The Morning Update

We start the week with the USD and oil prices trading lower, while equity markets and Bitcoin are edging higher. Bond yields are also moving lower. Trump administration is pushing to conduct an on-site inspection of the Federal Reserve as PresidentTrump and his top aides continue to pressure Powell to lower interest rates or resign. Trump said it was “highly unlikely” he would dismiss Mr. Powell “unless he has to leave for fraud,” seizing on the Fed’s revamp, which is expected to cost $2.5 billion. Commerce Secretary Lutnick reaffirmed that August 1 is a "hard deadline" for countries to begin paying tariffs, though he emphasized that negotiations would continue until then.

News Headlines. Japan’s ruling coalition lost its upper house majority, but PM Ishiba vows to stay on, as the far-right Sanseito party gains ground with anti-immigration and economic promises. Meanwhile, tensions rise globally with major Ukrainian drone strikes on Moscow airports, retaliatory Russian attacks on Ukraine, and UN reports of Israeli forces firing on aid-seekers in Gaza. Chinese government is preventing a Chinese American banker from Wells Fargo and, separately, an employee of the U.S. Patent and Trademark Office from leaving the country. Iran will hold nuclear talks with EU nations this Friday amid threats of renewed international sanctions.

In currencymarkets. Japan's upper house election on Sunday dealt a big blow to the ruling coalition and raised concerns about an increase in debt, amid calls from the opposition to boost spending and cut taxes. The outcome could further complicate trade negotiations with the US amid the looming tariff deadline. The trading week starts with the JPY strengthening 0.68% against the USD, the CNY up 0.05%, THB and MYR up 0.06% and 0.26% respectively. In the trading currencies the MXN rallied 0.17% while the ZAR lost 0.13% against the greenback.

In commoditymarkets. Crude oil and gold prices remain steady as markets gauge the impact of EU sanctions on Russia andawait trade talks and the Fed meeting. Agricultural commodities are mixed: soybeans fall 0.77%, while wheat and lumber rise 0.26% and 1.06%, respectively.

USD/CAD struggles amid ongoing trade tensions. Tradersare likely observing the release of the Bank of Canada (BoC) Business Outlook Survey, set to be published later today. Carney has sent a trade envoy to Washington for last-ditch talks with President Trump ahead of the August 1 deadline for 35% steel and aluminum tariffs.

After last month’s run-up, the EUR/CAD seems to have found a new trading range between1.5900-1.6100.

EUR/USD is showing moderate gains in the early European morning session on Monday as the US Dollar loses ground, weighed by amild risk appetite and lower US Treasury yields. A European Central Bank, )survey on finance observes an optimistic view on the economy among European businesses but warns about trade uncertainty.

GBP/EUR strengthens as the Euro weakens amid renewed US-EU trade tensions. Traders favor the Pound ahead of the August 1 tariff deadline, pressuring the Euro.

GBP/USD GBP/USD holds steady as the US Dollar remains stable amid cautious market sentiment. Investors await clarity on potential US tariffs ahead of the August 1 deadline, limiting major moves.

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