Eurozone bond market is changing abnormally, analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on July 22

Global Market Review

1. European and American market conditions

The three major U.S. stock index futures rose and fell mixed, Dow futures fell 0.10%, S&P 500 futures rose 0.04%, and Nasdaq futures fell 0.05%. The German DAX index fell 0.94%, the UK FTSE 100 index fell 0.00%, the French CAC40 index fell 0.67%, and the European Stoke 50 index fell 0.74%.

2. Market news interpretation

Eurozone bond market abnormal movements: The mystery of the plunge in Germany's 10-year yield and the European Central Bank's choice

⑴ On Tuesday, eurozone bond prices continued to rise the previous day, and the thin market liquidity exacerbated the decline in Germany's 10-year treasury yield. ⑵ Germany's 10-year yield, as the euro zone benchmark, is currently flat at 2.61%, after falling 7 basis points on Monday, the largest single-day drop in four months. ⑶ German 30-year government bond yield also fell 8 basis points to 3.15% on Monday and remained stable on Tuesday. ⑷ Rabobank analysts said the market volatility on Monday was "dramatic and difficult to explain", while ING pointed out that the 30-year yield changes were "unexplained by news flow alone". ⑸ Traders are also adjusting positions for the deadline for the US trade tariff remarks on August 1. ⑹ On Thursday, with the release of business activity data and the ECB meeting, market trends may be easier to explain. ⑺The market generally expects the ECB to keep interest rates unchanged, but its wording will be closely watched, and the market currently expects another 25 basis points to cut interest rates this year. ⑻Germany's 2-year yield remained flat at 1.81%, down just 4 basis points on Monday, resulting in a German yieldThe curve shows a "bullish market". ⑼ France's 10-year yield remained flat at 3.30%, Italy's 10-year yield remained flat at 3.49%. The interest rate spread between the two and Germany continued to narrow to 87 basis points.

The support rate of Japan's Ishiba cabinet fell to 22.9%, a new low since taking office

⑴ Japan Kyodo News Agency's national emergency telephone poll from July 21 to 22 showed that the support rate of Ishiba's cabinet fell to 22.9%, a drop of 9.6 percentage points from the June survey, setting a record low since taking office in October last year. ⑵ The cabinet's non-support rate rose sharply by 14.9 percentage points to 65.8%, reflecting a significant deterioration in public satisfaction with the current regime. The sharp drop in approval rating this time was the largest single drop during Shipo's cabinet term.

The ghost of "temporary inflation" reappears? Trump's tariff remarks are fiercely debated, and the Federal Reserve's interest rate decision is trapped in Rashomon

⑴ U.S. Treasury Secretary's adviser Joseph Lavorgna claimed that Trump's tariff remarks were not a cause of inflation, and believed that economists who had previously predicted rising prices were wrong. ⑵Lavorgna pointed out that although some economists see tariff impacts from consumer price inflation data, the overall data remained stable. ⑶ He emphasized that inflation is a sustained rise in prices, not a one-time price level adjustment, and implies that mainstream economists' analysis may be politically biased. ⑷ Lavorgna's eouu.cnments highlighted that debate about whether the price rise caused by Trump's tariff remarks is "temporary", just like the dispute over the nature of inflation after the epidemic. ⑸ Harvard University professor Alberto Cavallo found through model analysis that tariffs resulted in "a rapid price response, but their amplitude was still moderate relative to the announced tariff rates and vary by country of origin." ⑹Laugner's views are in contrast to a May research report by Fed economists, which shows that tariffs imposed on Chinese imports in February and March have affected consumer prices. ⑺However, the White House Economic Advisory eouu.cnmittee also released an analysis that the prices of imported goods actually fell this year. ⑻Feders have disagreements over the impact of tariffs and decisions on interest rate cuts. For example, Fed Director Chris Waller tends to cut interest rates in July, believing that tariffs have limited impact on inflation, while New York Fed Chairman John Williams is cautious. ⑼ Thierry Wizman, global foreign exchange and interest rate strategist at Macquarie Group, pointed out that the eouu.cnments of Federal Reserve officials indicate that there are differences within the Federal Open Market eouu.cnmittee and that if it continues, it may evolve into a dispute over political lines. ⑽This divergence may lead to a steeper U.S. yield curve, reflecting the uncertainty of the market about the future direction of monetary policy.

German Science and Technology Innovation Alert: One-quarter of enterprises may leave, and the capital winter is approaching?

⑴ A new study shows that one in four German technology startups are considering moving out of Germany. ⑵The main reason is concerns that the economic slowdown in Europe's largest economy is affecting its prospects for accessing venture capital. ⑶Dimensional Business Association BItkom's survey shows that about 26% of respondents are considering leaving, and only 23% believe that Germany has sufficient risk capital. ⑷Of the 152 tech startups surveyed, the vast majority (81%) said that investors showed more wait-and-see attitude due to the economic situation. ⑸ Nevertheless, Bitkom pointed out that 79% of eouu.cnpanies still expressed confidence or were very confident in achieving their financing goals. ⑹These startups require an average of 2.5 million euros (about 2.92 million US dollars) of new venture capital per year. ⑺These data reveal the severe challenges facing Germany's science and technology innovation ecosystem, and capital flows and economic prospects are profoundly affecting the strategic decisions of enterprises.

The Bank of Thailand turns to dove? The new president may cut interest rates significantly, but there is still uncertainty in the short term

⑴ At 4:38 pm Beijing time on Tuesday (July 22), Nomura Securities economists pointed out in a report that the Bank of Thailand may take a more dovish stance under the leadership of the new president Vitai Ratanakorn. ⑵ The report quoted Vitai's recent remarks, who said that policy interest rates should be significantly lowered over a period of time. ⑶Nomura Securities believes that his appointment may "weak the hawkish position of the Monetary Policy eouu.cnmittee" and support its forecast for further rate cuts. ⑷ However, Nomura Securities also pointed out that the Bank of Thailand may suspend its actions in August to assess the potential impact of U.S. tariffs and the domestic political situation. ⑸ It is expected to resume interest rate cuts in the future, and the Bank of Thailand may cut interest rates by 25 basis points in October, December and the first quarter of next year. ⑹This series of interest rate cuts will aim to support Thailand's economy and respond to external risks and internal challenges.

Wall Street giants are bullish on US stocks: But beware of three major risks

⑴ On July 21, Beijing time, Morgan Stanley reiterated its bullish position on the US stock market. ⑵ The report pointed out that strong earnings momentum is the main basis for its bullishness. ⑶The brokerage expects the S&P 500 index to reach 7,200 points by mid-next year. ⑷ Previously, Morgan Stanley expected the S&P 500 index to reach 6,500 points in the second quarter of 2026 in May. ⑸Morgan Stanley's equity strategist Michael Wilson said that as the profit base is solid next year and the Fed is closer to cutting interest rates, the valuation (currently about 22 times) may remain at its current level in the next 12 months. ⑹ However, the brokerage also reminds of potential risks: rising treasury yields, especially when 10-year treasury yields break through 4.5%, may increase stocks' sensitivity to interest rates. ⑺Morgan Stanley expects cost pressures related to tariff rhetoric to emerge later this year, which could impact eouu.cnpany profit margins and push up inflation, changing the Fed's expectations for a rate cut. ⑻ Finally, seasonal trends may cause pressure on stocks from mid-July to August. ⑼ Despite these risks, Morgan Stanley said it would buy on dips, believing that these risks could be temporary and would only lead to moderate market consolidation. ⑽It is also reported that Jefferies will also end the S&P 500 indexThe standard was raised from 5300 points to 5600 points.

UK grocery inflation soared to 5.2%! Low-income households are under pressure, Tesco's market share expands, and discount stores grow against the trend

⑴ On Tuesday (July 22), data from market research firm WorldpanelbyNumerator showed that in the four weeks ended July 13, the inflation rate of UK grocery prices rose to 5.2%. ⑵ This is the highest level since January last year, up from 4.7% reported last month, putting more pressure on low-income families. ⑶ The UK is struggling to cope with the continued high inflation, with supermarkets facing rising employee wages, new employer taxes and increased regulatory costs, while eouu.cnmodity prices are also rising. ⑷ WorldpanelbyNumerator data points out that nearly two-thirds of households said they were "very worried" about grocery costs and turned to buying supermarket own brand products. ⑸ The inflation level in the UK is higher than that of all major developed economies, about one percentage point higher than that of the United States or the euro zone. ⑹ Grocery sales (by value) rose 5.4% year-on-year in the four weeks ended July 13, thanks in part to warm weather, ice cream and sorbet sales rose 33%, and iced coffee and strawberry sales also rose sharply. ⑺In the 12 weeks ending July 13, Tesco, the largest supermarket chain in the UK, saw sales increase by 7.1% year-on-year, and its market share expand to 28.3%. ⑻Sainsbury's, the second largest retailer, saw sales increase by 5.3%, with a market share of 15.1%. ⑼ Third place Asda's sales fell 3%, lagging behind the industry, while online retailers Ocado and discount stores Lidl and Aldi performed well, with sales rising 11.7%, 11.1% and 6.3% respectively during the same period.

3. Trends of major currency pairs in the New York Stock Exchange before the New York Stock Exchange

Euro/USD: As of 20:23 Beijing time, the euro/USD rose, and is now at 1.1692, an increase of 0.01%. Before the New York Stock Exchange, the (EURUSD) price rose at the recent intraday level, opening the way for more gains after successfully getting rid of the apparent overbought situation of (RSI), as it breaks through the bearish correction trend line on a short-term basis, leveraging the dynamic support it represents on the exchange above the EMA50, which provides more bullish momentum.

GBP/USD: As of 20:23 Beijing time, GBP/USD fell and is now at 1.3481, a drop of 0.08%. Before the New York Stock Exchange, (GBPUSD) price rose in the last trade as it broke through the top of the bearish correction channel, limiting its previous trading in the short term, taking advantage of the current dynamic support of the EMA50, strengthening the continuation of the bullish scenario.

Spot Gold: As of 20:23 Beijing time, spot gold rose, now at 3397.97, up 0.03%. Before the New York market, the price of (gold) rose hard in the last session, ready to attack the main resistance level at $3400. It was supported by its trading above the EMA50. Under the bullish trend of the EMA50, it traded with a small deviation line in the short term. In addition, it abandoned the (RSI) overbought situation and entered the oversold level, representing a strong signal of weak negative momentum and was replaced by a bullish scenario, opening up the road to achieving more returns.

Spot silver: As of 20:23 Beijing time, spot silver rose, now at 38.961, up 0.15%. Before the New York market, the price of (silver) rose slightly in the final session, ready to attack the key resistance level of $39.00, taking advantage of the obvious overbought conditions on the previous (RSI) to open up the road to achieving more returns, dominance of the main bullish trend in the short term and its trading together with today's support bias line.

Crude Oil Market: As of 20:23 Beijing time, U.S. oil fell and is now at 65.600, a drop of 0.53%. Before the New York Stock Exchange, the (crude oil) price closed in the last session and closed below the $65.60 support level. In addition to the negative signal on (RSI), the negative pressure on its trading below the EMA50 continues. After the price successfully got rid of the oversold situation, it strengthened the negative situation.

4. Institutional view

Institution: The UK's fiscal deficit is high but expected to improve

Economician Philip Shaw of Tianda Asset Management pointed out in his client report that the UK's public fiscal situation may not be as bad as the latest data show. Data from the UK's National Statistics Office on Tuesday showed that the scale of government borrowing in June hit the second highest in the month, second only to the level during the 2020 epidemic, mainly driven by a surge in debt repayment. Shaw believes that debt interest payments will fall from the current high and other public expenditure items are expected to slow down in the eouu.cning months. But he also warned: "The fiscal situation so far this fiscal year is very disappointing, and (Cancellor) Reeves is almost bound to consider potential tax increases. ”

Dansk Bank: The ECB will not cut interest rates this week will be crucial to future policies

Dansk Bank said that the ECB will keep interest rates unchanged this week, and the focus of this week will be on the September meetingWhat signal. eouu.cnmunications from the ECB have been very consistent since the June meeting, with most members agreeing that the ECB is in a good position, and Schnabel (hawkish) said the threshold for another rate cut is very high. The ECB has been downplaying the fact that as long as medium-term inflation expectations are stable, inflation expectations will temporarily fall below the 2% target. The minutes of the June meeting showed that monetary policy should reduce the response to data, and only a big shock means that monetary policy response is needed. Therefore, the ECB will not cut interest rates in July; it will eventually cut interest rates to 1.75% in September, and the risk tends to keep interest rates unchanged. However, given the risks of the trade war, weak services and a slowdown in wage growth that could affect medium-term inflation expectations, the European Central Bank is still expected to cut interest rates in September. The outcome of trade negotiations will be crucial to future policy paths, as the U.S. tariffs on the EU that are above 10% will deviate from the European Central Bank's benchmark assumptions.

The above content is all about "[XM Foreign Exchange Platform]: Eurozone bond market abnormal movement, analysis of spot gold, silver, crude oil, and foreign exchange short-term trends on July 22". It was carefully eouu.cnpiled and edited by the XM Foreign Exchange editor. I hope it will be helpful to your trading! Thanks for the support!

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