Morning Juice – Europe Session Prep

Good Morning Traders.
It is Monday, the 27th of July. Here is what to look out for today.

Sentiment

Bond markets head into the week with traders pricing in roughly a one-in-three chance that the Fed raises interest rates on Wednesday, as renewed volatility in oil prices and Treasury yields has intensified concerns that inflation could remain elevated.

In Japan, Prime Minister  Takaichi’s approval ratings fell after government measures aimed at easing the cost-of-living crisis failed to satisfy households, while her push to pass a series of controversial bills also weighed on public support.

South Korea’s won strengthened sharply, helped in part by SK Hynix’s record US listing. The currency’s rebound has prompted authorities to encourage exporters to repatriate overseas Dollar earnings, providing additional support for the won.

Meanwhile, geopolitical tensions showed tentative signs of easing after the US paused its strikes against Iran for a second consecutive night. Iran also refrained from retaliatory attacks and held talks with Oman regarding the security of the Strait of Hormuz.

Oil prices declined as the pause in US military action reduced fears of an immediate escalation in the Middle East, although uncertainty remained after the Houthis claimed further attacks on Saudi targets.