Just days after reaching a temporary truce in the U.S.-China trade war, Washington has turned its attention back to the EU. The U.S. Trade Representative has released a $4B list of additional goods that may be targeted with retaliatory tariffs as part of a long-running battle at the WTO over subsidies given to Airbus (OTCPK:EADSY) and Boeing (NYSE:BA). The list, which includes Italian cheese, Scotch whisky, chemicals and metals, adds to products valued at $21B that the USTR had identified in April as facing possible tariffs.

Pullback after record session

U.S. stock index futures edged lower overnight as investors cheered progress in trade talks between Beijing and Washington but kept optimism in check amid a fresh U.S.-Europe tariff dispute. Contracts tied to the DJIA pointed to an opening decline of 50 points, while those linked to the S&P 500 - which hit an all-time intraday high on Monday - as well as the Nasdaq are down 0.2%. Also weighing on sentiment: President Trump announced that any trade deal with Beijing would be "somewhat tilted" in favor of Washington and said Iran was "playing with fire" after the Islamic Republic breached its nuclear deal limit.

OPEC+ extends cuts

Oil prices were on the move again Tuesday, rising modestly in early European trading before worries set in that demand could ease amid hints of a slowdown in the global economy. It follows yesterday's agreement between OPEC members, Russia and other producers, an alliance known as OPEC+, that will extend the group's production cuts of 1.2M barrels per day until March 2020. "I have no doubt in my mind that U.S. shale will peak, plateau and then decline like every other basin in history," Saudi Oil Minister Khalid Al-Falih told reporters. "Until it does I think it's prudent... to keep adjusting to it."

World's largest IPO of 2019

Days after AB Inbev (NYSE:BUD) made its biggest wine acquisition ever - Babe Wine - the alcohol giant is seeking to raise up to $9.8B from a Hong Kong listing of its Asia-Pacific business. It would be the world's largest initial public offering this year and give Budweiser Asia a market capitalization of up to $63.7B. The deal is expected to price in New York on July 11 and the stock will debut in Hong Kong on July 19, according to term sheets seen by Reuters.

Prime investment

Amazon (NASDAQ:AMZN) intends to create 1,800 permanent contract positions this year in France - its largest European market after Britain and Germany - bringing its total number of permanent French staff to 9,300 by end 2019. The U.S. retail giant has been expanding steadily in France where it has 20 sites, including six logistics centers, and has invested over €2B in the country since 2010. That's resulted in a local e-commerce market share of 17.3%, according to Kantar data.

Semiconductor confidence

Chipmaker stocks rose broadly on Monday after a U.S.-Sino trade detente sparked hoped that American companies will resume selling to Huawei. Skyworks Solutions (NASDAQ:SWKS) +6%, Western Digital (NASDAQ:WDC) +4.4%, Broadcom (NASDAQ:AVGO) +4.3%, Micron (NASDAQ:MU) +3.9%, Qualcomm (NASDAQ:QCOM) +1.9%, AMD (NASDAQ:AMD) +2.7% and Nvidia (NASDAQ:NVDA) +1.2%. President Trump said a ban was unfair to U.S. suppliers, who were upset that they could not sell parts and components to the Chinese tech giant without government approval, but didn't mention which U.S. firms could resume supplying Huawei.

Bitcoin slumps under $10K

Undoing some of this year’s epic rally, Bitcoin (BTC-USD) plunged 10% overnight to $9,852, taking down some other large coins like Ether (ETH-USD) and Litecoin (LTC-USD), which fell 6% and 7.4%, respectively. Bitcoin has repeated this pattern before: since January, the crypto has on multiple occasions reached new yearly highs after breaking above the upper band and then backslid sharply. The moves were then followed by new highs after a consolidation phase.

Brexit watchers eye Swiss stock ban

Swiss stocks like Nestle (OTCPK:NSRGY), Roche (OTCQX:RHHBY), Credit Suisse (NYSE:CS) and Novartis (NYSE:NVS) traded without major glitches yesterday as flows shifted to the domestic bourse from EU exchanges following stalled negotiations over a Brussels-Bern economic agreement. A ban from trading on platforms within the bloc means institutional investors must move their business to Switzerland, trade over-the-counter or use some investment banks' own internal trading platforms, called "systematic internalisers." Smaller asset managers without access to exchanges must now use brokers to do so, adding to costs and making trades more complicated.

Impasse at EU meeting

EU leaders are back in Brussels for another crack at choosing a new commission president after failing to reach a decision during almost 20 hours of talks on Sunday and Monday. It still remains unclear how the impasse can be broken, but once that's figured out, the route will be open for choosing the next ECB President, whose current term expires on Oct. 31. Almost all of the final contenders are likely to follow the largely dovish strategies of Mario Draghi, except for perhaps Jens Weidmann, current governor of the Bundesbank.

Back-to-back rate cuts

Australia's central bank has lowered its key rate for the second straight month as it strives to revive a sluggish economy, reduce unemployment and rekindle dormant inflation. The quarter-point cut took cash rates to an all-time low of just 1% and left limited room for more reductions, raising the possibility of unconventional policy easing. It also piles pressure on the newly re-elected Liberal National government to respond with fiscal stimulus of its own, a move that will be applauded by the RBA.

Today's Markets

In Asia, Japan flat. Hong Kong +1.2%. China flat. India +0.4%.
In Europe, at midday, London +0.4%. Paris -0.1%. Frankfurt -0.2%.
Futures at 6:20, Dow -0.2%. S&P -0.2%. Nasdaq -0.2%. Crude -0.1% to $59.03. Gold +0.5% to $1396.20. Bitcoin -10.1% to $9852.
Ten-year Treasury Yield -2 bps to 2.01%

Today's Economic Calendar
Auto Sales
6:35 Fed's Williams Speech
8:55 Redbook Chain Store Sales
11:00 Fed's Mester Speech