Daily Pulse

Canada

The Bank of Canada considered cutting interest rates at its last meeting, but trade uncertainty and sticky core inflation compelled officials to hold borrowing costs steady. Policymakers discussed a quarter percentage point cut at their July meeting, but the ongoing trade dispute with the US, the resilience of the Canadian economy and mounting risks to inflation ultimately led the bank’s governing council to keep the policy rate at 2.75% for a third consecutive meeting.

United States

US short-dated bonds yields are near their lowest level in more than three months, reflecting conviction among traders that the Federal Reserve will cut interest rates next month. The two-year yield, among the most sensitive to changes in monetary policy, was trading around 3.67% on Thursday. It has slumped nearly 30 basis points since the end of July, with much of the move following weaker-than-expected payrolls data.  The gains have been underpinned by expectations that Fed officials will lower borrowing costs for the first time this year at their September meeting — a move that Trump has repeatedly demanded.

The Port of LA said it handled the highest container volume in its 117-year history last month, as uncertainty over Trump’s tariffs drives shippers to front-load cargoes. Already the busiest port in the country, LA moved more than  1 million twenty-foot equivalent units (TEUs) in July, an 8.5% increase from a year ago, the operator said on Wednesday. That includes containers entering and exiting its terminals, with loaded imports rising by a similar percentage to nearly 544,000 TEUs. The total volume handled was 14.2% higher than in June.The spike was due to traders rushing to front-load their cargo to be able to reach US stores before Trump’s import duties take effect, said the port’s Executive.

Deere again pared its outlook for full-year net income as growers are yet to start spending with grain prices under pressure. DE estimated 2025 net income between $4.75 billion and $5.25 billion. That’s down from a forecast in May for between $4.75 billion and $5.50 billion, and compares to a Bloomberg estimate for $5.08 billion. Shares fell about 4.6% before the start of normal trading in New York. The farm-machinery sector has been expected to bottom outthis year but a record American corn harvest and uncertain crop demand amid President Donald Trump’s trade wars is injecting uncertainty into that timeline.

Europe

The Swiss government met with executives of Roche Holding AG and Novartis AG to discuss the pharmaceutical industry’s situation in light of US tariffs. Switzerland was hit with a 39% tariff rate by the US this month, far higher than the 15% levied on the neighboring European Union. Pharmaceuticals are currently exempt from Donald Trump’s tariffs, but that might soon change, with the president warning he could announce measures on the sector.

Growth in the Russian economy is stalling. Oil revenues have slumped. The budget deficit has widened to the largest in more than three decades. Inflation and interest rates remain painfully high. Behind the walls of the country’s banks, some insiders are sounding alarms about a looming debt crisis. That’s the tense backdrop against which Russian President.

Asia

Hon Hai Precision Industry Co. expects sales of servers to more than double this quarter while its consumer electronics business dwindles, underscoring how it’s relying on the AI boom to offset volatile iPhone sales. Hon Hai, which assembles Nvidia Corp. servers and Apple Inc. gadgets, posted a better-than-projected 27% rise in net income in the June quarter. It predicted a 170% rise in revenue from servers made for artificial intelligence tasks during the current three-month period. But executives warned the smart consumer electronics business, which faces potential US tariffs, should shrink this year.

China is preparing to mobilize companies owned by the central government in Beijing to purchase unsold homes from distressed property developers, following the limited success of a previous initiative that relied on local governments, according to people familiar with the matter. Regulators are planning to ask some of the biggest state- owned enterprises and bad-debt managers including China Cinda Asset Management Co. to help clear the housing glut, said the people, asking not to be identified discussing a private matter. The firms will be allowed to tap 300 billion yuan ($41.8 billion) of funding that the central bank earmarked for the program last year, one of the people said. The renewed effort, which is still under discussion, could help speed up the clearance of China’s 408 million square meters of excess inventory - larger than the size of Detroit - and ease the financial burden of the troubled developers.

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