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News
Wednesday, July 16, 2025
What’s happening: US banks kicked off the earnings season for the second quarter on Tuesday.
What happened: Three of the biggest US banks, JPMorgan Chase, Citigroup and Wells Fargo, released better-than-expected quarterly earnings.
Citi’s stock climbed, while Wells Fargo’s shares tanked on net interest income projections.
How were the results: All three major banks reported growth in investment banking revenue for the second quarter.
Why it matters: US banks started the second-quarter earnings season on a strong note, topping earnings estimates. Investors remained cautious, focusing on net interest income and guidance, exerting pressure on the stocks of several top banks.
Net interest income (NII) measures the difference between the interest revenue a bank earns from interest-bearing assets, like loans, and the interest it pays out on liabilities, such as deposits. Investors closely assess net interest income as it drives a significant share of revenue for banks.
JPMorgan’s NII, excluding markets business, fell 1% year-over-year to $22.8 billion, following interest rate cuts, while its wholesale deposit balances grew, partly offsetting that drop. The bank raised its NII outlook for the full year to $95.5 billion from $94.5 billion.
Wells Fargo also reported a decline in NII and guided to the figure remaining roughly in-line with the previous year’s $47.7 billion. Management lowered their net interest income outlook for the year to $47.7 billion, due to a decline in market-related income.
Citi’s NII jumped 22% within its wealth arm. Citi guided to revenue being near $84 billion, reaffirming the higher end of its previous forecast.
How shares responded: JPMorgan’s shares slipped 0.7% to close at $286.55 on Tuesday, while Wells Fargo’s shares fell 5.5% to settle at $78.86. Citi’s stock gained 3.7% to close at $90.72.
What to watch: Investors will continue monitoring tariff-related news from the US.
Earnings results from other major US banks, including Goldman Sachs, Bank of America and Morgan Stanley, due to be released today, will also remain in focus.
Context: The CAD/USD forex pair edged higher this morning as investors assessed the latest inflation data.
Details: Canada’s annual inflation rate accelerated to 1.9% in June, from 1.7% in the previous month, in-line with market estimates. Despite the rise, the rate remained below the Bank of Canada’s target of 2% for the third month in a row.
The country’s trimmed-mean core CPI, which is the preferred gauge of underlying inflation for the Bank of Canada, was unchanged at 3% in June, sparking speculations that the central bank will maintain its overnight rate at 2.75%.
Meanwhile, Canada’s manufacturing sales contracted 0.9% to C$68.7 billion in May, declining to their weakest level since January 2022. However, the decline was lower than initial projections of 1.3%.
Investors balanced sticky inflation data against the latest weakness in the US dollar due to tariff concerns. Weakness in the US dollar lent support to the CAD/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, slipped to 98.60 this morning.
Higher prices of crude oil, one of Canada’s major exports, provided a further boost to the loonie. WTI crude oil prices surged 0.5% to $66.83 a barrel this morning.
The CAD/USD pair rose to 1.3721 this morning.
What to watch: Investors await the release of economic data on Canada’s housing starts (1615 UAE Time) today. Housing starts in Canada, which fell 0.2% to 279,510 units in May, are expected to decline further to 259,000 units in June.
Other Markets: US trading indices closed mixed on Tuesday, with the Dow Jones index and S&P 500 down by 0.98% and 0.40%, respectively, and the Nasdaq 100 up by 0.13%.
Russia said it needs time to assess the recent announcements made by US President Donald Trump related to Ukraine. The news sent the RUB/USD pair slightly higher in forex trading this morning.
South Korea’s export prices fell 4.5% year-over-year in June, following a 2.6% decline in the previous month, exerting pressure on the KRW/USD forex pair.
Israel’s annual inflation rate accelerated to 3.3% in June, from 3.1% in May. The latest reading coming in higher than market estimates of 3.1% sent the ILS/USD pair lower in forex trading this morning.
Sri Lanka’s manufacturing PMI fell to 51.9 in June, from 55.5 in the previous month, which exerted pressure on the LKR/USD forex pair.
Japan’s Reuters Tankan index for manufacturers edged higher to +7 in July, from +6 in the previous month. However, the JPY/USD pair came under some pressure in forex trading this morning.
Italy’s inflation rate (1200 UAE Time) and balance of trade (1300 UAE Time), Eurozone’s balance of trade (1300 UAE Time), 12-month Bill auction (1410 UAE Time), 3-month Bill auction (1410 UAE Time) and 6-month Bill auction (1410 UAE Time), UK’s Treasury Gilt 2034 auction (1300 UAE Time), Germany’s 30-year Bund auction (1330 UAE Time), South Africa’s retail sales (1500 UAE Time), US MBA mortgage applications (1500 UAE Time), PPI (1630 UAE Time), industrial production (1715 UAE Time), capacity utilization (1715 UAE Time), manufacturing production (1715 UAE Time), EIA crude oil stocks change (1830 UAE Time), EIA gasoline stocks change (1830 UAE Time), EIA Cushing crude oil stocks change (1830 UAE Time), EIA distillate stocks change (1830 UAE Time), EIA heating oil stocks change (1830 UAE Time), 17-week Bill auction (1930 UAE Time) and Fed Beige book (2200 UAE Time), Canada’s 30-year Bond auction (2000 UAE Time), as well as Russia’s PPI (2000 UAE Time).
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