Morning Brew July 15 2021

Good Morning,

Jerome Powell's testimony was more dovish than FX traders had feared but not as dovish as equity traders had hoped.  He basically kept his stance on  the transitory inflation : "The high inflation readings are for a small group of goods and services directly tied to the reopening" he also hinted at measures in the next 6 months.

US Indexes close mixed with the Dow and the S&P can rise moderately, the NASDAQ gives up a little ground. Apple rises on hints at strong IPhone demand, Wells Fargo and Citi could beat expectations in their earnings reports, Citi falls 0.3% Wells Fargo jumps 4%.  

The USD Index dropped to 92.35 with EURUSD off support along with Cable Gold and Silver. EURUSD could gain to 1.1842, GBPUSD at 1.3850. Gold 1830 and Silver 26.35. Bitcoin seems stuck in a tightening range, currently at 32600. Acc to a Reuters report, Saudi Arabia and the UAE could agree on a compromise, oil receded 1%.

Dax remains near 15800 and needs to break that level for a run to 16200 initially. It might be we need the next ECB meeting to decide a clear direction. Daimler just reported better than expected earnings. The SMI remains above 12000 but seems to also need help to move ahead. 

Overnight, Chinese data slightly disappointed versus the official estimates,  but after recent data points this was expected and loosening monetary policy is seen as compensating sufficiently.

The U.S. Senate banned the import of products from China's Xinjiang region in an effort to put pressure on China to respect human rights in the area. 

Today, watch for the earning releases, initial jobless claims and the continuation of the Powell testimony at 15:30 CET.

Todays Earning reports:

Skandinaviska Enskilda Banken, Fast Retailing, Bank of New York Mellon,  Morgan Stanley, UnitedHealth Group, US Bancorp,  Truist Financial, Progressive Corp and Cintas Corp

Please remember that CLQ1 will expire on 20th July at 15:00 GMT