#ECB sentiment moved a bit hawkish during the presser, leading traders to scale back their expectations for rate cuts this year. Markets now anticipate only 19bps of easing for the rest of the year.

#ECB leaves its key deposit rate unchanged at 2% as expected. ECB not pre-committing to a particular rate path. Will follow a data-dependent, meeting-by-meeting approach. Says domestic price pressures have continued to ease, and wages are growing more slowly. The economy has so far proven resilient overall.

OOPS! German business activity continued to grow marginally in July, though at a slightly slower pace than in June. The German flash composite PMI fell to 50.3 points in July, down from 50.4 in June and below the 50.7 forecast in a Reuters poll.

Good Morning from #Germany, where consumer confidence is slipping due to ongoing economic uncertainty and frustration w/the new political coalition. The GfK consumer climate index dropped for the 2nd straight month, falling to -21.5 in the Aug forecast – down 1.2 points from Jul. The survey shows that Germans are remaining cautious w/their money, preferring to save rather than spend on big-ticket items. In fact, the propensity to save just hit its highest level since Feb 2024.

German benchmark index Dax jumps in AH trading after headlines the EU and the US are progressing toward an agreement that would set a 15% tariff for most products. Member states could be ready to accept a 15% tariff and EU officials are pushing to have that cover sectors including cars. Steel and aluminum imports above a certain quota would face the 50% duty. (via BBG)

OUCH! #Japan’s 10y bond yields have jumped to their highest level since 2008, driven by growing fiscal concerns. The spike came after President Trump announced a trade deal w/Japan. It appears Japan may be covering part of the cost of US car tariffs by using its own investment funds–essentially a partial bailout to smooth the deal.

Good Morning from Germany, where auto stocks are rallying on hopes that Europe can secure a trade deal w/the US similar to Japan’s. Under the new US-Japan agreement, all Japanese imports — incl cars — will face a flat 15% tariff. That’s good news for Japanese carmakers, as it allows them to avoid the higher, sector-specific 25% tariff on vehicles. European automakers are now hoping for a similar deal.

Nikkei jumps and Yen gains as #Japan's assets enjoy relief from US trade agreement. The headline 15% reciprocal tariff is a considerable discount from the 25% in the letter earlier this month. Toyota shares rising as much as 10% after NHK reported the US would impose a tariff rate of 15% on auto imports.

The meme stock frenzy is making a comeback. Retail investors seem to be targeting the most shorted stocks again — one by one. The latest name to catch their attention is Kohl’s (KSS), which now appears to be joining the meme stock rally.

Good Morning from Germany, where annual working hours are among the lowest in the world – and even that might be overstated. On avg, employees take 31 vacation days a year, plus at least 9 public holidays, many of which cluster between Easter and early June when offices are often quiet. On top of that, the avg number of paid sick days has risen to ~15 per year, up from 10 in 2015.