Markets Today: RBNZ Rate Hold, Copper Volatility, DAX Makes a Move Toward Fresh Highs

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Most Read: S&P 500, Dow Jones Q3 Outlook: Tariffs, Tech, and Small Cap Concerns

Chinese stocks are set to hit their highest level in three years as investors hope for new steps to fight deflation and boost the economy. Meanwhile, copper prices dropped in London after President Donald Trump issued a new tariff warning.

Asian Market Wrap

The Shanghai Stock Exchange Composite Index rose 0.4%, reaching its highest level this year and the best close since January 2022. The CSI 300 index, a key measure of Chinese stocks, is also set for its highest close since December. Data showed that China’s factory prices continued to fall for the 33rd month, but consumer prices surprisingly increased in June.

In other news, Asian stocks dipped slightly by 0.1% as investors avoided risky moves after Trump escalated trade tensions.

China’s weak inflation is putting pressure on policymakers to introduce more stimulus to break the cycle of falling prices, profits, and wages. Investors are now looking to Beijing’s July Politburo meeting for stronger economic support after recent efforts to cut factory overcapacity.

RBNZ Pauses Rate Cuts, NZD Slips Toward Two-Week Lows

The New Zealand dollar dropped to 0.598, near a two-week low, after the Reserve Bank of New Zealand paused its rate cuts but hinted at more reductions if inflation slows.

The central bank kept its cash rate at 3.25%, following six cuts since August 2024. It’s being cautious due to 2.5% domestic inflation and global trade tensions that could raise prices.

However, the bank expects to lower rates further if inflation eases, and markets predict at least one more cut this year due to economic weakness.

European Open

European stocks edged up on Wednesday, boosted by defense shares, as investors watched for progress on a US-EU trade deal.

The STOXX 600 index rose 0.2% to 546.94 points. Defense stocks gained 1.1%, banks climbed nearly 1%, and energy shares were up 0.8%.

President Trump hinted at announcing EU export tariffs soon, while reports suggest EU negotiators are close to a deal with higher tariffs than the UK.

EssilorLuxottica shares jumped 5.1% after Meta reportedly acquired a 3% stake in the company.

On the FX front, The dollar rose 0.1% to 146.75 yen, hitting 147.19 earlier, marking a 1.5% weekly gain, the biggest since December. Japan, heavily reliant on exports, remains far from a trade deal, with its currency under pressure as talks stall and focus shifts to an upcoming election.

The euro stayed flat at 1.171 as the EU hopes to avoid U.S. tariffs and secure exemptions from the 10% baseline rate. The dollar index held steady at 97.60, while the British pound edged up to 1.36. The New Zealand dollar also rose slightly to 0.60.

Currency Power Balance

Source: OANDA Labs

Looking at commodities and Oil prices have recovered following a gap down over the weekend.

Gold struggled overnight and has failed to hold above the $3300/oz handle as optimism grows around trade deals. Interesting data from the World Gold Council yesterday which showed that Global Central Bank buying remains strong.

Global central banks' net gold purchases reached 20 tonnes in May, the highest in 3 months. This marks the 24th consecutive net monthly purchase.

Over the last year, central banks have bought an average of 27 tonnes of gold per month.

For a more in depth look at Oil prices, Read WTI Oil Flat After Mondays 2.2% Surge, More Upside Ahead?

Economic Data Releases and Final Thoughts

Looking at the economic calendar, it remains a quiet one. The biggest events of the day will come from comments by Central Bank policymakers, with ECB and BoE policymakers on deck.

Later in the day we have the FOMC minutes as the Trump Administration continues to put pressure on the Fed publicly to cut rates.

Given the limited data releases I am expecting tariff and trade deal chatter to dominate matters today and for the majority of the week ahead.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Chart of the Day - DAX Index

From a technical standpoint, the DAX has been moving higher this morning on optimism that the EU will strike a deal with the Trump administration.

The DAX is currently trading above the previous range high at 24330. A daily candle close above this level may lead to further upside.

Bulls do appear in control for now with trade talks ongoing.

A pullback to 24330 may provide would be bulls with potential long opportunities on an intraday basis. However, I would caution that without a daily candle close above the range (highlighted red/pink zone) a pullback toward the 24000 handle could materialize.

DAX Daily Chart, July 8. 2025

Source: TradingView.com (click to enlarge)

Support

• 24000
• 23727
• 23471

Resistance

• 24479
• 24500
• 24750

Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

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