Headlines:
Japanese yen holds firmer as traders digest Japan electionEuropean equities lack appetite to start the week, eyes on US-EU trade talks stillBitcoin consolidates above key levels as the bullish momentum stallsUS Treasury secretary Bessent says quality of trade deals are more important, not timingDoes Japan’s latest political shake up impact tariff negotiations?Japan’s Ishiba says want to speak with Trump at earliest date to seek solution on tradeEU says still prioritising a negotiated solution with the US over tariffsWhat are the interest rates expectations for the major central banks?ECB Survey: 1 year ahead inflation expectations fall to 2.5% vs 2.9% priorICYMI: China left key lending rates unchanged in latest policy decision todaySNB total sight deposits w.e. 18 July CHF 475.3 bn vs CHF 464.1 bn prior
Markets:
JPY leads, USD lags on the dayEuropean equities slightly lower; S&P 500 futures up 0.2%US 10-year yields down 5.7 bps to 4.373%Gold up 0.7% to $3,371.79WTI crude up 0.1% to $67.47Bitcoin up 1.0% to $118,439
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The European session today was a slower one with markets keeping the calm as the major focus stays on trade developments ahead of the 1 August deadline. Some late headlines from US Treasury secretary Bessent is suggesting that the can might be kicked down the road again, and that’s weighing on the dollar a little with the greenback already seen somewhat softer during the session.
The Japanese yen is the standout though, opening with a gap higher after the election results over the weekend. Japan’s ruling coalition lost majority of the upper house of parliament for the first time since 1955 and that’s putting the yen up in front, at least for now.
USD/JPY pared early losses to 148.20 in late Asia trading but has now dropped back to fresh lows on the day of 147.50 levels. And that also owes in part to the dollar’s drop in the past hour. Meanwhile, EUR/USD climbed from 1.1630 to 1.1660 while GBP/USD is seen up 0.5% to on the day to 1.3470 currently.
In the equities space, the mood music is fairly mixed. European indices are seen more sluggish as trade talks between the US and EU continue to stall for now. Italy’s benchmark index is the laggard after Stellantis posted a first half net loss of €2.3 billion as tariffs begin to bite.
As for US futures, things are calmer with S&P 500 futures seen up 0.2%. Tech shares are still pulling their weight with eyes on Google/Alphabet and Tesla earnings later in the week.
In other markets, gold is also nudging higher as it moves up to $3,371. However, cryptocurrencies continue to be the standout as Bitcoin continues to flirt with a potential firm run above $120,000 while Ethereum is not letting up in its surge towards $4,000 next. The latter has seen nearly 50% gains now in the past two weeks as things continue to run hot. 🔥
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This article was written by Justin Low at investinglive.com.