Morning Brew July 27 2021

Warsh makes FX interesting again — Juneteenth today

We may be looking at a very volatile day.

• U.S. equities will be closed for the Juneteenth holiday. Futures and indices close at 19:00 CET, and liquidity is likely to be thin.
• As Israel attacks Hezbollah targets in Lebanon, peace talks in Switzerland have at least been delayed, while JD Vance has warned Israel.
• The USD is gaining significantly.
• There is widespread criticism of the U.S. deal with Iran. Trump’s approval ratings are low, inflation remains high, rate cuts are off the table, and the Epstein files are back in public discussion. We can therefore expect some attempt at deflection by the U.S. president.

Expectations of higher short-term rates in the U.S. have boosted the U.S. dollar to its highest level in more than a year. The USD index, which values the greenback against a trade-weighted basket of currencies, is above 101.

EUR/USD is at 1.1420, GBP/USD at 1.3170, and USD/JPY at 161.40. At these levels, the Bank of Japan can be expected at the very least to express its displeasure, if not intervene outright. One source of uncertainty is that Kazuo Ueda remains in hospital, as far as I can tell, which may hinder the decision-making process. The yen is therefore one potential source of volatility today or on Sunday night.

In EUR/USD, John sees the next support at 1.1410, ahead of 1.1210.

USD/CHF is at 0.8075 and EUR/CHF at 0.9230.

Gold and silver are lower at 4,135 and 63.85, respectively. Bitcoin is at 62,600, and oil is at 80 in the UK line.

Yesterday, the S&P 500 rose 1.1% to 7,500.58, with the Nasdaq 100 surging 2.5% and the Dow Jones gaining 0.1%, as chipmakers led a broad rally. The Philadelphia Semiconductor Index advanced 6.4% to a record high. Nvidia (+3.0%) was the largest points contributor to the S&P 500. Intel soared 10.6% after President Trump announced a chip-making partnership with Apple. Sandisk (+11.5%) and Micron also hit record highs. Accenture tumbled by around 20% after issuing a weak Q4 revenue outlook, citing AI disruption to its consulting business. Kroger fell around 8.6% on a downbeat Q2 EPS guide. In after-hours trading, Hyperscale Data fell around 22% after announcing that it had established a new entity, while SpaceX prepared to sell $20 billion in bonds and the stock lost nearly 5%. Implied vol is near a 100% on a 1 month near the money

European stocks closed mixed on Thursday. The Stoxx 600 fell 0.3%, snapping a five-day winning streak, while the Euro Stoxx 50 edged up 0.37% to a new record close. The DAX gained 0.4% to 25,026.80 and the CAC rose 0.4%, while the FTSE 100 fell 1.0% to 10,399.70 and the SMI declined 0.4%.

The EU is looking to impose tariffs on Chinese hybrid vehicles.

Large U.S. banks formally pitched the central bank on Thursday on tweaks to a regulatory proposal aimed at reducing the funds they must set aside to absorb potential losses, as the central bank enters the final stage of a marathon overhaul of U.S. capital rules.

Trade carefully.

Friday, June 19, 2026
Japan CPI, UK Retail Sales

Monday, June 22, 2026

China rate decision, Canada CPI, EU Consumer Confidence