIB Small Business Index, and budget statement.
Earnings Season Kickoff:
- Watch Delta Air Lines and Conagra Brands earnings on Thursday for early corporate sentiment.

🇨🇦 Canada

June Jobs Report and Ivey PMI will shape expectations around Bank of Canada’s next move.

🇲🇽 Mexico & 🇧🇷 Brazil

Mexico: June inflation report will guide Banxico’s next rate decision.
Brazil: Updates on inflation, retail sales, and business confidence are due.

🇪🇺 Europe

Germany: Expected second monthly industrial production decline, plus trade, wholesale prices, and final inflation data.
Eurozone: First dip in retail sales in 5 months.
UK: Key data on monthly GDP, industrial output, trade balance, and Halifax house prices.
Italy & France: Final inflation and industrial figures.
Others: Switzerland (consumer confidence), Turkey (IP), Russia (inflation).

🌏 Asia-Pacific

China:
- CPI likely flat; PPI deflation to ease (still -3.2% y/y).
Japan:
- Full slate of data: wages, current account, machine orders, producer prices.
Australia:
- RBA decision: Third rate cut (25 bps) expected.
South Korea & Malaysia:
- Monetary policy updates amid growth concerns.
New Zealand:
- RBNZ to hold at 3.25%.
Others:
- Inflation data: Vietnam, Thailand, Taiwan.
- Singapore: GDP growth to be closely watched.

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U.S. Nonfarm Payrolls Beat Expectations in June 2025 Amid Economic Resilience

3. July 2025 by Analyst

U.S. Nonfarm Payrolls Rise 147K in June, Topping Expectations

The U.S. economy added 147,000 jobs in June 2025, according to the Bureau of Labor Statistics, surpassing forecasts of 110,000 and marking a slight uptick from an upwardly revised 144,000 in May. The latest reading aligns with the 12-month average of 146,000, continuing to demonstrate labor market resilience despite economic headwinds.

Government jobs made up nearly half the gains, adding 73,000 positions, primarily in state education (+40K) and local education (+23K). Federal government employment, however, declined by 7,000, continuing a downtrend since its January peak.

Healthcare remained a key driver, adding 39,000 jobs, with hospitals (+16K) and nursing and residential care facilities (+14K) leading the way. Social assistance roles also grew by 19,000.

⚠️ Analysts caution that a hiring slowdown could emerge as uncertainty surrounding tariffs, trade, and immigration policies persists.

ISM Services PMI Rebounds to 50.8

The ISM Services PMI climbed to 50.8 in June, up from 49.9 in May, exceeding expectations of 50.5. This signals a return to modest growth in the services sector after a brief contraction.

Key highlights:

Business activity rose to 54.2 (vs 50.0)
New orders rebounded to 51.3 (vs 46.4)
Inventories and export orders also improved
Price pressures eased slightly to 67.5 from 68.7

However, concerns about tariffs and slowing supplier delivery performance (50.3 vs 52.5) remain prevalent. Middle East tensions were noted for the first time, though no direct supply disruptions were reported.

U.S. Trade Deficit Widens Sharply

The U.S. trade deficit widened to $71.5 billion in May, up from $60.3 billion in April, as exports dropped 4% to $279 billion, led by declines in nonmonetary gold, natural gas, and finished metal shapes. Imports dipped just 0.1% to $350.5 billion.

Major trade gap increases:

EU: -$22.5B (from -$17.9B)
Mexico: -$17.1B (from -$13.5B)
Canada and Vietnam: modest increases
China: narrowed to -$14B (from -$19.7B)

source: Bureau of Economic Analysis (BEA)

Markets Rally on Strong Jobs Data and AI Optimism

All three major U.S. indices climbed over 0.8% on Thursday, with the S&P 500 and Nasdaq 100 closing at record highs. The strong June payroll report and an unexpected drop in the unemployment rate to 4.1% fueled investor confidence.

Big movers:

Nvidia: +1.3%
Synopsys: +4.2% on lifted U.S. export restrictions to China
Cadence Design & Synopsys: ~+5% on AI strength
Datadog: +10% on S&P 500 inclusion

Optimism also stemmed from progress in the U.S.-Vietnam trade deal and the House nearing final approval of President Trump’s $3.4 trillion tax-and-spending bill.

Key Takeaways

Labor market continues to show strength but faces downside risks.
Services sector rebounds, though growth remains modest.
Trade imbalance widens on export slump.
Stock market surges on tech gains and policy optimism.

Conclusion

The June 2025 economic indicators paint a mixed yet cautiously optimistic picture. While the labor market and services sector show resilience, trade imbalances and policy uncertainty loom large. Investors appear encouraged by tech sector momentum and fiscal stimulus prospects, but volatility could reemerge as global tensions and trade debates evolve.