Group 1 - Singapore's non-oil domestic exports (NODX) fell by 4.6% year-on-year in July, significantly worse than the market expectation of a 1.8% decline, primarily due to a drop in pharmaceutical and other non-electronic product exports [1] - In July, Singapore's non-oil exports to the US, China, and Indonesia decreased, while exports to the EU, Taiwan, South Korea, and Hong Kong increased [1] - The Singapore government raised its full-year economic growth forecast from 0.0%-2.0% to 1.5%-2.5% despite concerns over external uncertainties [1] Group 2 - Singapore's Economic Development Board maintained its forecast for non-oil export growth at 1% to 3% for the year, indicating potential weakness in the second half of 2025 after a strong start [1] - Prime Minister Lawrence Wong expressed uncertainty regarding potential future US tariff increases on key industries such as pharmaceuticals and semiconductors, highlighting the pressure on small open economies like Singapore [2]

Group 1 - The core agreement between the US and EU involves a 15% tariff rate, increasing the effective tariff on EU goods exported to the US from approximately 10% to about 16% [1] - Goldman Sachs revised its forecast for the impact of trade tensions on the Eurozone's GDP from -0.6% to -0.4%, indicating a more positive outlook for the European economy [1][6] - The agreement is expected to positively influence European growth forecasts for 2025 and 2026, raising predictions by 0.1 percentage points to 1.1% and 1.2% respectively [1][6] Group 2 - The automotive sector benefits significantly from the agreement, with tariffs on cars reduced from 27.5% to 15%, impacting approximately €60 billion in exports, which constitutes 10% of total EU exports to the US [2] - Germany and Italy are the primary beneficiaries, accounting for 74% of EU automotive exports to the US [2] Group 3 - Pharmaceutical products are temporarily exempt from the new 15% tariff until early 2027 due to the sensitivity of drug pricing, with Ireland, Germany, Belgium, and Italy being the main beneficiaries of this exemption [3] Group 4 - Tariffs on steel and aluminum will remain at 50%, while the EU plans to reduce trade barriers through tariff cuts and quota systems [4] - Steel and aluminum products represent only 4% of the EU's total exports to the US, approximately €23 billion [4] Group 5 - The EU has committed to significantly increasing its procurement of US energy products, aiming for $750 billion over three years, which would triple current imports and account for 60% of EU energy imports [5] - Achieving this procurement goal is considered highly challenging, even with existing plans included [5] Group 6 - The overall economic impact of the tariff agreement is better than expected, with Goldman Sachs adjusting its GDP growth forecasts upward for 2025 and 2026, while also noting a slight increase in inflation expectations for 2026 [6]

Core Viewpoint - The central bank of Malaysia has revised down its economic growth forecast for 2025, now expecting a growth rate between 4% and 4.8%, lower than the previous estimate of 4.5% to 5.5% [1] Economic Growth Forecast - The Malaysian central bank has adjusted its 2025 economic growth forecast to a range of 4% to 4.8% [1] - This revision reflects a decrease from the earlier forecast of 4.5% to 5.5% [1] Inflation Expectations - The inflation forecast for 2025 has been lowered from the original range of 2% to 3.5% to a new range of 1.5% to 2.3% [1] - The adjustment in inflation expectations is primarily attributed to a slowdown in cost and demand outlook [1]

Core Viewpoint - Morgan Stanley predicts that the Federal Reserve will maintain its assessment of the economy as growing at a "solid pace," with a robust labor market and slightly elevated inflation [2][3]. Economic Assessment - The Federal Reserve is expected to emphasize the risks associated with its dual mandate of employment and inflation [2]. - Recent indicators show that U.S. economic activity continues to grow steadily, with a low unemployment rate and a slight increase in inflation [2]. - Morgan Stanley forecasts a 2.2% annualized growth rate for Q2 GDP, while the Atlanta Fed's GDPNow model predicts 2.4% and the New York Fed's Nowcast model estimates 1.7% [2]. Labor Market Insights - The labor market remains in good condition, with employment growth slowing but the unemployment rate unchanged compared to 12 months ago [2][11]. - Employment growth is expected to slow from an average of 130,000 jobs per month in the first half of 2025 to about 50,000 jobs per month in 2026 [11]. Inflation and Tariff Impact - Inflation is described as "slightly high," with June's CPI report reflecting new price pressures from tariffs [2][5]. - Morgan Stanley anticipates that tariffs will lead to a rise in overall and core PCE price indices, reaching 3.0% and 3.2% respectively by 2025 [5]. - Core PCE inflation is expected to peak at an annualized rate of 4.1% by the end of Q3 2025 before declining [5]. Federal Reserve Policy Outlook - The Federal Reserve is likely to keep the target federal funds rate unchanged at 4.25%-4.50% until March 2026, with potential rate cuts of 25 basis points at subsequent meetings [11]. - Morgan Stanley expects the Fed to delay rate cuts but suggests that the magnitude of cuts may exceed market expectations [11]. Trade and Economic Uncertainty - The uncertainty surrounding trade policies continues to pose risks to the Fed's dual mandate [4]. - Fed Chair Powell is expected to acknowledge the pressures from tariffs and emphasize the ongoing uncertainty in trade, immigration, fiscal, and regulatory policies [4].

Group 1 - US Treasury yields mostly declined on July 21, with the 2-year yield down 3 basis points to 3.85%, the 10-year yield down 6 basis points to 4.38%, and the 30-year yield down over 6 basis points to 4.94% [1] - The yield spread between the 2-year and 10-year Treasury notes narrowed to 53 basis points [1] Group 2 - The Conference Board reported a 0.3% decline in the Leading Economic Index for June, falling to 98.8, which exceeded the Dow Jones forecast of a 0.2% decrease [3] - The Conference Board does not predict a recession but expects significant economic growth slowdown in 2025 compared to 2024, with a projected 1.6% growth in real GDP for this year [3] - Investors are closely monitoring Federal Reserve Chairman Jerome Powell's speech scheduled for Tuesday, as other Fed officials remain silent ahead of the upcoming FOMC meeting [3] Group 3 - The US Treasury issued $155 billion in two bond offerings on July 21, including $82 billion in 13-week bills and $73 billion in 26-week bills, with an additional $80 billion in 6-week bills scheduled for issuance on Tuesday [5]

Group 1 - The French Finance Minister, Bruno Le Maire, announced that France will revise its economic growth forecast in September [1] - Prime Minister Élisabeth Borne proposed the cancellation of two public holidays and a freeze on most public spending as part of a €43.8 billion (approximately $50.88 billion) budget tightening plan [1] - The government is focused on ensuring that this budget plan is approved by the parliament, with Le Maire expressing confidence in the bill's approval and implementation [1]

Group 1 - Singapore's OCBC Bank raised its GDP growth forecast for 2025 from 1.6% to 2.1% due to stronger-than-expected economic performance in Q2 2025 [1] - The preliminary estimate indicates that Singapore's GDP grew by 4.3% year-on-year in Q2 2025, with a seasonally adjusted quarter-on-quarter annualized growth rate of 1.4%, surpassing market expectations [1] - The economic growth in Q2 was driven by robust performances across multiple sectors, including manufacturing (5.5% YoY), services (4.1% YoY), and construction (4.9% YoY) [1] Group 2 - The report highlights significant uncertainties and downside risks in the global economy, particularly regarding the unclear direction of U.S. tariff policies in the second half of 2025, which may lead to a sharp slowdown in Singapore's growth momentum [1] - The Monetary Authority of Singapore (MAS) is expected to adopt a "wait-and-see" approach in its upcoming policy review, with the core Consumer Price Index (CPI) averaging a 0.6% year-on-year increase from January to May 2025 [2] - The official forecast for overall and core inflation for 2025 remains at 0.5% to 1.5% [2]

Core Insights - The UK GDP data for May was weaker than expected, indicating a potential downward revision of economic growth forecasts by the Office for Budget Responsibility [1] - The reported GDP contraction of 0.1% month-on-month contrasts with the expected growth of 0.1% as per a Wall Street Journal survey of economists [1] - This underperformance places the Chancellor of the Exchequer, Rachel Reeves, in a difficult position, as she must navigate fiscal rules while avoiding increases in the three main tax rates [1]

Core Viewpoint - The Reserve Bank of Australia (RBA) Chairman, Philip Lowe, forecasts a median economic growth of 0.6% for the second quarter, indicating it may be slightly higher than this level [1] Economic Forecast - The RBA's prediction suggests a stable economic outlook for Australia in the near term, with growth expectations reflecting confidence in the economy's resilience [1]

Group 1 - The inflation rate in Israel has decreased to 3.1% over the past 12 months, but it remains above the upper limit of the target range [1] - The Bank of Israel staff predicts that the economy will grow by 4.6% in 2026, an increase from the previous forecast of 4.0% [1]