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Another round of risk-on moves were seen on Wall Street, but the gains were subdued as market participants also worried about  U.S. tariffs on China.

The mood in Europe also improved, Brexit-wise, as several officials expressed optimism that a good relationship between the E.U. and the U.K. could be maintained after the breakup. Besides, France’s win at the World Cup semi-finals also lifted hopes for a FRA-ENG showdown.

  • U.K. PM May says she is looking forward to Trump’s visit
  • May: Brexit will be smooth and orderly
  • German Chancellor Merkel to respond to Brexit White Paper on July 27
  • Irish PM Varadkar: Chequers deal is valuable, border backstop still needed
  • U.S. NFIB Small Business Index down from 107.8 to 107.2 vs. 105.6 estimate
  • U.S. JOLTS jobs openings down from 6.84M to 6.64M in June
  • Canadian housing starts jumped from 194K to 248K vs 195K forecast
  • Canada’s building permits rebounded by 4.7% from earlier 4.7% drop
  • U.S. to release list of Chinese companies to target for $200B in tariffs

Major Events/Reports:

Easing Brexit jitters?

The positive mood from the earlier trading session carried over to U.S. market hours, as trade tensions seemed to ease and some officials in Europe had positive things to say on the latest Brexit updates.

After a few dramatic twists in the U.K. Cabinet, Prime Minister May stepped up to the podium to reassure that Brexit will still be “smooth and orderly.” She also announced that the Brexit white paper will be released this Thursday and that this could keep “faith with the vote of the British people.”

These remarks came during her press conference with German Chancellor Angela Merkel, who echoed this optimism in saying that the E.U. hopes to maintain a good relationship with the U.K. after Brexit. She added that they will give their response to the Brexit white paper by the 27th.

Meanwhile, Irish Prime Minister Leo Varadkar welcomed the Cabinet deal struck by May earlier on but would hold off any further response until the white paper is released.

Some risk-on flows

Wall Street traders were in a cheery mood, allowing equity indices to end in the green for yet another day, although the gains were smaller compared to Monday.

  • Dow 30 index is up 143.07 points to 24,919.66 (+0.58%)
  • S&P 500 index is up 9.67 points to 2,793.84 (+0.35%)
  • Nasdaq is up 3.00 points to 7,759.20 (+0.04%)

Analysts say that positive earnings from Pepsi were mostly responsible for the gains, which were pared towards the end of the session as trade jitters returned.

An administration official shared that the U.S. is gearing up to publish the list of Chinese companies to target for an additional $200 billion in tariffs within the week.

Recall that the Trump administration already imposed tariffs worth $34 billion on Chinese companies earlier this month. Beijing responded with trade measures on soybeans and cars from Uncle Sam.

Major Market Mover(s):


A slight improvement in market mood pushed the yen lower against most of its forex rivals, but it managed to rebound against the dollar before the close.

USD/JPY popped up to a high of 111.33 then retreated to a low of 110.79, EUR/JPY edged higher from 130.10 to 130.72, GBP/JPY advanced to a high of 147.78, and AUD/JPY climbed past 83.00 before trade worries returned.


The Aussie held on to its gains from the previous session and was able to go for more thanks to risk-taking for the most part of the day.

AUD/USD ticked up from .7430 to .7474 before reversing course, AUD/NZD climbed to a high of 1.0928, EUR/AUD fell to a low of 1.5708, and AUD/CAD reached a high of .9809.

Watch Out For:

  • 11:50 pm GMT: Japanese core machinery orders (-5.2% expected, +10.1% previous)
  • 11:50 pm GMT: Japanese PPI y/y (rise from 2.7% to 2.8% expected)
  • 12:30 am GMT: Australia’s Westpac consumer sentiment (0.3% previous)
  • 12:30 am GMT: Australian home loans (1.9% decline expected)
  • 4:30 am GMT: Japan’s tertiary industry activity index (-0.4% expected, +1.0% previous)