Financial markets hold a cautiously optimistic tone despite headwinds from Japan’s market holiday, the Federal Open Market Committee (FOMC) blackout period, and weekend developments.
Optimism surrounding the GENIUS Bills—the first U.S. crypto regulation—joins hopes of improved U.S.-China trade ties, renewed European Union–U.S. trade tensions, mixed U.S. economic data, and fresh statements from the International Monetary Fund (IMF), all of which keep bulls on edge ahead of this week’s preliminary July Purchasing Managers’ Index (PMI) releases.
A wave of optimism driven by U.S. government-backed, industry-friendly crypto policies—supported by President Donald Trump—pushed the total crypto market capitalization to a record $4.0 trillion, while blockchain activity hit an all-time high with over 340 million transactions in a single week. This surge lured institutional investors, fueling top-tier crypto gains even as Bitcoin (BTC/USD) briefly corrected after hitting a fresh all-time high before rebounding on Monday.
In trade news, China’s rare earth magnet exports to the U.S. jumped over 660% in June to 353 metric tons, while Nvidia plans to resume sales of its H20 AI chips to China. The White House remains confident about finalizing multiple trade deals before the August 1 deadline to ease global risk sentiment.
However, U.S.-European Union (EU) trade tensions escalated after U.S. negotiators, per the Wall Street Journal (WSJ), signaled President Trump may push for more concessions, including raising tariffs to 15% or higher on EU goods—prompting Germany and others to lean toward France’s tougher stance.
Geopolitically, Iran, Britain, France, and Germany will hold talks on Tehran’s nuclear program on July 25 in Turkey, raising questions about the U.S. response and possible implications for energy markets. Russia, meanwhile, criticized U.S. weapons support to Ukraine but signaled willingness to cooperate for a ceasefire.
The International Monetary Fund (IMF) added to market caution, warning of persistent global risks and uncertainty due to ongoing trade tensions.
On the data front, U.S. consumer sentiment improved last Friday, while inflation expectations eased. Still, Federal Reserve (Fed) officials have entered a pre-meeting blackout ahead of the July 29–30 Federal Open Market Committee (FOMC) event, mostly resisting Trump’s calls for aggressive rate cuts. Fed policymakers continue to highlight inflation risks from tariffs and emphasize the importance of upcoming data—especially after last week’s mixed inflation report.
In the broader market, the U.S. Dollar Index (DXY) stays under pressure, holding last Friday’s pullback while testing a two-week uptrend. Gold extended its rebound from key technical support, Crude Oil remained subdued after prior losses, and both Bitcoin (BTC/USD) and Ethereum (ETH/USD) continue to hold strong after a blockbuster “Crypto Week.”
Latest moves of key assets
- Gold gains 0.80% intraday to $3,378, extending Friday’s rebound from six-month support near $3,340 and trimming prior weekly losses.
- Bitcoin (BTC/USD) breaks a three-day losing streak, edging higher near $118K and eyeing a move toward its all-time high near $123K.
- Ethereum (ETH/USD) hits a fresh yearly high before easing to $3,800, still up 1.1% intraday.
- U.S. Dollar Index (DXY) slips 0.40% to 98.05, pressuring its two-week uptrend.
- Wall Street closed mixed—Nasdaq hovered near record highs, while Dow Jones and S&P 500 post modest losses; U.S. futures rise alongside gains in Asia and Europe.
- WTI Crude Oil dips 0.70% to $65.90 after stalling its four-day losing streak, now mildly offered near $66.00.
What’s Next?
Monday opens with a light economic calendar, featuring only the Bank of Canada’s (BoC) Business Outlook Survey. With Japan’s market holiday, the Federal Open Market Committee (FOMC) blackout period, and caution ahead of the European Central Bank (ECB) meeting and July PMI previews, markets are largely subdued.
In the absence of major data, risk sentiment remains fragile—likely capping equity gains while allowing cryptocurrencies to extend last week’s rally. Meanwhile, the U.S. Dollar appears too weak to mount a strong recovery, creating room for Gold, USD/JPY, Antipodeans, and major currencies to edge higher.
Crude Oil, however, stays vulnerable amid rising supply concerns and potential demand pressures tied to Trump’s tariffs.
Overall, markets remain in wait-and-see mode—but quiet moves today could set the stage for a volatile week.
