Good afternoon, friends. After a rocky few days, it seems things are starting to return back to normal, just in time for the weekend.

THE BIG STORY TODAY

Annual headline urban inflation fell to 14.9% in June, from 16.8% in May, ending three consecutive months of rising inflation, according to data from state statistics agency Capmas. On a monthly basis, inflation contracted by 0.1% compared to an increase of 1.9% in the previous month.

Driving the decline: Food and beverages prices, the largest component of the basket of goods and services used to calculate headline inflation, rose 6.9% y-o-y compared to 11.0% in May. On a monthly basis, food and beverage inflation decreased 1.2%.

“June inflation came significantly lower than our estimate of 16.6% y-o-y and lower than Reuters’ median poll estimate of 16.2% y-o-y,” HC Securities’ Heba Monir told us. She added that the drop in food and beverage prices came in well below the firm’s forecast of a 2.1% m-o-m increase.

June’s figures come a day ahead of the central bank’s Monetary Policy Committee (MPC) meeting tomorrow to review interest rates. A slim majority of analysts we surveyed expect the MPC to keep interest rates unchanged. The slowdown in June’s reading “supports our non-consensus view that the CBE will cut interest rates tomorrow,” Capital Economics’ James Swanston said in a research note.

Trading resumed on the EGX this morning after a full-day suspension yesterday that was prompted by a power outage and internet disruption following a fire at Telecom Egypt’s Ramses central hub late Monday, the exchange said in a statement during early trade.

The benchmark EGX30 index opened slightly higher, a reassuring sign that investors are staying calm. The market seems to be quietly catching up on what was missed during the downtime, with no signs of panic. The modest gain reflects a sense of relief, and things now appear to be running smoothly again.

DATA POINT- The EGX30 ranged between an intraday high of 33.4k and a low of 32.9k points before closing up 0.35% at 33k, and 11.5% YTD.

THE BIG STORY ABROAD-

Tariffs are in the spotlight once again: The EU is scrambling to finalize a trade agreement with the US that would subject it to higher tariffs than those imposed on the UK, marking a significant diplomatic setback for Brussels, the Financial Times reports. While EU negotiators are reportedly preparing to ink a temporary framework agreement that sets reciprocal tariffs at 10% — on par with the baseline duty on British goods — it is unlikely to receive the same preferential rates given to the UK in May for key sectors like steel and automotive exports.

Where does that leave the EU? US President Donald Trump is pushing for a 17% tariff on EU agrifood products as part of the framework agreement, which could be finalized within days. If no agreement is reached by the 1 August deadline for reciprocal tariffs, levies on EU exports could jump to either 20% or 50%. The EU has suspended retaliatory tariffs during the talks but is set to impose counter-tariffs of EUR 21 bn on US exports starting 14 July, with an additional EUR 95 bn awaiting member state approval.

The bloc didn’t play its cards right, some business leaders and EU officials say, criticizing Brussels’ approach for being overly complicated compared to Britain’s more pragmatic business-focused negotiations.

☀️ TOMORROW’S WEATHER- Cairo’s sunny streak continues tomorrow, with the mercury set to peak at 38°C, before dropping to 23°C at night. North Coast dwellers should expect cooler temperatures, peaking at just 28°C before dropping to 25°C, according to our favorite weather app.