- APAC stocks traded mixed as participants reflected on the Trump assassination attempt over the weekend and a slew of Chinese data.
- Chinese GDP and Retail Sales missed forecasts, while House Prices further deteriorated but Industrial Production topped estimates.
- European equity futures indicate a negative open with Euro Stoxx 50 future -0.6% after the cash market closed up by 1.3% on Friday.
- Initial strength in DXY faded, EUR/USD sits on a 1.08 handle, Cable has stalled ahead of 1.30.
- Looking ahead, highlights include EZ Industrial Production, US NY Fed Manufacturing, Canadian Wholesale Trade, Comments from Fed Chair Powell & Daly, Supply from Australia
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US TRADE
EQUITIES
- US stocks finished higher on Friday albeit off their best levels as data releases took centre stage including a hotter-than-expected PPI report which initially spurred a hawkish reaction but was swiftly pared as participants digested the details of the report with analysts at BofA noting that overall, the components of the PPI report that affect the PCE report, were softer. Furthermore, University of Michigan Sentiment disappointed and printed its lowest since November 2023, while both 1-year and 5-year ahead inflation expectations fell to 2.9% from 3.0%.
- SPX +0.55% at 5,615, NDX +0.59% at 20,331, DJI +0.62% at 40,001, RUT +1.09% at 2,148.
- Click here for a detailed summary.
NOTABLE HEADLINES
- A person was killed and two people were wounded in a suspected assassination attempt that took place at a Trump rally in Pennsylvania on Saturday which injured Donald Trump in the ear although Trump was said to be okay. It was later announced that the gunman who was killed by the Secret Service was identified as 20-year-old registered Republican Thomas Matthew Crooks. Furthermore, Trump said that he looks forward to speaking from Wisconsin this week and that it is more important than ever that they stand united.
- US President Biden said he is grateful that Trump is doing well and they had a short and good conversation on Saturday night, while Biden added an assassination attempt is contrary to everything they stand for and there is no information yet of the shooter’s motive.
- US President Biden said need to lower the temperature in politics and that 'we are neighbours, friends, not enemies,' while he added the Trump rally shooting calls for all to take a step back and he was thankful that Trump was not seriously injured.
- FBI Director Wray said they have committed the full force of the bureau to the investigation and that the shooter acted alone, while they have not yet identified an ideology in connection with the suspect. Furthermore, Wray said bomb specialists secured a suspicious device in the suspect’s car and the shooting is being looked at as both a domestic terrorism act and an assassination attempt.
- US House Democrats confronted President Biden directly in a virtual meeting on Friday and told him it was time for someone else to lead, according to Politico.
- Alphabet’s (GOOG) Google is near a USD 23bln deal for cybersecurity start-up Wiz, according to WSJ.
APAC TRADE
EQUITIES
- APAC stocks traded mixed as participants reflected on the Trump assassination attempt over the weekend and a slew of Chinese data including disappointing GDP, Retail Sales and House Prices, while Japanese markets remained closed for Marine Day.
- ASX 200 rose above the 8,000 level for the first time with tech and telecoms leading the gains across sectors.
- Hang Seng and Shanghai Comp. were mixed with the former dragged lower by losses in tech, property and consumer stocks amid mostly weak Chinese data, while the mainland just about remained afloat despite the disappointing releases in which GDP and Retail Sales missed forecasts, while House Prices further deteriorated but Industrial Production topped estimates. Furthermore, the PBoC maintained its 1-year MLF Rate and injected funds through 7-day reverse repos, while top Chinese Communist Party officials kicked off the third plenum.
- US equity futures edged marginally higher as markets digested increased prospects of a Trump victory with weak Chinese data.
- European equity futures indicate a negative open with Euro Stoxx 50 future -0.6% after the cash market closed up by 1.3% on Friday.
FX
- DXY initially strengthened against its major counterparts after odds of a Trump 2.0 Presidency were further boosted over the weekend after he survived a shooting at his Pennsylvania rally which also increased the prospects of higher tariffs, although gains were capped participants now await NY Fed Manufacturing data, as well as comments from Fed Chair Powell and Fed's Daly scheduled later.
- EUR/USD retreated below 1.0900 amid early dollar strength but with downside stemmed ahead of Thursday's ECB meeting.
- GBP/USD marginally softened after recently stalling on approach to the 1.3000 territory, while the focus in the UK this week is on the latest CPI data and the King's Speech on Wednesday.
- USD/JPY traded rangebound on both sides of the 158.00 level amid the absence of Japanese participants.
- Antipodeans saw early headwinds although AUD/USD has since recovered most of the losses amid cross-related flows in which AUD/NZD reclaimed the 1.1100 status.
- PBoC set USD/CNY mid-point at 7.1313 vs exp. 7.2548 (prev. 7.1315).
FIXED INCOME
- 10-year UST futures were pressured amid increased bets of a Trump return to the White House after surviving an assassination attempt over the weekend, as Trump policies are anticipated by banks to result in sticky inflation and higher long-term yields.
- Bund futures followed suit to US peers and gapped lower at the open ahead of German Retail Sales and EU Industrial production.
COMMODITIES
- Crude futures saw two-way price action in which prices initially extended lower following Friday's selling pressure and with mild headwinds after the dollar began the week on the front foot, although oil later managed to recover its losses and then some.
- Iraq’s crude oil production was above the agreed quota by 184k bpd in June, while it will adhere to the required production level in the agreement, which is 4mln bpd, for July and the coming months, according to the Iraqi Oil Minister. Furthermore, the Oil Ministry stated that Iraq will compensate for any overproduction since the beginning of the year during the compensation period that extends until the end of September 2025.
- Kuwait Petroleum Corporation announced a new ‘giant’ oil discovery with oil reserves exceeding 3bln barrels and said the newly discovered oil field’s reserves are equivalent to the country’s entire production in three years.
- Spot gold lacked firm direction with price action rangebound above the USD 2400/oz level.
- Copper futures were indecisive as participants digested a slew of soft Chinese economic data.
CRYPTO
- Bitcoin strengthened throughout the weekend and regained a firm footing above the USD 62,000 level after the Trump assassination attempt boosted the odds for a Trump re-election who is seen as pro-crypto.
NOTABLE ASIA-PAC HEADLINES
- PBoC conducted a CNY 100bln (CNY 103bln maturing) 1-year MLF operation with the rate kept unchanged at 2.50%, as expected.
- China's stats bureau said China's economic operations were generally steady in H1 but the external environment is complex and external demand is still not sufficient, while it added that the economic recovery foundation still needs to be consolidated. The stats bureau also said 5% GDP growth in H1 was 'hard won' and Q2 economic growth was affected by short-term factors such as extreme weather and flooding. Furthermore, it stated the Chinese economy's medium- to long-term improving trend remains unchanged but it faces increasing external uncertainties and many domestic difficulties and challenges in H2, while it noted the property market is still in the process of adjustments.
DATA RECAP
- Chinese GDP QQ SA (Q2) 0.7% vs. Exp. 1.1% (Prev. 1.6%)
- Chinese GDP YY (Q2) 4.7% vs. Exp. 5.1% (Prev. 5.3%)
- Chinese Industrial Output YY (Jun) 5.3% vs. Exp. 5.0% (Prev. 5.6%)
- Chinese Retail Sales YY (Jun) 2.0% vs. Exp. 3.3% (Prev. 3.7%)
- Chinese New House Prices MM (Jun) -0.7% (Prev. -0.7%)
- Chinese New House Prices YY (Jun) -4.5% (Prev. -3.9%)
GEOPOLITICAL
MIDDLE EAST
- Two Egyptian sources said Gaza talks have stopped until the Israeli side demonstrates that it is serious, while a senior source cited by Egypt’s Al Qahera News TV stated that Egypt called for Israel to not obstruct ongoing Gaza ceasefire negotiations and not to put forward new principles that contradict what was previously agreed upon. Furthermore, a senior source claimed Israel is wasting time in formal meetings to lure the Israeli public opinion away from reaching a deal, while a Hamas senior official cited by Al Jazeera said that Hamas awaits a response from mediators on proposals introduced to Israel.
- Israeli strikes on Gaza City killed at least 17 and wounded 50, according to health officials. It was also reported that at least 71 Palestinians were killed and 289 injured in an Israeli attack on Khan Younis which targeted Hamas military chief Mohammed Deif. Furthermore, Hamas said that those killed in Khan Younis were civilians and the attack was a grave escalation, while it added that the attack showed Israel wasn’t interested in reaching a ceasefire agreement.
- Israeli military official said it was still verifying the result of a strike on Hamas military chief Mohammed Deif, while Hamas denied the killing of its top commander. It was later reported that the Israeli military said Khan Younis Brigade commander Rafa Salama was killed on Saturday by the Israeli strike on Gaza and Israel’s military chief said Hamas is trying to hide the results of the strike on its armed wing commander Deif.
- Syrian army said one soldier was killed and three others were injured in Israeli strikes on military sites and a residential building in Damascus.
- Yemen’s Houthis said they conducted military operations in the Gulf of Aden and Israel’s Eilat.
- US State Department announced on Friday new sanctions targeting Iran's chemical weapons research and development.
OTHER
- Kremlin spokesman Peskov said Russia is able to respond to the US deploying long-range missiles in Europe, while he warned that European capitals could be victims of the US placing long-range missiles in Europe, according to TASS.
- Chinese and Russian naval fleets recently conducted the 4th joint sea patrol in the western and northern Pacific Ocean, according to Chinese state media.
- China Maritime Safety Administration issued a navigational warning barring entry into some waters of the South China Sea where military exercises will be held from 12:00 local time on July 16th to 11:00 local time on July 17th.
- North Korean Defence Ministry condemned a joint statement by South Korea and the US on nuclear guidelines, according to KCNA.
EU/UK
NOTABLE HEADLINES
- BoE's Dhingra said on The Rest is Money podcast that demand is too soft for inflation to rise sharply and now is the time to start normalising interest rates so we can finally stop squeezing living standards.
- UK PM Starmer is expected to introduce an AI bill as part of 35 bills to be included in the King’s Speech on Wednesday, according to FT. It was reported by Bloomberg that Starmer will use the upcoming King’s Speech to showcase his government’s efforts to spur economic growth in the UK. Furthermore, the UK government said it will strengthen the role of the Office for Budget Responsibility and enforce new spending rules in the legislative agenda in the week ahead, according to Reuters.
DATA RECAP
- UK Rightmove House Price Index MM (Jul) -0.4% (Prev. 0.0%)
- UK Rightmove House Price Index YY (Jul) 0.4% (Prev. 0.6%)
