Eurozone inflation rose to 2.0% in June, meeting the ECB’s target, while core inflation held steady at 2.3% and services inflation edged up to 3.3%, reflecting persistent price pressures. Despite Germany’s softer inflation, the ECB is likely to keep rates unchanged in July, with President Lagarde emphasizing vigilance due to risks like U.S. tariffs. A stronger euro, lower energy prices, and easing wage growth may pave the way for a rate cut later this year, contrasting with markets expecting more aggressive Fed cuts, boosting euro bullishness.

Japan’s June Consumer Confidence Index rose to 34.5, surpassing expectations and marking a second month of gains, signaling a broadening economic recovery alongside positive manufacturing sentiment from the Tankan survey. Despite looming 25% auto tariffs, the weak yen at 144 supports Japan’s auto exports, while large firms plan an 11.5% capex increase, bolstering GDP growth. However, markets remain skeptical about a near-term Bank of Japan rate hike, and with Trump’s July 9 tariff deadline approaching, Japan faces pressure to secure a favorable trade deal amid threats of higher duties and tensions over U.S. rice exports, especially with a national vote on July 20.

Australia’s retail sales and household spending data, due today and July 4, could confirm expectations for an RBA rate cut on July 8, with markets pricing in three additional cuts this year to a terminal rate of 3.10%, though some economists predict 2.85%. Despite this, the Australian dollar holds strong against the U.S. dollar, driven by expectations of the Fed’s easing cycle resuming and a positive market mood fueled by easing Middle East tensions and optimism for new U.S. and global trade deals.