In a surprise move, US President Donald Trump threatened to impose substantial additional tariffs on countries that do not remove discriminatory actions such as digital taxes. This announcement has sent shockwaves through global markets, with European bourses taking a hit and US equity futures slightly lower. The EUR is under pressure due to the French political turmoil, while the USD is steady and the JPY marginally outpaces its peers.

In other news, Trump has removed Federal Reserve Governor Lael Brainard from her position with immediate effect. Brainard has stated that she will not resign, adding further uncertainty to an already volatile market. The USTs are under pressure in reaction to the Trump-Cook saga, while Gilts and OATs are digesting regional political woes.

Meanwhile, gold prices have surged after Trump’s letter to Brainard, with XAU outperforming. Crude oil prices have given back geopolitical-driven gains as investors remain cautious in the face of ongoing global tensions.

Looking ahead, there are several key events on the horizon that could impact markets. These include US Durable Goods for July, Consumer Confidence for August, Atlanta Fed GDP, NBH Announcement, E3/Iran Nuclear talks, Fed Discount Rate Minutes, and speeches from Fed’s Barkin and BoE’s Mann. Additionally, supply from the US is expected to be a major factor in shaping market sentiment.

Global markets are likely to remain volatile in the coming days as investors navigate the ongoing geopolitical tensions and central bank policy decisions. Stay tuned for further updates and analysis.