What better way to conclude a trade agreement than with a relaxing weekend on a Scottish golf course? The United States and the European Union have reached an agreement to impose a 15% tariff on most goods shipped from the Old Continent to American ports. Brussels has also committed to purchasing American gas and investing in the United States. In return… nothing. Which casts some doubt on the use of the phrase "reached an agreement".

Lacking the appetite for confrontation, the EU had itself floated the 15% rate, which has led some commentators to suggest it could have been worse. Others, more acerbic, note that "Brussels passes under the yoke of Washington" — a more elegant and arguably more accurate phrasing. The expression harks back to the humiliation suffered by Roman soldiers in the 4th century BC at the hands of the Samnites, who forced them to pass under a tunnel formed by crossed spears. In simpler terms, it's yet another case of "Trump gets the final say".

Equity markets, meanwhile, are breathing a sigh of relief: a lopsided deal is still better than no deal at all, at least from a European financial perspective. On Wall Street, a favourable deal is naturally preferable to any other outcome. President Trump continues to advance his agenda through the now-familiar tactic: propose outrageous demands to secure more palatable gains. The strategy is working, and for now, it does not appear to be driving American import prices into overdrive. The most visible impact is on monetary policy: inflationary concerns have compelled the Federal Reserve to maintain elevated interest rates, despite Trump’s clamorous demands for Powell to loosen policy. The issue takes centre stage this week, with the Fed’s rate decision due on Wednesday. Rates are expected to remain unchanged, and the accompanying rhetoric is likely to emphasise a wait-and-see approach pending further data. Investors, nonetheless, are hoping for some hint of easing come September.

Meanwhile, the next fortnight will be the most intense of the summer earnings season. So far, the results are mixed. In the US, with one-third of companies having reported, S&P 500 constituents are beating earnings expectations more often than not, but the margins of outperformance are narrower than usual. Annual earnings growth remains at its lowest since early 2024.

Key developments to watch this week:

  • The United States and China will resume trade talks today in Stockholm, aiming to extend their tariff truce for another three months ahead of the 12 August deadline.

  • Thailand and Cambodia have agreed to initiate immediate ceasefire talks, under pressure from Washington.

  • Corporate diary: US tech takes the spotlight with earnings reports from Microsoft, Meta, Apple, and Amazon. In Europe, L'Oréal, AstraZeneca, Hermès, Airbus, Shell, Schneider, and UBS will unveil their numbers.

  • Macro calendar: equally packed. Alongside the Fed (Wednesday) and Bank of Japan (Thursday) meetings, investors face a barrage of data releases — employment, inflation, and GDP, especially in the US.

As for Asia-Pacific markets, the week opens in disarray. Japan is down 1% amid rumours of the Prime Minister's resignation and ahead of the BOJ's rate decision. India and mainland China are hovering around flat. Modest gains have taken hold in Australia, South Korea, and Taiwan. European futures are glowing green.

Today's Economic Highlights:

See the full calendar here.

  • GBP / USD: US$1.34
  • Gold: US$3,343.84
  • Crude Oil (BRENT): US$67.92
  • United States 10 years: 4.4%
  • BITCOIN: US$119,543

In corporate news:

  • LVMH is reportedly in talks to sell its Marc Jacobs brand for up to €850 million, according to the Wall Street Journal.
  • Airbus announces the successful launch of four CO3D satellites.
  • Heineken's half-year profits exceed forecasts.
  • Nordex reports better-than-expected results for the second quarter.
  • The CEO of Banco de Sabadell still believes that the takeover bid by BBVA was too low.
  • Roche is investigating whether a new drug can delay or prevent Alzheimer's disease.
  • Eni is considering increasing its share buybacks, according to its CEO.
  • Intel is spinning off its networking unit as part of its new CEO's strategy.
  • Microsoft is investigating whether Chinese hackers learned about SharePoint vulnerabilities through an alert, according to Bloomberg.
  • Tesla will launch a human-driven chauffeur service in the San Francisco Bay Area, according to California authorities.
  • Wisetech Global has appointed Zubin Appoo as permanent managing director.
  • The deadline for the conclusion of the agreement on CK Hutchison's Panamanian ports could be pushed back for geopolitical reasons.
  • Samsung signs a $16.5 billion contract to supply semiconductors to Tesla.
  • Today's main publications: EssilorLuxottica, Heineken NV, Waste Management, Cadence Design, Enterprise Products, Brown & Brown, Nucor…

See more news from UK listed companies here

Analyst Recommendations:

  • Wizz Air Holdings Plc: Panmure Liberum maintains its sell recommendation with a price target raised from GBX 800 to GBX 1000.
  • The Berkeley Group Holdings Plc: Barclays maintains its overweight recommendation and reduces the target price from 52.68 to GBP 52.60.
  • Eutelsat Communications: Deutsche Bank maintains its sell recommendation with a price target raised from 1.95 to EUR 2.
  • Julius Bär Gruppe Ag: Deutsche Bank maintains its buy recommendation and raises the target price from CHF 62 to CHF 63.
  • Sopra Steria Group: Bernstein maintains its outperform recommendation and reduces the target price from EUR 230 to EUR 228.
  • Eni S.p.a: Mediobanca maintains its neutral recommendation with a price target raised from 14 to EUR 15.
  • Moncler S.p.a.: Bernstein maintains its market perform recommendation with a price target reduced from 60 to EUR 55.
  • Vontobel Holding Ag: Citigroup remains neutral recommendation with a price target reduced from CHF 66 to CHF 62.
  • Munich Re: Autonomous Research upgrades to outperform from neutral with a price target raised from 550 to EUR 650.
  • Repsol S.a.: Grupo Santander maintains its outperform recommendation and raises the target price from 15.50 to EUR 18.
  • Puma Se: Broker: BNP Paribas Exane downgrades to underperform from neutral with a price target reduced from EUR 25 to EUR 15.
  • Banco De Sabadell, S.a.: Oddo BHF maintains its neutral recommendation with a price target raised from 2.60 to EUR 2.90.