Summary
Each week, I provide my views on the global macroeconomic environment, with a look ahead to the coming week and a look back at the previous one. Breaking down the top macro headlines around the world, I explain the key implications for investors—and what I think the mainstream news outlets could be missing. This week’s highlights include:
- The United States reached a trade agreement with Japan, with a better-than-feared 15% tariff on Japanese goods. The agreement caused speculation that the European Union could see a similar 15% tariff rate, but no deal has been made as of end of week.
- Purchasing Managers Index (PMI) data were mixed globally, reflecting ongoing trade tensions and uncertainty. US manufacturing PMI data will likely continue to be negatively affected by trade policy; US services are proving more resilient for now, but this could change as goods prices increase.
- The European Central Bank (ECB) held rates at 2%, with markets reducing expectations for further cuts. I now believe the ECB will only deliver one rate cut by year end, given the risk that US trade policy could be more punitive than markets anticipate.
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Published on July 25, 2025.
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