US approves possible 2.2 bln arms sale to Taiwan
US still considering sanctions on Iran Foreign Ministers Zarif
Markets remain on hold ahead of tomorrow Powell's semi-annual testimony and FOMC Minutes, with the latter likely to be overshadowed as Fed Chair testimony will be released prior the Minutes. With a light calendar on the data front and all eyes on Powell today, today's risk tone was relatively mixed, with some of the recent market activity having priced out a 50 bbp cut in July. Therefore today the USD Dollar traded firmly above the 97 level. Yield also extended higher keeping global stocks on hold for the third consecutive day.
US Equities traded mix after a positive performance of the technological sector offset by losses in the industrial and consumer goods sector. SP500 traded softer finding resistance around the 2980 level. Nasdaq was led by gains in the large-cap with FB, AMZN and NFLX all up for the session.On European equities continues the struggle of the manufacturing sector led by losses led in automobiles and basic resources after the recent publication on the German factory orders. Dax closed in red for the third consecutive day.
On the FX side, the US Dollar extended gains putting all its major G10 counterparts under pressure. EUR poised for its third consecutive week of losses settling just above the mid-June high. GBP plunged to a two-year low - ahead of tomorrow's UK GDP - as traders discount the increased odds of a rate cut form the BoE by the end of the year. Other currencies followed similar patterns led by USD strength.
Crude Oil traded flat in a narrow range amid Iran tensions after US officials said to be considering sanctions on Iranian. Gold traded flat settling just below the 1400 mark amid USD strength and mixed sentiment. Level to the upside that got re-tested just after comments from China Global Times editor suggesting that the US should not play with fire by selling weapons to Taiwan.
Global Yields hedged higher amid decreased dovish expectations from Powell's testimony.
If you missed the morning briefing from the desk click HERE