Morning Brew July 27 2021

Good morning,

Wall Street ended sharply lower on Friday after Iran launched missiles at Israel in response to intensive Israeli strikes aimed at crippling Tehran's ability to build nuclear weapons. The subsequent rise of oil added to the overall worries.

Over the weekend military action in the middle east dominates the news and will likely to be the key driver short term. Oil jumped higher in the open but recovered to now -1%.

The G7 meeting in Canada was supposed to focus on tariffs but will now likely shift to the Iran/ Israel conflict.

Main worry for traders at the moment is a disruption of the flow of oil through he straight of Hormuz.

The coming week starts slow with economic data, Wednesday and Thursday are heavy with Central Bank decisions. Neither the Federal Reserve the Bank of Japan or the Bank of England are expected to change rates, the Riksbank and the SNB are expected to cut. The SNB has a 75% probability of a 25 basis point cut, the remaining 25% favor a 50 bps cut. The larger question for the CHF is when the first banks will start charging for CHF deposits.

There was a lot of criticism against the US Administration and Donald Trump in particular for the parade in Washington and the fact that when taking office he promised to end two wars in days and now has three on our hands. Usually when he gets ridiculed, he will lash out to deflect so expect something from that angle.

This morning, the USD gives up a little ground, equities are a little higher, gold gives up some ground while platinum and silver gain.

The US 500 is up 0.3% near 6000, the GER40 23500, Gold 3416, Silver 36.35, Platinum 1240.

EURUSD had the fist weekly close above 1,15 since Corona, the USD Index is below 98 at 97.64.

Bitcoin and Ethereum are stronger at 106500 and 2607.

Monday

• China Retail Sales
• EU Reserve Assets

  Tuesday

• Germany ZEW
• US Retail Sales, Import Prices

  Wednesday

• US & Japan Rate Decision
• UK & EU Inflation

  Thursday

• US Holiday
• Switzerland, Sweden UK, Turkey Rate decisions

   

  Friday

• Japan Inflation
• China Rate decision
• UK Retail Sales