Munnelly’s Macro Minute…
The record performance in US markets is expected to persist after the EU reached a trade deal with Trump, easing fears of a devastating trade conflict. S&P 500 futures advanced after the index achieved five consecutive all-time highs last week. Contracts for European stocks rose by 1% following the agreement, which implements 15% tariffs on most of the bloc's exports. The MSCI All Country World Index hit a new record, while Asian stocks remained unchanged. The Euro strengthened against the Dollar, and crude oil saw a slight rise of 0.3%. Treasuries and a measure of the Dollar's value remained steady. Markets are recovering from the lows of April, supported by the new trade agreement and optimism that the US and China will extend their truce, reducing fears related to Trump's tariffs. This week’s key economic data, along with meetings from the Fed and BoJ, and earnings from major companies will test this confidence and may influence the market and global economic outlook. Trump and European Commission President Von der Leyen unveiled the EU Agreement on Sunday at his golf club in Turnberry, Scotland, but did not disclose the specific details of the agreement or provide any written documentation. This hard-won agreement will impose 15% tariffs on most of the bloc's exports, including vehicles, helping to avoid a trade war that could have severely impacted the global economy.
Friday's UK June retail report highlighted weak consumer demand, with sales volumes still 7% below 2019 levels, even after adjusting for population growth. Despite this, the UK continues to run a goods trade deficit of 8.1% of GDP. Goods imports have dropped significantly, from 24.9% of GDP at the end of 2022 to 20.4%, matching lows seen during the GFC, Brexit referendum, and the early Covid slump. However, exports have plunged to their lowest share of GDP since 1992, reflecting poor relative performance amid global trade challenges. The UK's production base suffers from underinvestment, self-imposed trade frictions, and policy uncertainty, with potential risks to services exports. This environment exacerbates macroeconomic instability and leaves the strong exchange rate vulnerable.
This week’s economic calendar is packed with significant events, particularly in the United States. Central banks are in focus with policy decisions expected from the Federal Reserve and Bank of Canada on Wednesday, and the Bank of Japan on Thursday—though no changes in policy are anticipated. Midweek also brings key Q2 GDP data for both the euro area and the US. The Atlanta Fed’s GDP Now indicator forecasts a rebound to 2.4% quarter-over-quarter seasonally adjusted annual rate (SAAR) for the US, following a contraction of -0.5% quarter-over-quarter SAAR in the first quarter, although signs of weakening private consumption continue to be evident.
Inflation will be another major theme, with June PCE data in the US (Thursday) expected to mirror the CPI uptick seen earlier this month. The euro area’s flash July inflation estimate arrives Friday, following preliminary data from member states on Thursday. US quarterly refunding news on Monday will draw attention amid financing pressures tied to the “One Big Beautiful Bill.” Employment data is also in the spotlight, featuring job openings (Tuesday), the ADP employment report (Wednesday), the monthly BLS jobs report (Friday), and the quarterly Employment Cost Index (Thursday)—all closely watched by the Federal Reserve. Consumer confidence figures (Tuesday) and manufacturing activity surveys will add further layers to the week’s economic picture. Friday is particularly busy, with final July manufacturing PMIs, the ISM survey, and President Trump’s revised tariff deadline all converging.
Overnight Headlines
- EU’s Von Der Leyen: 15% US-EU, Is The ‘Best We Could Get’
- ECB’s Cipollone: EZ Inflation Risks Balanced, Newspaper Reports
- Share Of Goods In UK Exports Falls To Record Low, FT Reports
- Fed Is Set For Contentious Debate As Investors Eye Fall Rate Cut
- Bond Traders Await Fed Meeting, Refunding And July Jobs Report
- China, US To Extend Tariff Pause At Sweden Talks By Another 90 Days
- Beijing To Rein In Excess Capacity Amid Squeezed Industrial Profit
- Japan’s Ishiba To Face Crunch Meeting Of LDP Lawmakers Monday
- Hedging By Australia’s Pension Funds Set To Boost Local Dollar
- Samsung To Produce Tesla Chips In $16.5B Multiyear Deal
- Roche To Test Whether New Drug Can Prevent Alzheimer’s Disease
- Alibaba Cloud Visionary Expects Big Shakeup After OpenAI Hype
- CKH To Invite ‘Major’ Chinese Investor For $23B Panama Ports Deal
- Eni Bets On Energy Transition Profits To Match Oil And Gas By 2035
- JPM Spooks Fintechs With Plans To Charge For Access To Customer Data
FX Options Expiries For 10am New York Cut
(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)
- EUR/USD: 1.1700 (494M), 1.1750 (698M), 1.1800-05 (643M)
- USD/CHF: 0.7850 (270M). EUR/CHF: 0.9330-40 (398M), 0.9350-55 (335M)
- GBP/USD: 1.3400 (530M),1.3495 (450M), 1.3550 (221M)
- EUR/GBP: 0.8680-95 (518M), 0.8770-80 (308M)
- AUD/USD: 0.6550 (705M), 0.6600-10 (1.3BLN). Big 0.6600 strikes all week
- NZD/USD: 0.6010-25 (556M). AUD/NZD: 1.1000 (335M)
- USD/CAD: 1.3675-80 (370M)
- USD/JPY: 147.00 (550M), 147.50 (293M), 148.00 (1.2BLN), 148.25 (1.4BLN)
CFTC Positions as of the Week Ending July 25th
- Speculators have reduced their net short position in CBOT US 5-year Treasury futures by 35,604 contracts, bringing the total to 2,469,924. They have also decreased their net short position in CBOT US 10-year Treasury futures by 22,843 contracts, resulting in a total of 749,534 contracts. Additionally, speculators cut their net short position in CBOT US 2-year Treasury futures by 51,208 contracts to 1,248,652. However, they added 3,725 contracts to their net short position in CBOT US UltraBond Treasury futures, increasing it to 232,343. The net short position in CBOT US Treasury bonds futures was trimmed by 47,265 contracts to 82,879.
- Equity fund speculators raised their net short position in the S&P 500 CME by 1,292 contracts to 330,763, while equity fund managers reduced their net long position in the S&P 500 CME by 11,519 contracts to 850,898.
- The net short position for Bitcoin stands at -1,852 contracts. The Swiss franc has a net short position of -26,065 contracts, while the British pound shows a net long position of 570 contracts. The euro's net long position is at 125,515 contracts, and the Japanese yen has a net long position of 106,645 contracts.
Technical & Trade Views
SP500
Daily VWAP Bullish Above 6380 Target 6500
Weekly VWAP Bullish Above 6300 Target 6515
EURUSD
Daily VWAP Bullish Above 1.1710 Target 1.19
Weekly VWAP Bullish Above 1.1640 Target 1.19
GBPUSD
Daily VWAP Bearish Above 1.3580 Target 1.3670
Weekly VWAP Bearish Below 1.3580 Target 1.39
USDJPY
Daily VWAP Bullish Above 1.45 Target 1.48
Weekly VWAP Bullish Above 1.45 Target 1.51
XAUUSD
Daily VWAP Bullish Above 3320 Target 3500
Weekly VWAP Bearish Below 3350 Target 3290
BTCUSD
Daily VWAP Bearish Above 120k Target 124k
Weekly VWAP Bullish Above 114k Target 130kDaily Market Outlook, July 28, 2025
Munnelly’s Macro Minute…
The record performance in US markets is expected to persist after the EU reached a trade deal with Trump, easing fears of a devastating trade conflict. S&P 500 futures advanced after the index achieved five consecutive all-time highs last week. Contracts for European stocks rose by 1% following the agreement, which implements 15% tariffs on most of the bloc's exports. The MSCI All Country World Index hit a new record, while Asian stocks remained unchanged. The Euro strengthened against the Dollar, and crude oil saw a slight rise of 0.3%. Treasuries and a measure of the Dollar's value remained steady. Markets are recovering from the lows of April, supported by the new trade agreement and optimism that the US and China will extend their truce, reducing fears related to Trump's tariffs. This week’s key economic data, along with meetings from the Fed and BoJ, and earnings from major companies will test this confidence and may influence the market and global economic outlook. Trump and European Commission President Von der Leyen unveiled the EU Agreement on Sunday at his golf club in Turnberry, Scotland, but did not disclose the specific details of the agreement or provide any written documentation. This hard-won agreement will impose 15% tariffs on most of the bloc's exports, including vehicles, helping to avoid a trade war that could have severely impacted the global economy.
Friday's UK June retail report highlighted weak consumer demand, with sales volumes still 7% below 2019 levels, even after adjusting for population growth. Despite this, the UK continues to run a goods trade deficit of 8.1% of GDP. Goods imports have dropped significantly, from 24.9% of GDP at the end of 2022 to 20.4%, matching lows seen during the GFC, Brexit referendum, and the early Covid slump. However, exports have plunged to their lowest share of GDP since 1992, reflecting poor relative performance amid global trade challenges. The UK's production base suffers from underinvestment, self-imposed trade frictions, and policy uncertainty, with potential risks to services exports. This environment exacerbates macroeconomic instability and leaves the strong exchange rate vulnerable.
This week’s economic calendar is packed with significant events, particularly in the United States. Central banks are in focus with policy decisions expected from the Federal Reserve and Bank of Canada on Wednesday, and the Bank of Japan on Thursday—though no changes in policy are anticipated. Midweek also brings key Q2 GDP data for both the euro area and the US. The Atlanta Fed’s GDP Now indicator forecasts a rebound to 2.4% quarter-over-quarter seasonally adjusted annual rate (SAAR) for the US, following a contraction of -0.5% quarter-over-quarter SAAR in the first quarter, although signs of weakening private consumption continue to be evident.
Inflation will be another major theme, with June PCE data in the US (Thursday) expected to mirror the CPI uptick seen earlier this month. The euro area’s flash July inflation estimate arrives Friday, following preliminary data from member states on Thursday. US quarterly refunding news on Monday will draw attention amid financing pressures tied to the “One Big Beautiful Bill.” Employment data is also in the spotlight, featuring job openings (Tuesday), the ADP employment report (Wednesday), the monthly BLS jobs report (Friday), and the quarterly Employment Cost Index (Thursday)—all closely watched by the Federal Reserve. Consumer confidence figures (Tuesday) and manufacturing activity surveys will add further layers to the week’s economic picture. Friday is particularly busy, with final July manufacturing PMIs, the ISM survey, and President Trump’s revised tariff deadline all converging.
Overnight Headlines
- EU’s Von Der Leyen: 15% US-EU, Is The ‘Best We Could Get’
- ECB’s Cipollone: EZ Inflation Risks Balanced, Newspaper Reports
- Share Of Goods In UK Exports Falls To Record Low, FT Reports
- Fed Is Set For Contentious Debate As Investors Eye Fall Rate Cut
- Bond Traders Await Fed Meeting, Refunding And July Jobs Report
- China, US To Extend Tariff Pause At Sweden Talks By Another 90 Days
- Beijing To Rein In Excess Capacity Amid Squeezed Industrial Profit
- Japan’s Ishiba To Face Crunch Meeting Of LDP Lawmakers Monday
- Hedging By Australia’s Pension Funds Set To Boost Local Dollar
- Samsung To Produce Tesla Chips In $16.5B Multiyear Deal
- Roche To Test Whether New Drug Can Prevent Alzheimer’s Disease
- Alibaba Cloud Visionary Expects Big Shakeup After OpenAI Hype
- CKH To Invite ‘Major’ Chinese Investor For $23B Panama Ports Deal
- Eni Bets On Energy Transition Profits To Match Oil And Gas By 2035
- JPM Spooks Fintechs With Plans To Charge For Access To Customer Data
FX Options Expiries For 10am New York Cut
(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)
- EUR/USD: 1.1700 (494M), 1.1750 (698M), 1.1800-05 (643M)
- USD/CHF: 0.7850 (270M). EUR/CHF: 0.9330-40 (398M), 0.9350-55 (335M)
- GBP/USD: 1.3400 (530M),1.3495 (450M), 1.3550 (221M)
- EUR/GBP: 0.8680-95 (518M), 0.8770-80 (308M)
- AUD/USD: 0.6550 (705M), 0.6600-10 (1.3BLN). Big 0.6600 strikes all week
- NZD/USD: 0.6010-25 (556M). AUD/NZD: 1.1000 (335M)
- USD/CAD: 1.3675-80 (370M)
- USD/JPY: 147.00 (550M), 147.50 (293M), 148.00 (1.2BLN), 148.25 (1.4BLN)
CFTC Positions as of the Week Ending July 25th
- Speculators have reduced their net short position in CBOT US 5-year Treasury futures by 35,604 contracts, bringing the total to 2,469,924. They have also decreased their net short position in CBOT US 10-year Treasury futures by 22,843 contracts, resulting in a total of 749,534 contracts. Additionally, speculators cut their net short position in CBOT US 2-year Treasury futures by 51,208 contracts to 1,248,652. However, they added 3,725 contracts to their net short position in CBOT US UltraBond Treasury futures, increasing it to 232,343. The net short position in CBOT US Treasury bonds futures was trimmed by 47,265 contracts to 82,879.
- Equity fund speculators raised their net short position in the S&P 500 CME by 1,292 contracts to 330,763, while equity fund managers reduced their net long position in the S&P 500 CME by 11,519 contracts to 850,898.
- The net short position for Bitcoin stands at -1,852 contracts. The Swiss franc has a net short position of -26,065 contracts, while the British pound shows a net long position of 570 contracts. The euro's net long position is at 125,515 contracts, and the Japanese yen has a net long position of 106,645 contracts.
Technical & Trade Views
SP500
Daily VWAP Bullish Above 6380 Target 6500
Weekly VWAP Bullish Above 6300 Target 6515
EURUSD
Daily VWAP Bullish Above 1.1710 Target 1.19
Weekly VWAP Bullish Above 1.1640 Target 1.19
GBPUSD
Daily VWAP Bearish Above 1.3580 Target 1.3670
Weekly VWAP Bearish Below 1.3580 Target 1.39
USDJPY
Daily VWAP Bullish Above 1.45 Target 1.48
Weekly VWAP Bullish Above 1.45 Target 1.51
XAUUSD
Daily VWAP Bullish Above 3320 Target 3500
Weekly VWAP Bearish Below 3350 Target 3290
BTCUSD
Daily VWAP Bearish Above 120k Target 124k
Weekly VWAP Bullish Above 114k Target 130kPublication date:
2025-07-28 12:38:44 (GMT)
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