(The opinions expressed here are those of the author.)

By Lucy Raitano

LONDON, July 8 (Reuters) - A look at the day ahead in

U.S. and global markets by EMEA Breaking News Markets

Correspondent, Lucy Raitano.

U.S. President

Donald Trump

has issued

14 letters

to global trade partners laying out

sharply higher tariffs

and a new deadline of August 1.

Among the recipients are major U.S. trade partners

Japan

and South Korea, as well as other players like Thailand and

Malaysia.

It is the latest gyration in a global trade war unleashed by

Trump in April that sent countries scrambling to cushion their

economies as they hashed out potential trade deals with the U.S.

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

next week, 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. President Donald Trump on Monday ramped up his trade war

telling 14 nations, from powerhouse suppliers such as Japan and

South Korea to minor trade players, that they now face sharply

higher tariffs from a new deadline of August 1.

* Developing nations at the BRICS summit on Monday brushed away

an accusation from President Trump that they are

"anti-American," with Brazil's president saying the world does

not need an emperor.

* China warned the Trump administration on Tuesday against

reigniting trade tension by restoring tariffs on its goods next

month, and threatened to retaliate against nations that strike

deals with the United States to cut China out of supply chains.

* President Trump, hosting Israeli Prime Minister Benjamin

Netanyahu at the White House on Monday, said the United States

had scheduled talks with Iran and indicated progress on a

controversial effort to relocate Palestinians out of Gaza.

* Saudi Arabia's drive to rapidly increase OPEC+ oil output may

put Riyadh in the pole position to regain market share today

while also solidifying its dominance over the long term, says

ROI energy columnist Ron Bousso.

* In his latest piece, ROI columnist Clyde Russell discusses the

lack of volatility in iron ore prices so far in 2025, despite

the ongoing uncertainty surrounding the tariff policies of U.S.

President Donald Trump and the impact these will have on global

trade and economic growth.

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Aside from an initial drop in U.S. stocks on Monday after

the latest ratcheting-up of Trump's trade war, traders seem to

be taking the threat of sharply higher tariffs in their stride.

By and large, it's been business as usual on Tuesday for

markets, now well-versed in the nebulous and fast-changing trade

policy approach the U.S. has adopted under Trump's leadership,

and particularly since his fateful April 2 "Liberation Day"

announcements.

The initial deadline of July 9 has been replaced by August

1, providing some breathing room.

S&P 500 futures are barely in positive territory, while

Europe's benchmark STOXX 600 was pretty flat for most of the

European morning.

Even the VIX volatility index is down a touch, having

remained largely range-bound for the past two months.

One area still sensitive to the twist and turns of Trump's

tariffs, however, is gold, which has soared to an all-time high

in 2025 as traders hedged against trade policy uncertainty.

So while the rest of the market yawns at the latest

see-sawing in Trump's global trade war, is the yellow material

one area where stronger views - and bigger price swings - could

materialise?

Citi analysts warn that with no big trade war and U.S.

economic data continuing to remain robust, gold could drop a

steep 20% from current levels of around $3,300 an ounce. But

even that decline would keep the price of gold a sliver above

where it started the year.

Other analysts remain bullish on the precious metal as a hedge

given high geopolitical risks and a general move to diversify

away from U.S. assets.

One segment of the market that did not hit the snooze button on

Tuesday are European spirit makers, up after daily Italian

newspaper Il Messaggero reported there is a possibility wines

and alcohol could be completely excluded from tariffs, amid

EU-U.S. trade negotiations.

With Remy Cointreau, Campari and Pernod Ricard up between

1.7% to 3.4%, it might be worth keeping an eye on U.S. peers for

some read-across.

The euro is maintaining its position as a beneficiary of the

trade war, up 2% against the U.S. dollar in the past two weeks

and rising 0.3% on Tuesday against a faltering dollar. Markets

think the European Union is likely to dodge the latest round of

Trump's trade threats. So far, so good.

Even the global recession fears which flared up at the

prospect of a worsening trade war have largely receded, and with

the U.S. employment picture holding up and markets anticipating

Federal Reserve rate cuts on the horizon, it will take more than

a few strongly-worded letters to rattle investors.

Chart of the day

The price of gold is up 26.6% in 2025, soaring past the key

psychological threshold of $3000 dollars per ounce in March 2025

as traders hedged against tariff uncertainty, while increased

geopolitical risks and a move away from U.S. assets by big

investors and central banks pushed prices higher.

Today's events to watch

* Auction sale of 3-year notes

* NY Federal Reserve consumer inflation expectations for

June

* U.S. consumer credit data for May

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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