Asian Pacific stock indices mixed

European markets are slightly higher

European stock indices flew higher this morning, but not by enough to undo yesterday’s sharp losses. Today’s rally follows a volatile session in which the DAX gave up a 250-point intraday gain to finish 250 points lower.

Investors reacted positively to news that an EU-US trade deal had been agreed upon so quickly and that the EU tariff was 15% rather than the 30% initially threatened. However, some criticism came from individual countries, most notably from France and Germany, suggesting that the European Commission (EC), led by Ursula von der Leyen, had effectively rolled over.

After all, a 15% tariff is significantly above the effective 1% levy that existed at the beginning of the year. In addition, the EC has promised to invest around $600 billion in the US and purchase US-liquefied natural gas. 

Source: TN Trader

But investors have used yesterday’s sell-off as an opportunity to increase their exposure to European equities, encouraged no doubt by this morning’s bounce in US stock index futures.

In addition, AstraZeneca released an impressive set of earnings this morning. The company beat both revenue and earnings estimates, reporting $14.46 billion in second-quarter sales and an adjusted core operating profit of $4.58 billion. 

The pharma giant maintained its full-year forecast and reiterated long-term goals, including a bold revenue target of $80 billion by 2030 - with a clear push toward US market expansion.

NASDAQ and S&P 500 hit fresh highs

US stock indices closed mixed on Monday. The S&P 500 eked out the narrowest of gains but still achieved its 15th record close of the year. The NASDAQ rose 0.3%, marking yet another all-time high. But both the Dow and the Russell 2000 underperformed, closing down 0.1% and 0.2% respectively.  

Source: TN Trader

This was the muted response which followed President Trump’s announcement of a trade deal with the European Union over the weekend. This will see a 15% tariff imposed on a broad range of EU exports to the US. As across Europe, the initial market reaction was positive. But then equities pulled back as individual EU member states began to criticise the deal and the role played by EC president Ursula von der Leyer.

But investors seem to be in a better frame of mind this morning. US stock index futures were firmer across the board as traders look ahead to a packed week of central bank meetings, economic data, and earnings.

Dollar builds on gains

Across FX, the US dollar soared yesterday against all the majors, but particularly against the euro. The single currency lost over 1% as investors questioned just how positive the US-EU trade deal was for the European Union.

The dollar’s rally was exaggerated to some extent due to excessive short positioning, which meant that some traders were forced to buy back greenbacks as prices rose. The Dollar Index surged above 98.00 yesterday and has built on those gains this morning, although it has pulled back from earlier highs.

Source: TN Trader

Gold and silver are flat

Gold and silver prices were little changed in early trade this morning. But gold was starting to make gains as the European session progressed, and it recovered a fair bit of yesterday’s losses. Gold was weaker on Monday, as traders cut their exposure as the US dollar rallied. But gold found some support around the 100-day moving average, which comes in around $3,300.

Source: TN Trader

With the Federal Reserve meeting on the horizon and inflation data due later in the week, traders appear hesitant to take aggressive positions in either direction. The current pause also reflects a broader consolidation across commodities, with precious metals still sensitive to fluctuations in the dollar.

Oil modest pullback after trade-fuelled surge

Oil prices were firmer this morning, building on yesterday’s gains. Crude oil rallied around 3% on Monday on renewed hopes over the outlook for global trade. This followed news that the US and EU had reached a trade agreement with a 15% tariff on EU exports to the US, half the £0% levy threatened by President Trump.

Front-month WTI was approaching $67 per barrel but remains in a trading range, with support currently around $65. While bulls were encouraged by the trade-related demand boost, lingering concerns around supply and macro risks continue to act as headwinds.

Source: TN Trader

Natural Gas holding steady

Natural gas prices remain steady for now, with the September contract holding above the key $3.00 threshold. While price action has been relatively uneventful, this level is becoming an increasingly important pivot for the market.

A break below could signal further downside, while sustained support could pave the way for renewed upside interest. For now, traders appear content to wait for further direction, with weather patterns, storage data, and broader risk sentiment all factors to watch in the coming sessions.

BTC and Ether consolidate

Bitcoin and Ether were firmer overnight, with both recovering a fair percentage of yesterday’s losses. Bitcoin is nudging towards $120,000 but continues to struggle to break through and hold above here. Ether moved closer to $4,000. It too is showing signs of consolidating, following its sharp rally since the beginning of this month.

VIX little changed

The VIX Index was also little changed this morning. Despite some intraday volatility in equities, overall market sentiment remains calm, and there’s little evidence of increased hedging activity.

With a barrage of data, earnings, and the Fed meeting ahead, this subdued read on volatility could shift quickly. But for now, it reflects investor confidence in the market’s near-term stability.

Macro focus: JOLTS and consumer confidence in the spotlight

Today’s economic calendar features two key US data points - the JOLTS job openings report and the latest reading on consumer confidence. Both indicators will help gauge the strength of the US labour market and broader consumer sentiment, offering timely insight ahead of Wednesday’s Fed decision.

With inflation, employment, and growth dynamics all under the microscope, today’s reports could influence both rate expectations and broader market positioning.

Earnings watch: Big names on deck

The second quarter earnings season continues today, with several high-profile names set to report. Among the highlights are Boeing, Merck, UPS and Procter & Gamble. The overall earnings beat rate remains strong, with, according to FactSet, 80% of the S&P 500 companies that have reported so far having topped analyst expectations.

Forward guidance could be key in shaping sentiment from here.

Notable updates

India has now surpassed China as the top smartphone exporter to the US, marking a notable shift in global supply chains.

Nvidia has reportedly ordered 300,000 H20 chips from Taiwan Semiconductor, citing robust demand from Chinese buyers.

Commerce Secretary Lutnick confirmed President Trump will move forward with new tariffs by the end of this week, as the August 1 deadline draws closer.

Market outlook

US stock index futures remain in positive territory as investors digest earnings, trade updates, and today’s data calendar. Yesterday’s European reversal was notable but hasn’t derailed the bullish tone. The Nasdaq continues to grind higher, with mega-cap results likely to dictate the pace for the rest of the week.

The Fed is expected to leave rates unchanged tomorrow as it heads into the summer recess. Friday’s Non-Farm Payroll report will cap off a busy week for macro watchers.