Market Update – July 26 – On Hold Ahead of FED, Oil Rallies

USDIndex ticked lower again but held over 106.00, ahead of the FOMC decision tomorrow. FX markets subdued with a 75 bp hike fully priced in, however uncertainty weighs over guidance. Russia will cut gas supplies to Europe from tomorrow. US Stocks rallied into close after a weak day (NASDAQ -0.43%), Walmart fell -9% (after hours) following profit warning, Newmont missed earnings -13%. AMZN raised prices for Amazon Prime.  Alibaba cut back global expansion plans. Asian markets mixed (Hang Seng +1.76%, Nikkei -0.23%). European FUTS lower too. Yields bounced to closed up +1.67%. Oil rallied $5/barrel to $98.00 after Russian announcement. Gold remains under $1725 and BTC under $22k. Biden talked down a “recession” and called for more investment from Oil companies.

Week Ahead – FED Rate Decision, US GDP and Earnings Season sees the technology giants (APPL, AMZN  & META) plus many more companies all reporting Q2 data.

USDIndex up support at 106.20 – to 106.30 – the Dallas & Chicago Fed indexes both slumped and remained in negative territory, another sign of recession. 
EquitiesUSA500 closed +5.12 pts (0.13%) (3966), US500FUTS at 3958 now. 4th 8%+ rally of the year, previous 3 have resulted in lower lows… 
Yields 10-year yield recovered to close at 2.8%, trades lower again at 2.79% now. 
Oil – infocus following tight supply and the announcement from Russia rallied over 5% from $93. 
Gold  had a volatile session from $1736 to $1714 to settle at $1724 once again. 
Bitcoin sank from $21.8K yesterday down to $21k now. 
FX MarketsEURUSD remains pressured but rotates at 1.0225, USDJPY down to test 136.00 yesterday; now 136.70. Cable breached the key 1.2000 last week, trades at 1.1990 now. 

Overnight – JPY CPI & PPI – firmer & in-line at 1.6% & 2.0% respectively. 

Today – US Monthly Home Prices, US Consumer Confidence, US Richmond Fed, IMF Short-term Forecasts, EU’s Energy Summit. Earnings from MSFT, GOOGL, Coca-Cola McDonalds, UBS (missed), 3M, UPS, GE, Visa 

Biggest Mover @ (06:30 GMT) Copper (+2.37%). Continued to rallied from 3.2460 lows last week to 3.4370 now, next resistance 3.4687 (20-day MA). MAs aligned higher, MACD histogram positive & rising, RSI 73 & OB zone, H1 ATR 0.0172, Daily ATR 0.1246.


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Stuart Cowell

Head Market Analyst

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