European and US futures are trading lower as investors pick up the momentum from the Asian session, where most markets closed in negative territory. The yen's sell-off against the dollar poses a significant risk, given the stark differences in monetary policy between the two central banks. We maintain our belief that if the yen sell-off issues remain unaddressed, they could escalate into a significant issue for the global financial system, potentially surpassing the magnitude of the 2007 financial crisis.

Weakness In The Eurozone 

Investors and traders are concerned about the weakness in the largest economy in the Eurozone, with a particular focus on Europe. For instance, yesterday, we had the German Gfk Consumer Climate numbers, which came much worse than expectations. The number came in at -21.8, while the forecast was for -19.4. It has been hoped that this number will move in a positive direction as the ECB has lowered its interest rates more recently, and it is strongly believed that the bank will act one more time later in the year.

Economic Docket 

Today, we don't have much economic data for the European markets, but there is plenty to discuss in the UK. First, there was a political debate between the candidates Rishi Sunak and Keir Starmer. Both candidates engaged in a televised debate, and a commonality between them was their lack of comprehensive plans to stimulate the economy. While Kei Starmer, the leader of the Labour Party, aspires to heal the wounds from Brexit if he takes office, traders question whether he has the right idea. They believe that the best course of action would be to fully reverse Brexit, as the current situation has only caused further damage to the US economy. In the debate, Keir appeared to be losing, but that doesn't mean Sunak has emerged victorious, as his policies over the past few years have only exacerbated the public's misery, particularly as disposable income among consumers continues to remain at its lowest point.

BOE's Governor Speech 

Traders in the UK will be paying close attention to the BOE's governor speech today. According to the most recent reading, inflation has dropped to the bank's target, which means that the bar is very low now for the BOE to act and save the economy from further damages caused by higher interest rates. Currently, the expectations are that we will see an interest rate cut by the BOE in August, and the move could be in the region of 25 basis points. The pricing of the GBP/USD indicates this. What would be important to note today is if he deviates from his original position and delivers a hawkish message that the market players are not expecting.

US GDP Data 

As for the US, the big event today was about the US GDP data, which was very much in line with expectations. The forecast for the data was 1.4%, and the actual number matched expectations, beating the previous reading of 1.3%. The GDP quarterly number confirmed that if we zoom out, things are still looking very decent, and the Fed has little to no pressure to deviate from their current plan for monetary policy. Currently, we anticipate a 25 basis point interest rate cut by the Fed in September, marking the earliest time line. However, astute investors understand that the situation changes when they scrutinize the data more closely, which is why the Core Dubale Good m/m number assumes significant importance. The data point missed the expected value of 0.2% and printed a negative figure of -0.1%. This demonstrates the actual conditions and sentiments among the market's industry players. In addition, the current sentiment among consumers and their appetite for buying a home isn't that good either, as the Pending Homes Sales m/m number not only missed expectations by a mile but printed a negative number. The actual number came in at -2.1% against the forecast of 0.6%, while the previous number printed a reading of -7.7%. 

For the stock market, the data contains both positive and negative elements. This has confused investors a little, while speculators continue to hold the view that the market is more than likely to remain somewhat bearish unless we hear something positive from the Fed. 

Going Forward 

Given the fact, that we have seen the important numbers for the US GDP now, the only data which matters the most for the economy is the latest core PCE data along with personal income and spending numbers. These data points would very much set the tone for the price action not only for Friday but also for the momentum which will be picked up by market players next week, 

Bitcoin

The crypto king continues to struggle, and the selling pressure is very much on. Traders are concentrating solely on the support level, currently at 60K. The bitcoin price has already violated this support level, and if the price moves lower again, bears are likely to come back for more blood, and this time speculators may look for a more steep sell-off, which could push the price towards the 50K price mark. The chart below shows important price levels that traders needs to pay close attention.