Daily Market Outlook, July 30, 2025 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute…

Asian stocks saw a slight increase in relatively quiet trading following an agreement between China and the US to prolong their tariff truce. The South Korean won outperformed other Asian currencies. The MSCI regional stock index gained, driven mainly by technology stocks. The dollar weakened against all its Group-of-10 counterparts, as the Federal Reserve is largely anticipated to keep interest rates steady on Wednesday. The won climbed after a report suggested the US pushed for currency improvements during trade discussions. President Donald Trump is expected to make a decisive judgement on whether to continue the tariff truce with China before it expires in two weeks—an extension that would indicate a further stabilisation of relations between the world’s two largest economies. Stocks in Shanghai rose by 0.5%, while those in Hong Kong fell by 0.4%. Similar to the muted reaction to the US-EU tariff agreement, the recent positive developments with Beijing resulted in only a minor rise in stock prices and did little to enhance investor confidence. Traders remain focused on several important upcoming events, including the Fed's decision and Friday’s US employment report. Additionally, four major tech companies are scheduled to announce their earnings over a two-day period. The Stockholm discussions represented the third round of trade negotiations between the US and China in less than three months. These talks concluded ahead of an August 12 deadline to address issues during a 90-day pause on tariffs that had threatened to disrupt bilateral trade.

HSBC Holdings reported a 26% drop in first-half pretax profit to $15.8 billion, missing analyst estimates of $16.5 billion. The decline was driven by a $2.1 billion impairment on its Bank of Communications stake and $900 million higher credit losses, partly due to exposure to Hong Kong's struggling real estate sector. Despite the challenges, HSBC, valued at $225 billion, announced a new $3 billion share buyback, adding to an earlier $3 billion program.

In the upcoming 72 hours, traders will navigate a series of high-stakes events that include central bank decisions from the Federal Reserve, Bank of Canada, and Bank of Japan, corporate earnings reports, and will culminate with U.S. President Donald Trump's tariff deadline on August 1. Traders are preparing for a wave of corporate earnings reports, including those from major tech companies like Microsoft and Meta, as well as European firms such as UBS Group and GSK. The Federal Reserve is anticipated to maintain current interest rates during its policy meeting on Wednesday, though there may be some rare dissent among central bank officials advocating for lower borrowing costs. Additionally, as Trump approaches his deadline to finalise a deal that would prevent the imposition of "Liberation Day" tariffs, the U.S. and certain countries, including China, India, and South Korea, are expected to engage in last-minute discussions.

The SEC has authorised in-kind creation and redemption for all spot Bitcoin and Ethereum ETFs, aiming to enhance efficiency for institutional investors. This decision represents the first significant crypto-friendly policy change under the leadership of new SEC Chair Paul Atkins. BlackRock, which submitted an application for in-kind transactions in January, is set to gain along with other prominent ETF issuers. Ethereum rebounded to 3,730 on Tuesday after hitting a year-to-date high of 3,941. Institutional demand remains strong, with ETH ETFs adding 1.6 million ETH in six weeks. Traders should brace for potential volatility due to tariff deadlines and macroeconomic data.

Overnight Headlines

  • Trump’s Tariffs To Face Major Court Test Brought By US SMEs

  • UK Gives Israel Ultimatum On Palestinian State Recognition

  • IMF Says Global Economy Is Weathering Trump’s Tariff Assault

  • Fed Gov(s) Could Break Ranks As Trump Intensifies Powell Pressure

  • Fed’s Policy Toolkit May Be Headed For Fundamental Changes

  • Treasury Traders Trim Bullish Bond Bets Ahead Of Fed Meeting

  • Australia Inflation Rate Cools, Bolstering RBA Aug Rate-Cut Case

  • Singapore Holds Monetary Policy Steady On Tariff Uncertainty

  • Nvidia-Backed Enfabrica Releases Sys Aimed At Easing Memory Costs

  • JPM In Talks To Replace Goldman Sachs On Apple Credit Card

  • Visa Profit, Sales Rise On Resilient Consumer Spending

  • L’Oreal Logs Higher Sales Amid North America, China Recovery

  • Mondelez Logs Higher Profit, Revenue In Second Quarter

  • Booking Posts Quarterly Sales Jump; Sees Steady Demand

  • Starbucks Sales Miss Points To Long Road Ahead For Turnaround

  • Tesla Signs $4.3B Battery Supply Contract With Korea’s LG Energy

  • Samsung’s Big Tesla Order Fuels Recovery Bets Despite Chip Woes

FX Options Expiries For 10am New York Cut 

(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)

  • EUR/USD: 1.1500-10 (1.1BLN), 1.1525 (1.2BLN), 1.1550 (1.6BLN)

  • 1.1575 (778M), 1.1600 (380M)

  • USD/CHF: 0.8100 (300M)

  • GBP/USD: 1.3200 (328M), 1.3500 (244M)

  • AUD/USD: 0.6475 (396M), 0.6500 (790M), 0.6525-30 (580M), 0.6550 (1.3BLN)

  • NZD/USD: 0.6000-10 (585M). AUD/NZD: 1.0975 (224M)

  • USD/CAD: 1.3770-80 (2.9BLN)

  • USD/JPY: 147.50 (919M), 147.65 (550M), 148.00 (531M), 148.25-30 (1.2BLN)

  • 148.50 (546M), 148.65 (1.1BLN), 149.00 (1.9BLN)

CFTC Positions as of the Week Ending July 25th 

  • Speculators have reduced their net short position in CBOT US 5-year Treasury futures by 35,604 contracts, bringing the total to 2,469,924. They have also decreased their net short position in CBOT US 10-year Treasury futures by 22,843 contracts, resulting in a total of 749,534 contracts. Additionally, speculators cut their net short position in CBOT US 2-year Treasury futures by 51,208 contracts to 1,248,652. In contrast, they increased their net short position in CBOT US UltraBond Treasury futures by 3,725 contracts, bringing it to 232,343. The net short position in CBOT US Treasury bonds futures was trimmed by 47,265 contracts to 82,879. 

  • Equity fund speculators raised their net short position in the S&P 500 CME by 1,292 contracts to 330,763, while equity fund managers reduced their net long position in the S&P 500 CME by 11,519 contracts to 850,898. 

  • The net short position for Bitcoin stands at -1,852 contracts. The Swiss franc has a net short position of -26,065 contracts, while the British pound shows a net long position of 570 contracts. The euro's net long position is at 125,515 contracts, and the Japanese yen has a net long position of 106,645 contracts..

Technical & Trade Views

SP500

  • Daily VWAP Bullish Above 6380 Target 6500

  • Weekly VWAP Bullish Above 6300 Target 6515

EURUSD 

  • Daily VWAP Bearish Below 1.17 Target 1.15

  • Weekly VWAP Bullish Above 1.1640 Target 1.19

GBPUSD 

  • Daily VWAP Bearish Below 1.3450 Target 1.32

  • Weekly VWAP Bearish Below 1.3580 Target 1.32

USDJPY 

  • Daily VWAP Bullish Above 1.45 Target 1.48

  • Weekly VWAP Bullish Above 1.45 Target 1.51

XAUUSD

  • Daily VWAP Bearish Above 3320 Target 3500

  • Weekly VWAP Bearish Below 3350 Target 3290

BTCUSD 

  • Daily VWAP Bullish Above 120k Target 124k

  • Weekly VWAP Bullish Above 114k Target 130k