Market Highlight 27.06.2025

  U.S Commerce Secretary Howard Lutnick announced that the United States and China have officially signed the trade agreement reached last month in Geneva, while confirming that the White House is currently negotiating similar agreements with 10 major trading partners. However, the viability of the U.S - China accord will depend on both countries’ adherence to its terms, including China’s commitment to the export of rare earth materials. Secretary Lutnick did not disclose which countries will be included in the first group of signatories under the new trade framework, although President D. Trump implicitly identified India as a potential partner during a statement last Thursday. The president also noted that letters will be sent to countries that have not concluded negotiations in the first phase, outlining the terms of trade with the United States. These countries will be placed into appropriate tariff categories after July 9, though extensions may be granted to allow for continued talks.
  The USD fell to its lowest level against the EUR in three and a half years on Tuesday, as markets increasingly priced in the possibility of earlier-than-expected rate cuts by the Federal Reserve. FED Chair Jerome Powell delivered a notably dovish message during his testimony before Congress this week. While reiterating that inflation is likely to pick up during the summer, Powell stated that if price pressures remain contained, the FED would be prepared to cut rates sooner. In response, markets have now priced in nearly a 25% probability of a rate cut in July, up sharply from 13% just a week ago. Expectations for a rate cut in September now stand at 93%.
   Domestically, the USD/VND exchange rate posted its second consecutive daily decline on Tuesday, closing at 26.120 after reaching a session low of 26.105. Although the USD has depreciated sharply in global markets - down 1,4% since the start of the week - its impact on the domestic exchange rate has remained relatively muted, with the USD/VND rate slipping just 0,07%. The exchange rate is expected to edge slightly higher today, trading within the 26.100 - 26.200 range.

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