Sentiment from the Asian session carries through into the European trading as optimism does seep through the rough edges of the trade dispute between the U.S. and China. The Shanghai Composite rose 2.2% amid indications that the U.S. and China are willing to resume bilateral negotiations. The U.S. equity futures are close to yesterday’s highs with the European equity market holding some gains in a tight range.

The USDJPY continues to push high while the SEK is weaker because of the CPIF miss. Emerging Market Forex was led higher by the TRY as a new Treasury and Finance minister says the Central Bank of the Republic of Turkey will be more “active” than ever.

The U.S. Treasuries were close to overnight lows as the curve was marginally flatter. The bunds were briefly pushed higher on reports that Trump is considering pulling out of the NATO, however, the move was quickly faded. Brent crude futures were +1.8% after yesterday’s heavy sell-off.

In the key headlines for the European session:

  • China Ministry of Commerce: the U.S. is not in touch with China in regard to renewing trade talks.
  • NATO: reports from the DPA that Trump threatened to pull the U.S. out of NATO are later refuted by Reuters
  • BOE: 2Q defaults on unsecured lending driven by a significant increase in defaults on credit cards.
  • Sweden June CIPF y/y: 2.2% vs 2.3% estimate. Riksbank minutes show concerns that moderate inflation raises questions about the development of inflation in the long run.
  • IEA: OPEC’s Gulf members may need to pump almost as much crude as they can to cover supply losses from Iran and Venezuela.


The U.S. session takes over the European market as investors will have some U.S. Economic data to focus on as well as some different items on today’s agenda. Firstly, the U.S. will be releasing its CPI for the past month as well as the weekly initial jobless claims. In addition to those, the U.S. Treasury will also be offering the 30-year bonds as part its continued effort to raise money.

Fed Speakers are also today with non-voters Minneapolis Fed President Neel Kashkari (dove) and Philadelphia Fed President Patrick Harker (neutral) who are scheduled to speak.

Across the pond, the U.K. will publish a detailed plan for Brexit as the civil war inside of the Tory party continues. This plan will be implemented as Theresa May hopes it is a win as keeps getting shot at from all sides.


Low-volume summer trading in the spot market took over from Wednesday’s positioning adjustments, leaving the major currencies confined to relatively narrow ranges. Reports that the U.S. and China may look to resume trade talks helped keep the dollar firmly supported versus the yen following bullish technical breaks. Equities and commodities took back some of their recent declines, while Treasuries and euro-area bonds edged lower.

EUR/USD – Medium-term picture stays bearish on closes below the 55-DMA, ECB June-meeting high eyed; close above has game-changer potential; 21-DMA in sight.

GBP/USD – Looking for direction; a close above June 22 high needed to establish upside momentum.

USD/JPY – Bullish bias established as trendline resistances give in; nine-day RSI rises to levels associated with corrective pullbacks or sideways trading; close below 111.40 neutralizes momentum.

EUR/JPY – May double-top in focus; failure could see mean reversion; 130.36 pivotal support.

AUD/USD – Resistance ~0.7450 gave in on a closing basis Monday, but Tweezer Top formed Tuesday poses downside risks; 55-DMA defines upside.