- US stocks finished mixed with price action choppy heading into the upcoming risk events and as selling pressures emerged after JOLTS came in above expectations with the prior revised higher and Consumer Confidence also beat expectations, while markets also reflected on the heightened geopolitical tensions after Israel retaliated to the Golan Heights strike in which it targeted a top Hezbollah commander in a Beirut suburb. As such, the major indices were varied and the Nasdaq underperformed as the tech sector was pressured heading into more of the Magnificent Seven earnings.
- USD ultimately returned to flat territory with price action kept within a relatively tight range on the eve of the FOMC and despite better-than-expected US Consumer Confidence and JOLTS job openings data.
- Looking ahead, highlights include New Zealand Building Permits, South Korean Industrial Production, Japanese Industrial Production & Retail Sales, Australian MI Inflation Gauge, Quarterly & Monthly CPI, New Zealand Business Survey, Chinese Official PMIs, BoJ Policy Decision & Governor Ueda's Post Meeting Press Conference.
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LOOKING AHEAD
- Highlights include New Zealand Building Permits, South Korean Industrial Production, Japanese Industrial Production & Retail Sales, Australian MI Inflation Gauge, Quarterly & Monthly CPI, New Zealand Business Survey, Chinese Official PMIs, BoJ Policy Decision & Governor Ueda's Post Meeting Press Conference.
- Click for the Newsquawk Week Ahead.
US TRADE
- US stocks finished mixed with price action choppy heading into the upcoming risk events and as selling pressures emerged after JOLTS came in above expectations with the prior revised higher and Consumer Confidence also beat expectations, while markets also reflected on the heightened geopolitical tensions after Israel retaliated to the Golan Heights strike in which it targeted a top Hezbollah commander in a Beirut suburb. As such, the major indices were varied and the Nasdaq underperformed as the tech sector was pressured heading into more of the Magnificent Seven earnings.
- SPX -0.50% at 5,436, NDX -1.40% at 18,796, DJIA +0.50% at 40,743, RUT +0.40% 2,243.
- Click here for a detailed summary.
NOTABLE HEADLINES
- US VP Harris is to go on a battleground state tour with her VP choice next week, according to Reuters citing sources.
DATA RECAP
- US Consumer Confidence (Jul) 100.3 vs. Exp. 99.7 (Prev. 100.4, Rev. 97.8)
- US Monthly Home Price YY (May) 5.7% (Prev. 6.3%, Rev. 6.5%)
- US CaseShiller 20 YY NSA (May) 6.8% vs. Exp. 6.7% (Prev. 7.2%, Rev. 7.3%)
- US JOLTS Job Openings (Jun) 8.184M vs. Exp. 8.0M (Prev. 8.14M, Rev. 8.23M)
FX
- USD ultimately returned to flat territory with price action kept within a relatively tight range on the eve of the FOMC and despite better-than-expected US Consumer Confidence and JOLTS job openings data.
- EUR saw marginal losses against the greenback but with downside stemmed as support held around the 1.0800 level.
- GBP was pressured although trade remained within the 1.2800 handle amid light pertinent catalysts.
- JPY strengthened as several Japanese press reports noted the BoJ considering raising its short-term interest rate target to around 0.25%.
FIXED INCOME
- T-notes gained with bull steepening seen as heightened geopolitical tensions offset strong economic data ahead of key risk events.
COMMODITIES
- Oil prices were lower amid ongoing China demand woes and despite escalating geopolitical tensions ahead of pivotal risk events.
- US Private Inventory (bbls): Crude -4.5mln (exp. -1.1mln), Distillate -0.3mln (exp. -1.2mln), Gasoline -1.9mln (exp. -1mln), Cushing -0.9mln.
- US reportedly mulls fresh sanctions on Venezuela if President Maduro fails to comply with Washington's demands for greater transparency on the vote count, according to Reuters citing sources, while sanction options include individual sanctions or US travel bans on Venezuelan officials and measures could later escalate to other types of sanctions if deemed necessary.
GEOPOLITICAL
MIDDLE EAST
- Israeli military said it carried out a strike in Beirut in retaliation for the attack on Golan Heights and targeted the commander responsible for the attack.
- Israeli official said they estimate the target of the Beirut suburb attack has been eliminated and confirmation takes time, according to Al Arabiya. Israeli broadcaster Kan also stated the senior Hezbollah commander targeted in the strike was killed, although it was separately reported that two security sources cited by Reuters said the top Hezbollah commander survived.
- Israeli warplanes launched an air strike in the vicinity of the southern entrance in the town of Jibshit in southern Lebanon, according to Sky News Arabia. Israeli army also said it hit around 10 Hezbollah targets in Lebanon and killed one fighter, according to AFP.
- Lebanon’s Foreign Minister said Lebanon condemned the Israeli strike and plans to file a complaint to the United Nations, while the official hopes for a proportionate response by Hezbollah 'so that this wave of killing will stop'.
- Lebanese army reportedly deployed at the attack site in the southern Beirut suburb, according to Al Arabiya.
- Hamas strongly condemned the attack on Lebanon's southern suburb and called it a "dangerous escalation".
- Iran strongly condemned "sinful and cowardly" Israeli aggression that targeted the southern Beirut suburb, according to Iran's Embassy in Lebanon.
- Russia said that strikes on Lebanon are a flagrant violation of international law, according to TASS.
- Israeli office said they are not looking to start a regional war, according to N12 TV.
- White House said the US does not believe war between Hezbollah and Israel is inevitable.
- US announced sanctions targeting Iranian missile and UAV procurement facilitators, according to a statement.
OTHER
- US Deputy Secretary of State Campbell said China and Russia are competing for influence in North Korea.
ASIA-PAC
NOTABLE HEADLINES
- BoJ is reportedly considering raising its short-term interest rate target to around 0.25%, according to NHK, Nikkei and Jiji.
- Japan's new top FX diplomat Minura said will act under internationally agreed commitments on foreign exchange and it has been internationally agreed that measures including interventions are allowed when necessary. Minura said a change in Vice Finance Minister for International Affairs doesn't mean a change in the basic policy, while he added the only and natural solution to yen's weakness is to improve economic competitiveness and boost growth potential.
- USTR said the commencement of new tariffs on Chinese goods will be delayed by at least a two-week period.
- US State Deputy Campbell said they need to do more and contest Chinese actions not only regarding the basing strategy but also the desire to go after rare earth minerals in Africa.
- A notice was sent to House staff announcing that in two weeks all ByteDance products including TikTok will be banned from House-managed devices and app stores, according to Punchbowl's Cohen.
EU/UK
NOTABLE HEADLINES
- BoE said final Basel rules for UK banks have been delayed until after the summer break.
DATA RECAP
- EU GDP Flash Prelim QQ (Q2) 0.3% vs. Exp. 0.2% (Prev. 0.3%)
- EU GDP Flash Prelim YY (Q2) 0.6% vs. Exp. 0.5% (Prev. 0.4%)
- EU Services Sentiment (Jul) 4.8 vs. Exp. 5.5 (Prev. 6.5, Rev. 6.2)
- EU Industrial Sentiment (Jul) -10.5 vs. Exp. -10.7 (Prev. -10.1, Rev. -10.2)
- EU Economic Sentiment (Jul) 95.8 vs. Exp. 95.4 (Prev. 95.9)
- EU Consumer Confidence Final (Jul) -13.0 vs. Exp. -13.0 (Prev. -13.0)
- German GDP Flash QQ SA (Q2) -0.1% vs. Exp. 0.1% (Prev. 0.2%)
- German GDP Flash YY NSA (Q2) 0.3% vs. Exp. 0.3% (Prev. -0.9%)
- German CPI Prelim MM (Jul) 0.3% vs. Exp. 0.2% (Prev. 0.1%)
- German CPI Prelim YY (Jul) 2.3% vs. Exp. 2.2% (Prev. 2.2%); Core 2.9% (prev. 2.9%)
- Italian GDP Prelim QQ (Q2) 0.2% vs. Exp. 0.2% (Prev. 0.3%)
- Italian GDP Prelim YY (Q2) 0.9% vs. Exp. 0.9% (Prev. 0.7%)
- Spanish CPI MM Flash NSA (Jul) -0.5% vs. Exp. -0.2% (Prev. 0.4%)
- Spanish CPI YY Flash NSA (Jul) 2.8% vs. Exp. 3.1% (Prev. 3.4%)
