Market News

Hopes for a ceasefire deal is boosting market optimism to start the new week. And we're seeing oil prices open with a gap down while equities are pushing up alongside precious metals and bond yields and the US dollar falls. Does all that sound familiar?

Well, it's not like we haven't seen it before.

That was the case in mid-to-late June before it led to the first ceasefire deal or memorandum of understanding as one would call it at the time. Yet, that amounted to nothing and here we are again circling back to that after one month.

Despite the market optimism we're seeing today, there's always that cautious saying that sometimes it is the hope that kills you.

Traders and investors are seeking relief, and that is evident in early action in…

• CXMT scores massive IPO, becomes the most-valuable company in mainland China
• Japan June services PPI 3.2% vs 3.3% prior
• Iran says it will halt strikes so long as US pause continues
• China June industrial profit YTD +18.7% vs +18.8% prior
• Xi tells Lula China ready to strengthen strategic coordination with Brazil
• Nvidia is in talks to provide a roughly $250 billion backstop for OpenAI as part of a massive data center project

Markets:

• WTI crude oil down $4.03 to $85.29
• S&P 500 futures up 52 points to 7499
• Gold up $36 to $4090
• US 10-year yields down 4.2 bps to 4.63%
• EUR leads, USD lags

The US and Iran continued to hold fire on Sunday and that led to a drop in oil prices but note the unease as WTI fell as low as $83.10 before rebounding more than $2.…

The Australian dollar is a standout performer to start the week, up 0.3% and trailing only the euro in G10 FX.

Analysts at Westpac are eyeing a modest trendline from early July.

Friday's rebound off 0.6965 support and the 0.7000-handle touch keeps AUD's low-key/low-vol July uptrend intact - it was increasingly looking fatigued after repeated failures > 0.7000 amid US-Iran escalation and new highs in US yields. Weekend news is mixed: de-escalation on the main US-Iran front (US strikes paused, the two sides confirmed as exchanging messages), but the second front in the Red Sea is still escalating. Net net: good for risk appetite and AUD that US-Iran seem to be tacking tentatively toward an off-ramp, but the Red Sea complicates it. Ahead of…

Chipmaker fever has hit mainland China with shares of CXMT jumping about 470% in the IPO debut. That gives it a market cap set to hit 3.3 trillion yuan, or $487 billion USD.

The DRAM maker ChangXin Memory Technologies has been thrust into the spotlight this year as it competes with companies in Japan, South Korea and the USA. It was founded in 2016 and is now the largest company by market cap in the country. It competes with SK Hynix, Samsung and Micron, who have been among the market darlings in the past year.

I wonder how this huge open will spill into other China stock names, perhaps kicking off a fresh round of speculation in Chinese stocks, which have languished after a rise last year.

The ticker is 688825 and the valuation now…

Gold is trying to find a bottom.

It's been skipping along the $3900 level for a month now and was able to withstand the recent 13-day US bombing campaign of Iran without breaking to new lows. That's a good sign for the bulls amidst reports that China has resumed buying. 

Peace is a pre-requisite for positive price action as it will mean lower energy prices and -- in time -- a path to rate cuts. For now, the market is anxious about a Fed rate hike. For this week's meeting, there is a 33% implied probability of a rate hike. If that comes to pass, it will likely hit gold initially. However, I tend to think that dip would be worth buying as a central bank that's suddenly hawkish would set the table for lower rates down the line. 

The bigger…

• Prior was +3.3% (revised to 3.4%)

This is a sequential improvement after two months at 3.3% y/y. It's tough to imagine Japan facing inflation but we're close to that point and last week's oil rally certainly didn't help.

This article was written by Adam Button at investinglive.com.

The market just posted a down week because Alphabet delivered perfectly solid results and got shelled anyway — capex guidance marched toward $200 billion and free cash flow went negative for the first time in its life as a public company. Tesla slid alongside it. The message from the tape was unmistakable: the era of applauding AI spending for its own sake is over. "We're spending more" is no longer a bull case; it's an interrogation prompt.

Now, into that mood, walk Microsoft and Meta on Wednesday, Apple and Amazon on Thursday, a Fed decision Wednesday afternoon with Brent north of $90 for the first time since May, core PCE on Thursday expected at 3.4%, and Q2 GDP for good measure. The S&P is still up 8.3% on the year but it's walking on…

Happy Monday to all the bulls out there, and to the oil bears.

There was an inkling of what was coming on Friday's price action and we got confirmation over the weekend as the US halted strikes. It doesn't sound like a deal is imminent but the shooting has stopped and that's leading to some early optimism.

S&P 500 futures opened 60 points higher, though they've quickly pared that to 50 points. Aside from rate-sensitive equities, there will be a focus on earnings again this week with some major names set to report. Nasdaq futures are leading the way, up 1.4%.

Brent crude is down 5% and WTI is down 4% in the first trades of the day. The WTI decline has quickly extended to $5.42, or 6%, to $83.80.

Gold is also up $35 to $4088 as it tries to…

Early indications for the FX market this week

• Euro (EUR/USD): 1.1392, +0.0025 (+0.22%) — modest firming to kick off the week, holding within Friday's 1.1386-1.1399 range
• Japanese Yen (USD/JPY): 163.67, -0.17 (-0.1%) — small pullback from the 163.84 close, still hovering near recent highs
• British Pound (GBP/USD): 1.3332, +0.0013 (+0.1%) — a touch firmer, sitting right at Friday's high
• Swiss Franc (USD/CHF): 0.8162, -0.0019 (-0.23%) — the biggest mover of the morning, franc bid as dollar softens against it
• Canadian Dollar (USD/CAD): 1.4083, -0.0009 (-0.06%) — barely budged, loonie steady just under 1.41
• Australian Dollar (AUD/USD): 0.7002, +0.0023 (+0.33%) — leading the risk-currency gains, back above the 0.70 handle
• New Zealand Dollar (NZD/USD):…

The week ahead brings an unusually concentrated sequence of central-bank decisions, inflation reports and growth data. The Federal Reserve, Bank of England and Bank of Japan will all be in focus, while US GDP, core PCE inflation, Eurozone CPI and Australian CPI may materially change expectations for interest rates.

For traders, the important question is not only what each institution announces. It is whether the outcome is more hawkish or dovish than markets already expect, which assets are most exposed, and whether the first price reaction develops into sustained acceptance or quickly reverses.

What traders need to know this week

• Wednesday: The Federal Reserve decision is the main event for the US dollar, Treasury yields, gold and Nasdaq…

The Iran war took a turn for the better on the weekend as the US halted strikes after 13 days and Iran said it will maintain a ceasefire so long as the US remains on pause. The developments have raised hopes for peace and that should lead to a negative start in the oil market.

The US didn't advertise the reason for halting strikes but there are reports that it's worried about depeating its interceptor supplies and also that it was running out of targets to strike in Iran.

"He's giving talks some space, he's giving it a little but of room," said US ambassador to the UN on Fox News Sunday.

A report also cites General Dan Caine -- the chairman of the Joint Chiefs of Staff, who cautioned to Trump on Friday that further attacks would have…

• Mon: BoC Market Participants Survey (Jul), Eurogroup Economic and Financial Affairs Council (Budget), Chinese Industrial Profits (Jun), German Ifo Expectations (Jul), US Durable Goods (Jun)
• Tue: French Consumer Confidence (Jul), Spanish Retail Sales (Jun), US ADP Employment Change Weekly, US Goods Trade Balance Advance (Jun), Richmond Fed Manufacturing (Jul), Dallas Fed Services (Jul)
• Wed: Fed Policy Announcement (Jul), BoC Minutes (Jul), Australian CPI (Jun), Swedish GDP (Jun), Italian Industrial Sales (May)
• Thu: BoE Policy Announcement & MPR (Jul), CBRT Minutes (Jul), Australian Export/Import Prices (Q2), French/Spanish GDP (Q2), Spanish/German HICP (Jul), EZ GDP (Q2), Unemployment Rate (Jun), US PCE (Jun), GDP Advance (Q2), Jobless Claims
<li style="margin-left:…