Story of 6 key macro signals for the week to July 12, 2025

15 Jul 2025 , 11:17 AM

FED MINUTES, RECIPROCAL TARIFFS SCRIPT WEEKLY STORY

Fed minutes announced last week made it clear that FOMC members were not keen on any immediate cut in interest rates. While 2 rate cuts in 2025 are still on the cards, they are likely to happen after September. That led to a spike in US bond yields.

Uncertainty over the reciprocal tariffs continued with the cut-off date being pushed back to August 01, 2025. However, Trump does not look like relenting on reciprocal tariffs, and intends to penalize countries that continue to buy oil from Russia; like India and China.

• US BOND YIELDS RALLY AFTER FED MINUTES

The table captures US 10-year benchmark bond yields over the last 5 trading sessions.

Date	Price (%)	Open (%)	High (%)	Low (%)
Jul 11, 2025	4.416	4.358	4.427	4.340
Jul 10, 2025	4.349	4.336	4.376	4.322
Jul 09, 2025	4.334	4.401	4.423	4.334
Jul 08, 2025	4.404	4.385	4.435	4.377
Jul 07, 2025	4.382	4.326	4.399	4.322
Jul 04, 2025	4.328	4.324	4.340	4.304

Data Source: Bloomberg

The bond yields at 4.416% saw a sharp spike during the week after the Fed minutes underlined that any rate cuts would be back-ended. The FOMC continues to be wary of the inflationary impact of tariffs, as and when implemented. The possible OBBBA impact on the US Budget Deficit has also been pushing up the bond yields of late. Last week, US 10-year bond yields touched a high of 4.427% and a low of 4.322%.

• US DOLLAR INDEX (DXY) GAINS GROUND IN THE WEEK

Here is the US dollar index (DXY), an index of dollar strength, over last 5 trading sessions.

Date	Price (%)	Open (%)	High (%)	Low (%)
Jul 11, 2025	97.85	97.57	97.96	97.56
Jul 10, 2025	97.65	97.44	97.92	97.27
Jul 09, 2025	97.56	97.55	97.75	97.46
Jul 08, 2025	97.52	97.36	97.84	97.18
Jul 07, 2025	97.48	96.96	97.67	96.89
Jul 04, 2025	96.96	97.09	97.18	96.86

Data Source: Bloomberg

The US dollar index (DXY) closed higher for the week at 97.85. The dollar has shown strength after the Fed minutes put off rate cuts to September 2025 and beyond. Also, it is now evident that the impact of tariffs on inflation, growth, and jobs has been very limited. Last week, the US dollar index (DXY) touched a high of 97.96 and a low of 96.89. However, this looks more like a dead-cat bounce after the sharp fall.

• INDIA BENCHMARK BOND YIELDS EDGE HIGHER

The table below captures 10-year India bond yields for the last 5 trading sessions.

Date	Price (%)	Open (%)	High (%)	Low (%)
Jul 11, 2025	6.300	6.318	6.334	6.301
Jul 10, 2025	6.310	6.316	6.321	6.309
Jul 09, 2025	6.310	6.315	6.316	6.309
Jul 08, 2025	6.300	6.295	6.307	6.293
Jul 07, 2025	6.290	6.295	6.297	6.287
Jul 04, 2025	6.290	6.287	6.304	6.287

Data Source: RBI

India bond yields continue to be in a tight range of 6.29%-6.31%; although yields did edge up this week. With RBI shifting its stance from accommodative to neutral; more rate cuts may be off the agenda for now. Markets are betting on one likely rate cut in August. Last week, India 10-year bond yields touched a high of 6.334% and low of 6.287%.

• RUPEE WEAKENS AMIDST DOLLAR INDEX STRENGTH

The table captures the official USDINR exchange rate for last 5 trading sessions.

Date	Price (₹/$)	Open (₹/$)	High (₹/$)	Low (₹/$)
Jul 11, 2025	85.825	85.735	85.921	85.690
Jul 10, 2025	85.749	85.715	85.766	85.533
Jul 09, 2025	85.680	85.760	85.932	85.637
Jul 08, 2025	85.760	85.778	85.835	85.632
Jul 07, 2025	85.760	85.575	86.043	85.575
Jul 04, 2025	85.497	85.480	85.535	85.307

Data Source: RBI

This week, the USDINR weakened from ₹85.49/$ to ₹85.83/$; but it did cross the 86 mark this week, before closing at ₹85.83/$. The dollar index strength and Brent Crude above $70/bbl put pressure on the Rupee. In addition, oil companies bought dollars to hedge exposures. Last week, USDINR touched a high of ₹85.533/$ and a low of ͅ₹86.043/$.

• BRENT CRUDE GETS BACK ABOVE $70/BBL

The table captures the Brent Crude prices over last 5 trading sessions.

Date	Price ($/bbl)	Open ($/bbl)	High ($/bbl)	Low ($/bbl)
Jul 11, 2025	70.36	68.84	70.71	68.55
Jul 10, 2025	68.64	70.06	70.48	68.54
Jul 09, 2025	70.19	69.92	70.71	69.61
Jul 08, 2025	70.15	69.50	70.68	69.03
Jul 07, 2025	69.58	67.64	69.94	67.22
Jul 06, 2025	67.78	67.50	67.96	67.50
Jul 04, 2025	68.30	68.85	68.89	67.75

Data Source: Bloomberg

While higher supplies from OPEC Plus did put pressure on oil prices, it managed to brush that aside and focus on demand build-up. Brent crude closed above $70/bbl after almost two weeks. Last week, Brent Crude prices touched a high of $70.71/bbl and a low of $67.22/bbl. However, excess supply may be an overhang.

• SPOT GOLD HAS A LACKLUSTER WEEK

The table captures the international spot prices of gold in dollars per troy ounce (oz).

Date	Price ($/oz)	Open ($/oz)	High ($/oz)	Low ($/oz)
Jul 11, 2025	3,355.91	3,325.63	3,368.89	3,321.37
Jul 10, 2025	3,323.07	3,313.70	3,330.47	3,310.23
Jul 09, 2025	3,313.72	3,298.73	3,317.05	3,282.80
Jul 08, 2025	3,300.70	3,335.99	3,345.94	3,287.17
Jul 07, 2025	3,335.61	3,335.95	3,343.29	3,296.41
Jul 06, 2025	3,328.98	3,341.40	3,341.89	3,326.37
Jul 04, 2025	3,336.64	3,326.44	3,345.15	3,323.59

Data Source: Bloomberg

Spot gold prices were above $3,300/oz for better part of the week. BOFA has given a target of $4,000/oz for gold in 2026 on higher US fiscal deficit, and that is possible. During the week, gold touched a high of $3,368.89/oz and a low of $3,282.80/oz.