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Australia July Westpac-Melbourne Institute Consumer Confidence 93.1

• up from June’s 92.6

WPAC comments, in summary:

• optimism remained muted after the Reserve Bank unexpectedly held interest rates steady at 3.85%
• sentiment was stronger before the RBA decision but dipped afterward, reflecting lingering caution
• views on family finances improved
• longer-term economic confidence softened
• willingness to make major purchases fell — suggesting consumers remain cautiously pessimistic overall

No rate cut at the last RBA meeting vs. widely expected. Maybe next time!

This article was written by Eamonn Sheridan at www.forexlive.com.

USD/JPY is sitting just shy of 147.90 as I post.

Recent highs are arojund here from late June, and mid-May before that.

I am wondering when the Bank of Japan and Japanese government will begin to worry about the yen weakness nough to try verybal intervention? 150 is a big round number, probably just before then I’s suggest. What say ForexLive traders out there? In the comments please!

This article was written by Eamonn Sheridan at www.forexlive.com.

Japan and the European Union plan to issue a joint statement aimed at deepening their economic partnership, with a particular focus on trade, advanced technology, and greater supply chain coordination, the Yomiuri newspaper reported.

The move comes as both sides seek to enhance economic resilience amid rising global geopolitical tensions and disruptions.

This article was written by Eamonn Sheridan at www.forexlive.com.

UK retail sales rose sharply in June, driven by warmer weather and seasonal demand, according to the British Retail Consortium (BRC):

• Total sales climbed 3.1% year-on-year, up from 1.0% in May
• while like-for-like sales rose 2.7% (+0.6% in May).

The BRC credited the heatwave and events like Wimbledon for boosting demand for fans, summer clothing, and sporting goods. However, much of the increase reflected higher food prices, with supermarket spending up 4.1% from a year earlier.

Despite the retail rebound, Barclays data showed overall consumer spending dipped 0.1% year-on-year in June

• from +1.0% in May

pointing to continued caution among households:

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“Sales growth remains largely inflation-driven,” said BRC partner IGD, while Barclays noted that consumers are maintaining savings and remain hesitant, suggesting limited GDP growth for the rest of 2025.

–

Cable not doing a lot:

This article was written by Eamonn Sheridan at www.forexlive.com.

Moody’s chief economist Mark Zandi has escalated his warning on the U.S. housing market, shifting from a “yellow flare” to a “red flare” as conditions continue to deteriorate under the weight of high mortgage rates.

In a series of posts on social media platform Twitter, Zandi outlined how persistently elevated mortgage rates—hovering near 7%—are exerting significant pressure on housing demand, homebuilding activity, and price growth. He warns that without a meaningful drop in rates soon, the market is heading for a broader slump.

• “Home sales, homebuilding, and even house prices are set to slump unless mortgage rates decline materially from their current near 7% soon,” Zandi wrote. “That, however, seems unlikely.”

Zandi noted that while overall home sales are already sharply depressed, homebuilders had been using mortgage rate buydowns to keep new home sales afloat. But with buydown costs becoming unsustainable, many builders are now backing away. A clear sign of their caution: delays in land purchases from land banks—a precursor to future construction activity. As a result, Zandi expects new home sales, housing starts, and completions to drop in the coming months.

Adding to the gloom, Zandi said that the resilience in house prices is also fading.

• “House price growth had held up well. But this, too, is changing,” he said, noting that prices have flattened and are likely to decline. Rising supply, coupled with affordability challenges and demographic shifts, is weakening the market’s foundations.
• “Locked-in homeowners must move,” he added, referring to owners who secured low-rate mortgages during the pandemic
• “They can only work around these needs for so long.”

Zandi concluded with a broader warning: the housing sector, once a stabilizer in the post-COVID recovery, is now turning into a “full-blown headwind” for the U.S. economy. It joins a growing list of concerns for the outlook into late 2025 and early 2026, raising fresh questions about the trajectory of growth and the Federal Reserve’s path forward.

This article was written by Eamonn Sheridan at www.forexlive.com.

UBS Wealth Management on the latest tariffs threat from Trump:

• Sees White House tariff escalation as a negotiation tactic; expects eventual de-escalation.
• Base case: U.S. effective tariff rate to settle near 15%, allowing S&P 500 to keep rising.
• Believes a U.S.-EU trade deal is likely before August 1, or the deadline will be extended.
• Acknowledges risk of U.S.-EU tensions worsening, which would hurt both economies.
• On Mexico: Trump notes progress on border and trade, but wants more action; UBS sees no disruptive retaliation from Mexico.

UBS’ asset views:

• Recommends gradually increasing equity exposure, using market volatility to enter.
• Favors U.S. tech, healthcare, and financials; Asian tech (Taiwan, India, China); quality/thematic European plays.
• Suggests gold as a hedge against ongoing policy risk.

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Earlier on gold:

• Goldman Sachs forecasts gold reaching US$4,000

This article was written by Eamonn Sheridan at www.forexlive.com.

The U.S. Department of Commerce has announced it will withdraw from and terminate the 2019 agreement that had suspended an antidumping investigation into fresh tomato imports from Mexico.

As a result, Commerce is now imposing an antidumping duty order, which will place a 17.09% tariff on most Mexican tomato imports.

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Trump is really piling it on Mexico, this from the weekend:

• Trump hits the European Union (EU) and Mexico with a 30% tariff, starting on August 1

This article was written by Eamonn Sheridan at www.forexlive.com.

Goldman Sachs sees gold reaching US$4,000 by mid-2026

• expects gold to climb to US$3,700 per ounce by the end of 2025

Goldman Sachs highlights the following drivers:

• Central banks and institutions bought an average of 77 tonnes of gold per month between January and May 2025

• This pace is slightly below Goldman’s earlier projection of 80 tonnes per month by mid-2026 in the London OTC market

• In May alone, total purchases reached 31 tonnes (excluding the U.S.), with China the most prominent buyer, adding 15 tonnes

• Also notes that fund net positions in gold have eased from April highs, opening more room for sustained buying from ETFs and central banks

This article was written by Eamonn Sheridan at www.forexlive.com.

• ASDAQ closes at a new record high
• Crude oil futures settle at $66.98
• Commerce Sec. Lutnick and USTR Greer to meet w/GOP Ways and Means about trade negotiations
• BOEs Bailey: Uncertainty continues to weigh on growth expectations
• Yes… It is time for US quarterly earnings
• Trump: NATO deal is fully approved and fully done
• A mix day for European indices
• Reuters source: ECB to discuss more negative scenario next week
• Meta: Company is going to invest $100sB in compute for super intelligence
• Trump and NATO: Very unhappy with Russia. Severe tariffs on Russia if no deal in 50 days
• UK’s FTSE 100 reaches a new intraday record
• Mexican Pres Sheinbaum: We have done our part in fight against fentanyl
• EU’s Sefcovic on trade talks: It takes two hands to clap
• New Beginnings: ForexLive Rebrands to investingLive on July 21, 2025
• Fed’s Hammack: I see an economy that’s really healthy.
• Canada wholesale trade 0.1% versus -0.4% estimate
• Axios: Fed Chair Powell has asked banks inspector general to review it $2.5B renovation
• Hassett on CNBC: Talks for deals are ungoing. The Pres. wants whats best for the nation
• ForexLive European FX news wrap: Dollar steadies, Bitcoin and silver rallies
• Bitcoin keeps at record highs to start the week

The US dollar is closing the day higher versus the major currencies. The biggest mover is versus the British pound with a gain of 0.55%. The dollar rose the same versus the New Zealand dollar and by 0.47% versus the Australian dollar. The greenback was little changed versus the Canadian dollar with a gain of 0.05%. The US dollar is closing near highs for the day versus the GBP, JPY, CHF and the NZD. The greenback was supported by President Trump’s 30% tariff threats on the EU and Mexico. Both are looking to negotiate the rates down.

In other news, Cleveland Fed president Beth Hammack emphasized the need for policy patience, saying recent inflation readings show “modest progress” but don’t justify an immediate rate cut. She noted that the labor market remains resilient, and the Fed is watching closely how tariffs feed through to core inflation. Markets trimmed rate cut expectations slightly following her remarks.

NEC Director Kevin Hassett, speaking on CNBC, defended the administration’s tariff strategy, stating that talks for trade deals are ongoing and the president is focused on what’s best for the country. He argued that import prices are falling despite tariffs, attributing the shift to growing patriotism among consumers choosing U.S.-made products. Hassett cited several national emergencies—drug flows from Mexico, trade deficits with the EU, and Brazil transshipping Chinese goods—as justification for recent tariffs. He also criticized the Federal Reserve, saying it has been “very wrong” about the inflationary impact of tariffs, and predicted that domestic production will reduce price pressures. Finally, he noted that the correlation between U.S. and European interest rates has broken down, signaling a shift in global monetary dynamics.

Speaking from the White House, President Trump expressed strong dissatisfaction with Russia and issued a clear ultimatum: if a peace deal is not reached within 50 days, the U.S. will impose 100% tariffs on Russian goods along with secondary tariffs on countries that continue to buy Russian oil. While direct trade with Russia is minimal, Trump emphasized that the secondary tariffs would be “biting” and are intended to discourage global commerce with Moscow. He announced a new defense arrangement with Ukraine, under which Ukraine will manufacture and pay for advanced weapons, including Patriot missile systems, to be coordinated through NATO. Trump also said billions in military equipment will be rapidly deployed and framed the strategy as a means to end the war through economic pressure and strong alliances. He praised European nations for stepping up and confirmed the EU will soon visit Washington to discuss broader trade issues. Confident that Putin knows what a fair deal looks like, Trump reiterated that the war must end, and a resolution is on the horizon.

Crude oil futures settled at $66.98, down $1.47 or 2.15% on the day, as sellers regained control following a decisive technical breakdown. After briefly rising to a multi-week high of $69.61, the price reversed sharply, falling below the 200-day moving average at $68.33, which had been a key battleground last week. The decline accelerated as the price also fell below the 100- and 200-hour moving averages at $67.97 and $67.37, respectively. The breakdown across these major technical levels shifts the short-term bias back in favor of sellers and puts buyers on the defensive.

European equities closed the day mixed, with standout strength in the UK. The FTSE 100 rose 0.64% to a new record close of 8998.07, briefly touching an intraday high of 8999.22. Meanwhile, Germany’s DAX fell 0.36% and France’s CAC slipped 0.27%, dragging down broader sentiment. Gains were modest elsewhere, with Spain’s IBEX up 0.19% and Italy’s FTSE MIB rising 0.27%.

In the bond market, 10-year yields in Europe also mixed: German bunds rose 3.9 bps, French yields up 0.6 bps, Spanish and Italian yields edged slightly higher, while UK gilt yields declined 3.5 bps to 4.595%, reflecting diverging rate expectations across the region.

In the US debt market, yields are ending mixed with the short end marginally lower while the longer end was marginally higher.

• 2-year yield 3.902%, -1.2 basis points
• 5-year yield 3.988%, -0.3 basis points
• 10 year yield 4.433%, +1.0 basis points.
• 30 year yield 4.975%, +1.8 basis points

Bitcoin hit a new record high of $123,236, but has rotated back to the downside and trades near the lows for the day at $118,972. The price is currently trading at $119,766 up $644 or 0.54%. The price is up over 20% for the year.

US stocks moved modestly higher with the NASDAQ index up 0.26% and the small-cap Russell 2000 up 0.53%. Meta shares are up 0.40% at $720.28 but well off highs at $728. Meta CEO Mark Zuckerberg announced that the company plans to invest hundreds of billions of dollars into computing infrastructure to develop superintelligence, leveraging Meta’s strong business capital to fund the ambitious effort. The initiative includes building out Hyperion, a computing project capable of scaling to 5 gigawatts over several years, and establishing Meta Super Intelligence Labs, which will offer industry-leading compute capacity and the highest compute-per-researcher ratio. Zuckerberg emphasized Meta’s commitment to assembling the most elite and talent-dense team in the industry. The company is also constructing several massive AI compute clusters, starting with “Prometheus,” which is expected to go online in 2026, followed by additional advanced “Titaned” clusters. Meta is going all in and spending a boat load of money in doing so.

Looking at the closing levels for the major indices, the NASDAQ index closed at a record high:

• Dow industrial average rose 88.14 points or 0.20% at 44459.65.
• S&P index rose 8.81 points or 0.14% at 6268.56
• NASDAQ index rose 54.80 points or 0.27% at 20640.33.

The small-cap Russell 2000 gained 14.90 points or 0.67% at 2249.72.

This article was written by Greg Michalowski at www.forexlive.com.

Japan’s Prime Minister Ishiba is set to meet U.S. Treasury Secretary Bessent in Tokyo on July 18, just ahead of the Osaka Expo’s U.S. National Day on July 19.

The meeting is intended to push forward negotiations between the two countries on looming U.S. tariff measures, with a deadline for the talks approaching on August 1.

Bessent, who is leading the U.S. side in the discussions, will also hold talks with Japan’s Economic Revitalization Minister Akazawa.

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We had the heads up on this last week:

• Japan eyes tariff talks with U.S. during Bessent’s World Expo visit next week

Bessent and Akazawa

This article was written by Eamonn Sheridan at www.forexlive.com.

The major stock indices are closing higher led by the NASDAQ index and the small cap Russell index. The final numbers are showing:

• Dow industrial average +88.14 points or 0.20% at 44459.65.
• S&P index up 8.81 points or 0.14% at 6268.56.
• NASDAQ index up 54.80 points or 0.27% at 20640.33.

The small-cap Russell 2000 rose 14.90 points or 0.67% at 2249.72.

Meta CEO Mark Zuckerberg announced that the company plans to invest hundreds of billions of dollars into computing infrastructure to develop superintelligence, leveraging Meta’s strong business capital to fund the ambitious effort. Shares of Meta rose to a high of $728 but backed off closing up $3.41 or 0.48% at $720.92.

Other winners today included:

• Roblox (RBLX): +5.78%

• Block (XYZ): +5.42%

• Palantir (PLTR): +4.96%

• Shopify (SHOP): +4.13%

• Fortinet (FTNT): +3.97%

• MicroStrategy (MSTR): +3.79%

• PayPal (PYPL): +3.53%

• Tapestry (TPR): +3.17%

• Live Nation Entertainment (LYV): +3.17%

• Corning (GLW): +2.99%

• Delta Air Lines (DAL): +2.57%

• Airbnb (ABNB): +2.38%

• Gilead (GILD): +2.23%

Earning season is kickstarting tomorrow with J.P. Morgan reporting before the open. Overall six of the 30 Dow stocks will announce the earnings in the first few days (see * on the names below).

Below is a list of the major releases to start the earnings season:

Tuesday:

• J.P. Morgan*
• Wells Fargo
• JB Hunt
• BlackRock
• Bank of New York
• Citicorp

Wednesday:

• United Airlines
• PNC
• Goldman Sachs*
• Bank of America
• Morgan Stanley
• Johnson & Johnson *

Thursday

• Travelers*
• Netflix
• PepsiCo
• GE Aerospace
• Taiwan Semiconductor
• U.S. Bancorp

Friday

• Comerica
• Charles Schwab
• American Express*
• 3M*

This article was written by Greg Michalowski at www.forexlive.com.

Plenty of data on the way from China today.

Expectations for Q2 GDP are running ahead of the government target:

• China’s economy likely grew faster than the government’s annual target in Q2

Expectations for June month data are more mixed, steady for IP and Investment while retail sales are expected to drop back to a still healthy 5.6% y/y growth rate.

Equites in China are being underpinned by flows based on bets of improvement:

• Where are Sovereign Wealth Funds and Central Banks shifting funds to? China, USD
• Chinese President Xi Jinping’s war on deflation speeds up – “Anti – involution” policy
• ICYMI – China set to ramp up and broaden its fiscal support in the second half of the year

• This snapshot from the ForexLive economic data calendar, access it here.
• The times in the left-most column are GMT.
• The numbers in the right-most column are the ‘prior’ (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected.

This article was written by Eamonn Sheridan at www.forexlive.com.