The International Monetary Fund has warned that Europe's sovereign debt could become unsustainable if public finances are not addressed, citing challenges such as an aging population, energy transition and rearmament. The IMF estimates that public spending will increase by nearly 5% of total output by 2040, potentially raising public debt to 130% of GDP. The fund recommends a strategic approach combining reforms, fiscal consolidation and a reassessment of public services.

European companies are expected to report their strongest profit growth in three years this quarter, driven by oil majors, banks and AI-related firms. Analysts have raised earnings-per-share estimates, predicting an 11.5% aggregate earnings gain for MSCI Europe index members. The energy sector is expected to account for half of the anticipated growth, while banks and companies benefiting from AI are also expected to perform well.

Singapore's economy grew 5.7% in the second quarter, topping expectations as manufacturing strength offset slower services growth. The data showed resilience despite Middle East tensions, but economists expect momentum to moderate as high base effects, elevated energy prices and the central bank's upcoming policy decision keep risks in focus.

Indonesia expects S&P Global Ratings' decision to maintain its investment-grade rating and stable outlook to support confidence in the government bond market after a June sell-off. Analysts said the affirmation is a positive catalyst, though yields may remain sensitive to oil-driven inflation risks, rupiah stability, fiscal execution and Bank Indonesia policy.

Bank of Korea is expected to raise rates on July 16 for the first time in more than three years as inflation, housing prices and household debt remain elevated. A Reuters poll showed economists expect the BOK to lift its base rate to 2.75% this week and raise it again to 3% by year-end, with won weakness and high oil prices adding to policy pressure.

China's exports rose 27% in June, beating forecasts as demand for technology products including AI and robotics helped sustain trade momentum despite global tensions. Imports climbed 36%, lifting the monthly trade surplus to $125.62 billion from $105.43 billion in May.

US Federal Reserve Vice Chair for Supervision Michelle Bowman has urged the Financial Stability Board to remain flexible in its oversight, warning that strict rules could undermine the international watchdog's effectiveness. Speaking at a Bank Policy Institute conference, Bowman highlighted the US' commitment to baseline standards while noting that regulators should focus on core financial risks. Bowman also emphasized the importance of modernization in regulation to address emerging risks and promote innovation.

Major US banks face a new Basel III capital charge on undrawn credit facilities that can be unconditionally canceled, a change that could raise costs across fund finance, credit cards and other lending businesses. The requirement surprised banks despite a broader March 2026 redraft that softened the capital impact of earlier proposals.

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