A look at the day ahead in European and global markets from

Kevin Buckland

U.S. investors may have been feeling good going into the long

Independence Day weekend, but those vibes failed to carry

through to Asia.

Optimism over the resilience of the U.S. economy, after much

more robust than expected monthly payrolls figures, has been

quickly overshadowed by a cloud of uncertainty as U.S. President

Donald Trump's deadline for higher tariff rates looms on July 9.

Despite initial confidence from Trump and his team that there

would be a flurry of deals, an agreement with Vietnam announced

on Wednesday takes the total so far to just three, including

framework agreements with Britain and China.

Trump's approach on tariffs has shifted accordingly: He said

letters will start going out to trading partners on Friday with

the duties they will pay on trade with the United States.

Treasury Secretary Scott Bessent has said a deal with India

is close, but talks with Japan and South Korea - which had been

touted as likely early successes - have been stalled for weeks.

The deal with Vietnam also risks irking China, with its

stipulation of 40% levies on so-called trans-shipments of

products basically made elsewhere (i.e., China) in order to

receive a "Made in Vietnam" sticker.

Some Asian countries may be hoping they've done enough to

address U.S. concerns, and will receive just the baseline 10%

tariff in their letters. Thailand, for example, said today it

"hopes there will be good news" following trade talks with

Washington.

The EU is pushing for an "agreement in principle" ahead of July

9 but, as might be expected from such a sprawling economic bloc,

pleasing all parties will be difficult. Brussels is bracing for

any outcome, including a return to tit-for-tat tariff

escalation.

One point on which European diplomats seem aligned is that

tariff relief needs to be immediate, or any deal is off.

Traders and investors also need to mull the broad and long-term

impact of Trump's sweeping tax-cut bill, now about to become

law, and its potential to swell the deficit by $3.4 trillion by

some estimates.

Global equities, led by Wall Street, may be trading at

all-time peaks, but that could mean there's plenty of room for a

drop back to earth if Trump's trade war turns ugly again.

Key developments that could influence markets on Friday:

- U.S. Independence Day holiday

- Germany industrial orders (May)

- France, Italy, Spain industrial output (all May)

- Germany, France, Italy construction PMIs (all June)

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