Bankruptcy Surge. Tax Reform Maneuvers. Geopolitical Escalation: Global Cross-Currents Intensify
FastBull FeaturedSummary:
Trump's "Big and Beautiful" Bill clears key Senate hurdle; Democrats employ delaying tactics; Yemen's Houthis vow to continue attacks against Israel......
[Quick Facts]
1. German Corporate Bankruptcies hit ten-year high in first half of year.
2. Trump's "Big and Beautiful" Bill clears key Senate hurdle; Democrats employ delaying tactics.
3. The United States has reached an agreement with G7 members to establish a "parallel" system to avoid a global tax war.
4. Yemen's Houthis vow to continue attacks against Israel.
5. Japanese poll shows Prime Minister Shigeru Ishiba's cabinet support below 30% for fourth consecutive month.
6. Trump hopes Powell resigns, vows not to appoint Fed Chair who won't cut rates.
7. U.S. firms to gain exemptions from parts of Global Minimum Tax under G7 Deal.
8. Yemen's Houthis vow unabated attacks on Israel.
9. OPEC+ poised for another major output hike in August.
10. April GDP report signals imminent Bank of Canada rate cut.
11. Core PCE inflation edges higher while consumer spending unexpectedly contracts.
[News Details]
German Corporate Bankruptcies hit ten-year high in first half of year
Data recently released by German credit rating agency Creditreform shows that in the first half of this year, the number of corporate bankruptcies registered in Germany reached 11,900, a 9.4% increase compared to the same period last year, reaching the highest level in ten years. Patrik-Ludwig Hantzsch, the agency's economic expert, stated that German companies are facing multiple challenges, including weak demand, rising costs, and uncertainty. He predicts that the number of corporate bankruptcies in Germany will keep growing until the end of this year.
Trump's "Big and Beautiful" Bill clears key Senate hurdle; Democrats employ delaying tactics
On June 28th local time, the US Senate passed a procedural motion by a vote of 51 to 49, aimed at advancing the large-scale tax and spending bill dubbed "Big and Beautiful" by President Donald Trump. Following the passage of this procedural vote, the likelihood of the bill passing within the coming days has increased. It is understood that after this procedural motion is passed, the massive tax and spending bill will undergo recitation, debate, amendment votes, and a final vote, a process expected to take several days. This leaves less than one week before the July 4th deadline set by Trump. Not only did all Democrats vote against the motion, but they also employed delaying tactics. On June 28th, Senate Minority Leader Chuck Schumer stated that Democrats would force the Senate to recite the full 940-page bill. The Hill reported that reciting the bill would take 12 hours.
The United States has reached an agreement with G7 members to establish a "parallel" system to avoid a global tax war
The United States and other G7 members signed an agreement aimed at avoiding a global tax war, proposing the establishment of a "parallel" system to exempt U.S. companies from certain provisions of the existing global agreement. As part of the agreement, U.S. officials agreed to remove provisions from the Trump tax cuts that would increase taxes on income earned by non-U.S. companies and individuals in the United States. This provision, known as Article 899, is referred to as a "retaliatory tax" because it only raises the tax rates on countries that the U.S. government deems to have discriminatory tax policies. The G7 stated on Saturday that this parallel system could "provide greater stability and certainty for the future of the international tax system."
Yemen's Houthis vow to continue attacks against Israel
Yahya Saree, spokesperson for Yemen's Houthi group, declared in a statement on June 28 that the Houthis had launched a "Zolfaghar" ballistic missile at a target in Beersheba, southern Israel, successfully achieving its objective. Additionally, over the past week, the Houthis had repeatedly fired ballistic missiles and drones targeting Israeli locations in Beersheba, Jaffa, and Haifa. Saree emphasized that the group would not abandon its support for the Palestinian people and would continue operations until Israel halts its aggression against the Gaza Strip and lifts the siege. Earlier that day, the Israel Defense Forces (IDF) reported monitoring a missile originating from Yemen, triggering alerts across multiple Israeli regions. The IDF stated the missile was "most likely successfully intercepted".
Japanese poll shows Prime Minister Shigeru Ishiba's cabinet support below 30% for fourth consecutive month
A recent poll in Japan revealed that public support for Prime Minister Shigeru Ishiba's cabinet stands at 24%, remaining below 30% for the fourth consecutive month. In Japanese politics, a cabinet approval rating below 30% is viewed by public opinion as entering the "danger zone," while a drop below 20% is considered the "resignation zone." According to Japanese media analysis, if the current governing coalition fails to secure a majority in the July 20th House of Councillors election, Ishiba may lose his position as Prime Minister.
Trump hopes Powell resigns, vows not to appoint Fed Chair who won't cut rates
Last Friday, U.S. President Donald Trump stated he would not appoint anyone as Federal Reserve Chair unless they commit to lowering interest rates beyond current levels. This marks his clearest condition yet for potential candidates to succeed Jerome Powell, making interest rate cuts a non-negotiable requirement for the position.
Trump renewed his attacks on Powell during remarks at the White House, declaring, "I would love it if he resigned, if he wanted to. His performance has been really shoddy." Trump also labeled Powell "a stupid person." With Powell's term expiring in May 2026, Trump has increasingly shifted focus toward potential successors.
In recent weeks, Trump revealed he has three or four candidates in mind and will announce his decision soon. Historically, most Fed chair appointments occur about three to four months before a vacancy. With approximately 10 months remaining in Powell's term, Trump's early nomination push is widely seen as an attempt to undermine Powell's authority, effectively creating a "shadow Fed chair" advocating for divergent policies.
However, Treasury Secretary Bessent, who is considered a potential successor, downplayed the notion of a "shadow chair." Bessent indicated Trump's nomination of the new chair may come in October or November. When asked about reports naming him as a candidate, Bessent said he has "the best job" in Washington and is "happy to do what President Trump wants me to do". Other rumored candidates include National Economic Council Director Hassett, former Fed Governor Warsh, and current Governor Waller.
U.S. firms to gain exemptions from parts of Global Minimum Tax under G7 Deal
According to a Saturday report by the Financial Times, the G7 stated in a declaration that the U.S. and its G7 partners have agreed to support a proposal exempting American companies from certain provisions of the 2021 "global minimum tax". Canada, the current G7 chair, announced in the declaration that a "parallel system" has been established in response to the U.S. government's agreement to repeal Section 899—the retaliatory tax provision—from President Donald Trump's tax and spending bill. U.S. Treasury Secretary Bessent announced the agreement with the G7 on June 26th, noting that the G7's acceptance of partial tax exemptions for U.S. firms comes in exchange for removing Section 899, colloquially known as the "retaliatory tax," from the U.S. "Big and Beautiful" Bill.
Yemen's Houthis vow unabated attacks on Israel
Yahya Saree, spokesperson for Yemen's Houthi group, declared in a statement on June 28 that the Houthis had launched a "Zolfaghar" ballistic missile at a target in Beersheba, southern Israel, successfully achieving its objective. Additionally, over the past week, the Houthis had repeatedly fired ballistic missiles and drones targeting Israeli locations in Beersheba, Jaffa, and Haifa. Saree emphasized that the group would not abandon its support for the Palestinian people and would continue operations until Israel halts its aggression against the Gaza Strip and lifts the siege. Earlier that day, the Israel Defense Forces (IDF) reported monitoring a missile originating from Yemen, triggering alerts across multiple Israeli regions. The IDF stated the missile was "most likely successfully intercepted".
OPEC+ poised for another major output hike in August
OPEC+ will consider extending its significant production increases at next month’s meeting, with Saudi Arabia leading efforts to reclaim market share, according to reports. Eight major OPEC+ members have collectively raised output by 411,000 barrels per day (b/d) monthly over the past three months. Several representatives confirmed these nations are prepared to approve another production hike for August during the July 6th meeting. Despite sluggish demand and ample supply, Saudi Arabia directed OPEC+ to accelerate its planned output restoration, an unexpected reversal that briefly drove oil prices to four-year lows in April.
April GDP report signals imminent Bank of Canada rate cut
TD Securities stated that Canada's April GDP report showing a 0.1% month-over-month decline signals the Bank of Canada (BoC) is poised to cut interest rates again. This view aligns with the central bank's latest meeting minutes, which indicate BoC officials require economic growth to hover near zero before considering further cuts. April's GDP data crossed this threshold, suggesting another contraction likely occurred in May. A second prerequisite—cooling inflation—is also materializing: this week's core CPI edged down slightly, and the BoC will seek further evidence of moderation when June inflation data arrives in July.
Core PCE inflation edges higher while consumer spending unexpectedly contracts
U.S. data released Friday showed the Personal Consumption Expenditures (PCE) price index rose 2.3% year-over-year and 0.1% month-over-month in May. The core PCE index increased 2.68% from a year earlier and 0.2% from the prior month.
Meanwhile, inflation-adjusted consumer spending fell 0.3%—the largest decline since the beginning of this year—indicating growing uncertainty from the Trump administration's economic policies is increasingly weighing on growth prospects. Personal income in May recorded its steepest drop since 2021, mainly due to reduced government transfer payments. However, wages rose 0.4% for the second consecutive month, extending recent solid gains. This suggests consumers retain their capacity to keep spending, though the savings rate plunged to 4.5%.
Following the PCE release, market expectations for Fed rate cuts saw minimal shifts. According to the CME FedWatch Tool: The probability of holding rates steady in July is 77.3% (previously 79.3%). The probability of a 25-basis-point cut in July is 22.7% (previously 20.7%). The probability of holding rates steady in September is 8.1% (previously 8.2%). The probability of a cumulative 25-bp cut by September is 71.6% (previously 73.3%). The probability of a cumulative 50-bp cut by September is 20.4% (previously 18.5%).
[Today's Focus]
UTC+8 14:00 Germany May Retail Sales (MoM)
UTC+8 20:00 Germany June CPI
UTC+8 22:00 Speech by Bostic, President of the Federal Reserve Bank of Atlanta
Risk Warnings and Disclaimers
You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.
