(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Amanda Cooper

LONDON, July 2 (Reuters) - What matters in U.S. and

global markets today

Global stocks are tiptoeing higher, while the U.S. dollar

continues to struggle at three-year lows against a basket of

currencies. Federal Reserve Chair Jerome Powell says the central

bank is in no rush to raise rates - despite pressure from

President Donald Trump. With a week to go until the July 9

deadline tariffs and a raft of key employment data in the next

two days, market activity is, for the most part, pretty subdued

for now.

Mike Dolan is enjoying some well-deserved time off over the

next two weeks, but the Reuters markets team is here to provide

you with all the information you need to start your day.

Today's Market Minute

* U.S. Senate Republicans passed President Donald Trump's

massive tax-cut and spending bill on Tuesday by the narrowest of

margins. The legislation now heads to the House of

Representatives for possible final approval, though a handful of

Republicans there have already voiced opposition to some of the

Senate provisions.

* The Iranian military loaded naval mines onto vessels in the

Gulf last month, a move that intensified concerns in Washington

that Tehran was gearing up to blockade the Strait of Hormuz

following Israel's strikes on sites across Iran, according to

two U.S. officials.

* The United States could reach a trade deal with India that

would help American companies compete in the South Asian country

and leave it facing far lower tariffs, President Donald Trump

said on Tuesday, while casting doubt on a possible deal with

Japan.

* A core tenet of sovereign debt investment is that strong

institutions keep down a country's borrowing costs and vice

versa. So then why, ask professors Ugo Panizza and Mitu Gulati,

has the bond market's response to U.S. President Donald Trump's

institutional norm-busting been so tame?

* It's easy to come up with reasons to be bearish about U.S.

equities given elevated valuations and the uncertainty

surrounding the country's economic outlook. But Stephanie Guild,

Chief Investment Officer of Robinhood Markets, claims there is a

positive trend cutting across all this negativity: capital

expenditure growth.

Deadline? What deadline?

Blink and you'll miss it. Two weeks ago, markets were fretting

about the prospect of all-out war in the Middle East, as Israel

and Iran bombed one another. One week ago, global markets were

rallying in relief as the oil price cratered following the U.S.

attack on Iran's nuclear facilities, and a fragile ceasefire

that appeared to be holding.

Now, with a week to go until Trump's July 9 deadline on tariffs,

markets have moved on to how long Federal Reserve Chair Jerome

Powell can resist pressure from the president to cut interest

rates.

Markets are already preparing for a Trump loyalist to replace

Powell when his term expires next May. Almost four quarter-point

cuts over the next year are now priced into the equation in

2026, up from closer to three just a month ago.

Investors have largely expressed their views on tariffs

through the currency market and, as far as forex is concerned,

July 9 is shaping up to be just another day at the office.

Implied currency options volatility - a measure of demand

from traders to buy protection against large price swings -

surged in early April, when Trump unveiled his raft of tariffs

on practically every country on the planet, and continued to do

so even after he'd hit the pause button on April 9, peaking

shortly afterwards.

Since then, volatility has subsided, whether for stocks,

bonds or currencies, as investors have become more immune to the

president's on-again-off-again approach to trade policy.

And that's no surprise. Having said he would secure 90 deals in

90 days, so far there is just one fairly limited deal in the

bag, with the UK.

In fact, Trump's to-ing and fro-ing on tariffs has been so

frequent, it's given rise to the acronym TACO, which stands for

"Trump Always Chickens Out", something many investors now factor

in when placing trades.

Last Friday, Trump said the July 9 deadline was not fixed. "We

can do whatever we want," he told reporters at the White House.

Then, on Tuesday, he said he wasn't thinking of extending it at

all, mentioning Japan as his latest bugbear.

In the face of such dizzying switches, forex traders are

assuming there will ultimately be some kind of market-soothing

pause, reversal, compromise or general can-kicking while the

U.S. administration attempts to hash out agreements.

Implied volatility for euro options expiring on July 9 is

around 8.5%, very much in line with its recent range. For

comparison, a month ago, the one-month options - which then

expired on July 9 - were at exactly this level, while two-month

options two months ago were above 9%. Back in early April, at

the time of the pause, three-month euro implied volatility

topped 10%.

The pattern is virtually identical for all the major

currencies that are exposed to tariffs, including the Canadian

dollar, Japanese yen and Mexican peso.

It's not just currencies either. The VIX volatility index,

known as Wall Street's "fear index", has been trading below the

attention-grabbing 20 mark, for much of the last two months

following a spike to 60 in early April.

Drilling down, weekly VIX futures that expire on July 9 have

drifted into "sanguine" territory, at around 18.65 from a peak

above 20 in mid-June, when Israel/Iran hostilities boiled

over.

In the run-up to Liberation Day, the weekly VIX futures

contract that expired on April 2 hit a top of around 25.

Central bankers, major asset managers, private equity

giants, politicians, the heads of the world's largest companies

and just about everyone has cited tariffs as the biggest

uncertainty facing the world right now.

As always with markets, someone will be right and someone

will be wrong. There is still some time to go before July 9.

Chart of the day

The monthly ADP private payrolls report is due later in the

day and, based on a survey of economists by Reuters, is expected

to have risen by 95,000 in June, up from May's three-year low of

37,000, but below June 2024's 150,000 rise.

The ADP report usually lands two days before the more

comprehensive monthly non-farm payrolls report and, although

there is no correlation between the two, investors inevitably

use ADP as some form of steer on what to expect from the

upcoming government report.

Since hitting a COVID-era peak of 807,000 in late 2021,

private sector payrolls growth has been moderating.

Today's events to watch

* June ADP payrolls report

* Tesla second-quarter deliveries

* ECB Forum on Central Banking 2025 in Sintra, Portugal

wraps up

* EIA weekly crude inventories

* World UFO Day on the anniversary of the Roswell incident

Opinions expressed are those of the author. They do not reflect

the views of Reuters News, which, under the Trust Principles, is

committed to integrity, independence, and freedom from bias.

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(By Amanda Cooper; Editing by Anna Szymanski.)