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Global stocks start the week on a low note with declines in Europe and the US
Global stocks started the week quietly, with European and US stocks dropping on Monday, though the FTSE 100 approached last week’s record highs. AstraZeneca’s stock rose due to successful trials of its hypertension drug, Baxdrostat, which could potentially lead to annual sales of $5 billion.
In the US, cryptocurrency stocks surged as Bitcoin hit a record high above $121,000. Coinbase’s stock climbed nearly 2%. This crypto rally is linked to possible legislative changes, such as the Clarity Act, which could boost Bitcoin’s use.
Trump says trade negotiations are progressing well, with upcoming deal announcements expected soon.
President Donald Trump has shared updates on various issues, stating that trade talks are going well. He plans to reveal new trade deals soon and is committed to addressing the Ukraine conflict quickly after taking office.
Trump maintains regular communication with Russian President Vladimir Putin and is seeking a peaceful resolution in Ukraine. He has suggested a 100% tariff on Russia and additional sanctions on nations buying Russian crude oil if a peace agreement isn’t reached in the next 50 days.
Trade and Military Discussions
Key topics include discussions with the EU on trade, potential trade agreements, and military aid for Ukraine. Weapons, including Patriot batteries, are expected to arrive soon, which could help stabilize the region. When making financial decisions, it’s important to do independent research, considering the risks and uncertainties involved. Investors are responsible for any losses or costs related to market investments. Be aware that information delays or inaccuracies can occur. This article is for informational purposes only and should not be seen as financial advice. With Trump promising to increase pressure on Moscow through high tariffs and broad sanctions, there may be greater price volatility in commodities, especially crude oil. This situation leads to risks, as disruptions in Russian energy supplies may become targets rather than just threats if negotiations fail. Trump’s 50-day deadline, if enforced, could speed up decision-making for global stakeholders. This tight timeline may prompt other countries to react quickly. Consequently, energy-related investments must be prepared for rapid changes in diplomatic talks or early news leaks.Global Strategic Implications
Although Putin is engaging in discussions, history shows that communication doesn’t always lead to a decrease in tensions. Each message from Moscow or Washington—whether direct or implied—needs careful monitoring for changes in tone or deviations from previous threats. Contracts linked to Brent or West Texas Intermediate require close attention, especially short-term options. The likelihood of unpredicted price changes is higher now than what past models suggest. In terms of collaboration across the Atlantic, additional military support for Ukraine—especially valuable air defense systems—might alter how traders consider risks in European contracts. It’s not just the delivery of these systems but the political implications that could change prospects. This could mean that de-escalation might not happen soon, which contradicts Trump’s timeline and should be reflected in pricing models. There’s also a chance for new trade agreements from the U.S. While specific details are still unknown, even small changes regarding steel, subsidies, or technology transfers can significantly impact market sentiment. Past tariff cycles have quickly influenced currency volatility and yield adjustments, and this time is likely to follow the same pattern. Meanwhile, discussions among European policymakers on trade continue. Though these talks seem routine, they can leak, and given the current volatile environment, even minor commitments can affect market behavior. In such situations, traders may lean towards safer assets, not out of conviction, but to limit risk during uncertain times. As we navigate this period, urgency can be challenging. Past strategies may not be useful, as we face unpredictable outcomes, each with different potential impacts. It’s wise to consider spreads that protect against unlikely but significant events, rather than only focusing on expected trends. Create your live VT Markets account and start trading now.Japanese Yen weakens against US Dollar near 148.00 as rate expectations and tariffs influence sentiment
USD/JPY has risen above 147.00 as traders await the upcoming US Consumer Price Index (CPI) data on Tuesday. The Japanese Yen is losing ground against the US Dollar, pushing USD/JPY closer to the 148.00 mark.
Japan’s low interest rate of 0.5% makes its currency less attractive compared to higher-yield currencies like the US Dollar. The Federal Reserve’s interest rate, between 4.25% and 4.50%, supports the strength of the USD/JPY pair.
Expected US CPI Data
The US CPI is expected to show a 0.3% increase for June and an annual rise from 2.4% in May to 2.7%. The Core CPI, which excludes food and energy, may also rise by 0.3% month-over-month, with an annual rate of 3% anticipated. From a technical viewpoint, USD/JPY has support at the 38.2% Fibonacci retracement level of the January-April decline at 147.14. Resistance is at 148.00; if this level is broken, we might see a retest of the May high at 148.65. The US Dollar is the world’s most traded currency, making up over 88% of global forex transactions. Decisions by the Federal Reserve, like interest rate changes and quantitative easing, greatly affect the US Dollar. Generally, quantitative easing weakens the Dollar, while quantitative tightening strengthens it.Yield Spread Impact
The movement of USD/JPY towards 148.00 is significant. It’s influenced by the vast difference in monetary policy between the Bank of Japan and the Federal Reserve. Japan maintains a low-interest policy with rates at just 0.5%, while the Federal Reserve’s rates are between 4.25% and 4.50%. This yield gap drives capital flows, currently favoring the Dollar. This relationship is evident not just in the numbers but also in how traders react to events like the CPI report. With core inflation likely at 0.3% monthly and 3% annually, this could encourage the Fed to keep its hawkish stance. Even slight strength in this data can raise expectations that rates might stay elevated longer. This scenario boosts USD strength, especially against a currency linked to a central bank that isn’t expected to change its stance. Looking at market structure, we can see that price movements are following technical limits. Support is seen around 147.14, the Fibonacci retracement level from earlier this year, while the price is testing the resistance near 148.00. A breach of this level could bring the price to the May high of 148.65. There are no significant barriers technically. Additionally, the Dollar plays a crucial role beyond just bilateral currency pairs. It’s central to global trade, with almost 90% of all currency transactions involving the USD. Central banks consider not only local factors but also the behavior of the Dollar. Previous periods of quantitative easing led to considerable weakening of the Dollar. In contrast, tightening policies typically strengthen the Dollar, a fact not easily overlooked. In this context, if upcoming data confirms ongoing inflation, we might see shifts in short-term rate expectations. Derivative contracts sensitive to these rates, especially those tied to the short end of the yield curve, could readjust quickly. As we move forward, the focus shifts from whether the Yen will strengthen to how the Dollar will perform—specifically how inflation and rates may impact its strength. Markets are proactive and don’t wait for confirmation; they anticipate. So do we. Create your live VT Markets account and start trading now.Market focuses on US inflation data as gold fluctuates between $3,340 and $3,370
**Gold Price Movement**
Gold (XAU/USD) is currently trading between $3,340 and $3,370. This movement comes as the US considers a 30% tariff on imports from the EU and Mexico starting August 1. These trade threats have increased Gold’s demand, with the price hovering around $3,350 and finding it hard to break the $3,370 barrier.
US President Donald Trump recently sent letters to leaders in Europe and Mexico, raising concerns about new tariffs. This geopolitical tension further supports Gold as a safe haven.
Economic data being released on Tuesday might also influence Gold prices. The US inflation data will be especially important as it evaluates the impact of these tariffs.
Gold has broken out of a triangle pattern on the daily chart, signaling a shift in momentum. Surpassing $3,340 shows a rise in bullish interest, with resistance set at around $3,371.
If Gold can maintain a price above this resistance level, it could aim for $3,400, and potentially reach the June high of $3,452. On the other hand, if it falls below $3,327, it may revisit support near $3,300.
**Gold and Dollar Dynamics**
The Relative Strength Index (RSI) is nearly at 56, suggesting a bullish outlook with potential for further price increases. The US Dollar’s behavior, guided by monetary policy, is crucial for Gold’s price trends.
In summary, Gold’s price is strongly influenced by fluctuations in the US Dollar amid tariff discussions, and upcoming US inflation data will likely impact market movements.
With spot prices approaching the $3,370 mark, Gold is in a tug-of-war between rising demand due to trade concerns and the resistance level it needs to overcome. The current range of $3,340 to $3,370 indicates strong interest from buyers, but this hasn’t yet translated into decisive upward movement. The level at $3,371 remains significant, and a daily close above this point is needed for further growth.
Trump’s recent communication with European and Mexican leaders adds a layer of tension across the financial markets. This situation boosts safe-haven buying, with Gold attracting investment during unstable political times. Historically, such trends have been consistent during trade disputes, and it seems Gold is following this pattern.
The upcoming US inflation numbers are crucial as they will influence pricing expectations. If consumer prices exceed predictions, it may lead to speculation about interest rate changes, which typically affects the Dollar negatively. The Dollar’s recent performance has been unstable due to policy announcements, creating ripples in the metals market. A weaker Dollar could support Gold’s rise, especially now that the technical signals favor the bulls after the recent breakout.
From a chart perspective, the breakout from the triangle pattern is a positive indicator of increasing buying interest. The rise above $3,340 shows a change in market direction, but we need to keep an eye on $3,371. Price action around this level will determine if Gold can make a push towards $3,400 or if sellers will regain control. If Gold fails to hold above $3,327, it would raise short-term concerns with $3,300 acting as immediate support.
Momentum indicators suggest continued growth is possible. The RSI near 56 shows no overbought signals, implying that buying pressure is solid but controlled, suggesting further upside potential if the right conditions arise.
We are closely watching short-term inflation reports and any new tariffs introduced by Washington. Adjustments in these measures could lead to increased volatility since Gold has been responsive to such developments in the past.
Derivatives trading should be informed by the recent technical breakout while preparing for possible pullbacks at support levels. Watch trading volumes near resistance points for signs of confidence. When trading either way, stay cautious of news risks—current market conditions are influenced more by policy changes than by fundamental economic data.
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Euro stabilizes against US Dollar as US-EU trade tensions escalate
The Euro bounced back against the US Dollar, trading around 1.1689 after falling due to rising US-EU trade tensions. These tensions were triggered when the US threatened a 30% tariff on European imports, impacting the EUR/USD pair.
The US Dollar Index remains stable, trading below 98.00, as the market is cautious ahead of important inflation data. The EU has proposed extending the suspension of retaliatory tariffs against the US while further negotiations take place.
European Commission’s Countermeasures
The European Commission has prepared additional countermeasures against US imports. The first package focused on steel and aluminum products and was worth €21 billion. A larger package of €72 billion could also be implemented depending on the outcome of negotiations with the US. Key upcoming economic reports include the US Consumer Price Index (CPI) and Eurozone inflation data. The CPI is a vital measure of inflation and consumer spending trends, affecting the value of the US Dollar based on the results. Amid ongoing supply-chain issues, the US Federal Reserve aims to keep inflation around 2%. The Fed has taken steps to combat inflation, which is hovering near multi-decade highs, and plans to keep taking action.Market Predictability Challenges
These developments indicate a time of uncertainty in currency markets, especially for EUR/USD. The Euro’s recovery after its earlier dip shows that while markets reacted to initial tariff news, they remain susceptible to further shifts if any proposals move toward implementation. Traders should keep in mind that market movements may not accurately reflect long-term sentiment, especially when they stem from policy threats rather than actual changes. The US Dollar Index, just below 98.00, indicates a holding pattern likely due to traders waiting for clearer data before making bets on market direction. Inflation readings from both the US and Eurozone will be highly influential. The US CPI, when released, will clarify whether the Federal Reserve’s tightening measures will tighten further. Meanwhile, the European Commission seems prepared for possible escalation. The larger €72 billion tariff package suggests that Brussels is not depending solely on diplomacy. This package might act as a deterrent to encourage Washington to negotiate, but the market could react sharply if both sides become more aggressive. Currently, the small increase in the Euro seems more like a delayed reaction to positive EU actions rather than a strong sentiment shift. The market may feel reassured by the EU’s temporary restraint. However, if negotiations fail or if the US implements its proposed tariffs, selling pressure could return. Looking ahead, the upcoming CPI reports—especially from the US—carry significant risk, potentially impacting market volatility. The Fed aims to keep inflation near 2%, and elevated price pressures might justify further rate hikes. This could strengthen the Dollar and put downward pressure on equity indices and commodities priced in USD. Unresolved supply-chain bottlenecks add extra uncertainty to the inflation outlook. These issues can elevate headline inflation without indicating stronger demand, complicating the Fed’s response. A misstep here could lead the Fed to either act too slowly or tighten rates during economic weakness. For those watching volatility and seeking trading opportunities, mismatched expectations can create trading setups. Risk mispricing around CPI releases or shifts in tariff policies could lead to fluctuations in short-term interest rate futures and options premiums. The two inflation announcements—from the US and Eurozone—will likely influence the market direction of major FX pairs and inform expectations for rates. We will monitor implied volatility around the release dates, especially for short-term contracts, as they tend to respond quickly to fundamental changes. The shape of rate curves after the CPI updates will signal how the market expects the Fed to respond. In terms of actionable insights, any notable difference between US and European inflation data could push euro-dollar spreads out of their recent range. A stronger-than-expected reading from the US paired with a weaker Eurozone reading would favor a decline in the Euro. Conversely, any signs of coordinated action or positive trade negotiations could stabilize the pair rather than cause significant shifts. Thus, timely positioning before these reports is crucial. With both inflation data and trade policy changes potentially occurring close together, we may see options prices reflect directional bets. Keeping an eye on this, especially for short-term expirations, could provide insight into market sentiment leading up to the news release. Create your live VT Markets account and start trading now.US Dollar Index struggles below 98.00 at the start of the week due to tariff concerns and Fed pressures
Resistance Levels and Market Indicators
The DXY has bounced back from a low of 96.38 in July but is still below the important resistance level of 98.00. The 20-day and 50-day Simple Moving Averages (currently at 97.70 and 98.84) show resistance levels that are both moving downward, giving a bearish signal. The Relative Strength Index (RSI) is at 49, indicating neutral momentum for the dollar. Factors affecting the US Dollar include monetary policy from the Federal Reserve, which changes its value through interest rate adjustments and quantitative strategies.Looking Ahead
If there are questions about Powell’s independence, even subtly, markets will likely consider the medium-term effects. Generally, when political pressure is applied to central banks, it tends to add risk rather than lessen it, and this is seen quickly in currency values. We will closely monitor Federal Reserve statements in the days following the CPI report, especially concerning any hinted institutional pressure. Their guidance will either boost market confidence or do little to ease concerns, particularly with rate meetings on the way. Create your live VT Markets account and start trading now.Trump’s tariffs affect FX markets, causing the Pound to decline by 0.18% against the Dollar
GBP/USD dropped by 0.18% after Donald Trump announced a 30% tariff on goods from the EU and Mexico, leading to mixed reactions in the market. This situation strengthened the US Dollar, with GBP/USD trading at 1.3453.
The new tariffs affected market sentiment negatively in the foreign exchange (FX) sector, although equities reacted positively. The Consumer Price Index (CPI) data is expected to rise from 2.4% to 2.7% year-over-year, indicating that consumers are feeling the effects of these tariffs.
Federal Reserve Policy Change
The Federal Reserve is under pressure as it considers a change in its monetary policy, with expectations of possible rate cuts. Meanwhile, in the UK, slowing GDP increases the chance of rate cuts from the Bank of England, making the upcoming CPI data very important. Technical analysis indicates that GBP/USD has fallen below key levels, showing bearish momentum and more potential declines. A rise above 1.3500 could test resistance at the 20-day simple average of 1.3583. In May, the British Pound performed well against major currencies, especially strengthening against the Japanese Yen. Future movements of the Pound will depend on various factors, including economic data and geopolitical events. The 0.18% decline in GBP/USD followed Trump’s announcement of new tariffs on the EU and Mexico. This move has caused disruptions, pushing the US Dollar higher. As a result, GBP/USD fell to approximately 1.3453, a psychologically important level for many traders used to wider ranges earlier this quarter. These tariffs affected more than just foreign exchange markets. Surprisingly, equity markets remained resilient, possibly due to expectations of supportive policies in the US. However, there was an immediate negative impact on FX, particularly for currencies linked to global trade sentiment. Such shifts in mood can create volatility, which we are monitoring closely.Impact of US CPI Data
This week, the forecasted CPI figures in the US are expected to rise from 2.4% to 2.7% year-over-year, signaling renewed inflation pressures. This increase is connected to the new tariffs, and we anticipate consumers will feel the impact, which may influence the Federal Reserve’s decisions. The Federal Reserve is under a lot of pressure, and we may see stronger signals for a rate cut, especially if inflation remains high and growth indicators do not improve. Observations of shorter-term Fed Funds futures pricing show that the market is beginning to prepare for a possible rate cut, although the timing will depend on economic data. Across the ocean, the UK faces its own challenges. Weak GDP numbers are pushing market sentiment towards potential easing measures by the Bank of England. With consumer data still pending, the outlook remains uncertain. Many analysts have already adjusted their expectations for the Bank of England’s direction, and upcoming inflation readings will likely impact these forecasts again. From a technical perspective, GBP/USD has lost the positive momentum it had earlier this month. It has struggled to break above 1.3500, allowing sellers to take control. If there is a significant rise, resistance is strongest at 1.3583—the 20-day simple average, which requires a solid move above 1.3500 to be tested. Throughout May, the Pound showed relative strength, particularly against safe-haven currencies. This was unexpected, especially given weak figures from Japan. However, this strength may not last. The future direction will depend significantly on how upcoming CPI reports and geopolitical tensions influence the economy. For those trading sensitive to interest rates, the effects of major global developments—ranging from political decisions to central bank policies—are quickly reflected in day-to-day movements. We have seen implied volatility in sterling options increase, even while actual movements are restrained. This disconnect may not last long, as a reassessment of positions could be needed, especially with potential surprises from data releases and policy meetings. Short-term trade setups around CPI releases or potential policy shifts may need larger buffers for premiums and stop placements. Prioritizing flexibility over strict positioning may be wise until there is more clarity on direction. Create your live VT Markets account and start trading now.Silver hits a 14-year high near $39.10 amid rising trade tensions
XAG/USD has risen for three straight sessions, hitting a 14-year high of $39.13 before dropping to around $38.60. Increased demand for silver, driven by geopolitical concerns and fears of a trade war, is boosting the metal’s performance.
Attention is now on the upcoming US CPI data, which may change expectations for Federal Reserve interest rates and affect silver prices. Tariff threats from the US President towards the EU and Mexico have heightened trade war fears, increasing interest in precious metals.
Silver’s Strong Momentum
Silver is currently supported in a rising channel, showing solid upward momentum. The metal has broken past a key resistance zone above $37, indicating renewed interest from buyers, with $40 now in sight. Technical indicators reveal that Silver’s RSI is in overbought territory at 73.15, while the ADX at 15.65 suggests a strengthening trend. If prices hold above $38.50, further gains may be possible, with support near $37.30. Silver’s price is influenced by geopolitical instability, interest rate shifts, and the behavior of the USD. Industrial demand, especially from the US and China, plays a role in silver’s pricing, and the metal typically tracks gold’s price movements. The Gold/Silver ratio can provide insights into their relative valuations. Silver’s recent rise—peaking at $39.13, a level not seen since 2010—reflects growing geopolitical tensions and the ongoing threat of new trade restrictions. The drop to $38.60 has not impacted the overall trend, which remains solidly supported in a rising channel, signaling more potential advances. This situation has attracted more investor attention due to changing global conditions.Expectations for US Consumer Inflation Data
With US consumer inflation data arriving soon, interest rate market sentiment is likely to adjust. A surprising inflation figure could impact the Federal Reserve’s view, which would affect the dollar’s value. Since silver often moves inversely to the dollar, the CPI data’s impact could either support or undermine its recent gains. A weaker dollar, particularly if coupled with lower long-term yields, could boost silver prices. Mid-channel support now appears to be just above $37.30. If prices remain above this level, they may sustain short-term buying momentum. The significant surge past previous resistance at $37 signals renewed confidence, especially as market participants reassess the growing gap between industrial demand and interest in hedging against inflation. However, technical indicators suggest some caution. The RSI above 73 increases the risk of a short-term pullback, especially alongside an ADX of just over 15. These numbers don’t indicate exhaustion but suggest the early formation of a directional trend that typically allows for further movement — though it may face short-term pauses. Market focus has shifted back to safe-haven assets. Discussions about trade tariffs from Washington—especially if they become more aggressive or specific—are driving demand for metals that serve both as financial hedges and industrial materials. It’s also important to watch the Gold/Silver ratio. This ratio has been slightly narrowing, indicating that silver is outperforming gold relatively. Changes in this ratio can often predict where speculative and institutional investments may head next. A drop below the long-term average could encourage further strength in both metals, especially during times of real rate volatility. We recommend staying long, possibly through options or synthetic strategies, to account for the high RSI while also positioning for a potential break towards $40. Short-term pullbacks may provide better buying opportunities, especially if the $37.30 area holds. With industrial activity—particularly in Chinese electronics and the American automotive sectors—showing modest improvement, this demand offers additional support in a risk-sensitive market. Create your live VT Markets account and start trading now.ABT’s projected Q2 earnings show a 6.7% revenue increase and EPS rising to $1.25
Abbott Laboratories will announce its second-quarter 2025 results on July 17. Expected revenue is $11.07 billion, which is a 6.7% increase from last year. The anticipated earnings per share (EPS) is $1.25, showing a 9.6% growth compared to the previous year.
The Medical Devices segment is expected to drive this growth, largely due to the increased use of continuous glucose monitors and cardiac devices. Recently, Abbott received approval for the Tendyne transcatheter mitral valve replacement system, which is an important development.
The Established Pharmaceuticals Division is projected to see a 6.1% rise in revenue. This growth comes from strong sales in areas like gastroenterology and biosimilars, particularly in international markets.
In the Nutrition sector, sales of the adult brand Ensure are expected to support revenue growth. Strong sales in infant and toddler nutrition brands are also anticipated, leading to a projected 4.3% rise in this segment.
Abbott has an Earnings ESP of +0.96% and a Zacks Rank #2, indicating it is likely to exceed earnings estimates. Similar potential is noted for CVS Health, Cencora, and Cardinal Health, which are all set to release earnings soon.
Abbott’s results on July 17 show positive signs: expected revenue of $11.07 billion indicates nearly a 7% increase from last year, while EPS is projected at $1.25—almost a 10% gain. This growth is not explosive but reflects steady progress in key areas.
The Medical Devices segment stands out in this growth. The adoption of continuous glucose monitors and cardiac devices drives sales. The recent approval of their mitral valve replacement device offers long-term potential in cardiac care. Though such approvals don’t immediately impact earnings, they can positively influence future growth expectations.
Abbott’s Established Pharmaceuticals Division is expected to see about a 6% rise in income, thanks to strong sales in digestive health and biosimilars, particularly in global markets. However, biosimilars can be affected by regional pricing and competition, so future conference insights or updated forecasts may reveal changes in short-term outlooks.
In the Nutrition sector, strong consumer demand is key. Adult brands, particularly Ensure, are predicted to perform well. Much of the optimism also relies on their pediatric segment, which is generally stable and defensible. This leads to an expected 4% revenue increase in this category, but actual results will depend on inventory levels and market demand dynamics, which won’t be fully visible until Q3.
The earnings surprise prediction (positive ESP of 0.96%) and current ranking suggest a strong chance that the actual figures will exceed consensus estimates. However, recent weeks have seen estimates firm up, reducing the margin for upside. Future results may be less surprising compared to previous quarters unless there are improvements in operational margins or regional sales.
Abbott is not alone in expected earnings surprises. CVS and Cencora, known for distribution, are growing relevant in pharma earnings comparisons as they expand services. Cardinal Health might also surprise, but its sensitivity to generic pricing and product mix could lead to volatility after earnings. Observing reports closely can help identify trading opportunities based on deviations.
This situation prompts us to focus not just on financial results but also on operational metrics within each division. Significant changes in margins in the devices and nutrition sectors may provide early signals about pricing pressures and cost management that could affect performance in the latter half of the year. If device sales exceed expectations but operating income does not, further investigation into supply chain costs or research and development expenses may be necessary.
As July progresses, expectations are clearer. The devices segment offers a good lead indicator, but any updates should consider unit demand signals rather than just total sales. Unless there’s a change in guidance, any differences from consensus EPS estimates will be more critical for market positioning after the report.
USD/CAD remains stable as traders assess US tariff threats and await upcoming inflation figures
The USD/CAD pair is currently steady, influenced by US tariff threats against the EU and Mexico. The US Dollar is trading at about 1.3690 against the Canadian Dollar.
Possible tariffs raise concerns for Canadian exports, potentially including a 35% tariff on imports and 50% on copper. Despite these challenges, a strong employment report from Canada has provided some support for the Loonie.
