US/Iran trade shots but markets remain stable

Good morning

I hope you enjoyed the tail end of last week and the weekend, it has got a little cooler here but it looks like temperatures will be on the rise again as we head towards the weekend and by this time next week we’ll be back up above 30°c. 

England have got through to the next round of the world cup by beating Panama 2-0, next up is DR Congo on Wednesday at a very reasonable 5pm kick off.  England’s cricketers look on the verge of defeat once again, still needing 270 runs with just six wickets remaining after a dismal evening session yesterday that saw four wickets fall for just 45 runs.  Ben Stokes announced his retirement from test cricket midway through the match which was rather unusual, then put himself into bat as an opener before losing his wicket after half an hour or so.  Can’t work out of it was tactics or just ‘this is my last one, I’m going to make it all about me’.

In F1, George Russel won the Austrian GP to take him into second place in the drivers championship, stil behind his team mate Antonelli who came in third.  Next up is the British Grand Prix at Silverstone this coming weekend. 

In other news, thought I’d mention that Amazon’s Prime Day drummed up some $26.5 billion in sales.  Hardly any of which came from the Evans household, which is a rare treat for me.

Main headlines over the weekend were about US and Iran trading shots, putting the ceasefire and peace talks at risk.  Strangely, markets don’t seem too disturbed Oil prices opened a touch higher but are pretty much back to where they started, Asian equities are looking mostly positive and futures pricing suggest European markets could open slightly higher this morning.  Both sides have agreed to put a stop to hostilities but this does go to show how fragile this ceasefire really is.

In terms of currencies, the majors haven’t seen a great deal of movement with GBPUSD and EURUSD now 1.3220 and 1.1405, putting GBPEUR at 1.1590, once again that foray above 1.1600 didn’t last long.  Still,, it is almost certain that the moment I say ‘it’s a no brainer, let’s sell 1.1600 calls’ the pair will jump to the 1.20’s.  Against AUD, NZD and JPY, GBP sits at 1.9155, 2.3375 and 214.00, with USDJPY still in the high 161’s.  

Some talk out of Russia that Putin has admitted Russia are facing some problems in the invasion of Ukraine, as Ukrainian drone strikes start to affect Russia’s energy infrastructure.  Bloomberg reports that peace talks could restart once US become less involved in Iran. 

Here in the UK it seems we could face our own issues as Andy Burnham looks set to replace Starmer as leader of the Labour Party and as such become PM.  Plenty of ‘tax the rich’ talk, I’ve even seen a reference to ‘taxing middle class southerners’.  He will speak later today, unveiling his plans for the UK which include giving regional mayors and councils more control over spending as he looks to move power away from Whitehall.  That sounds like potential for disaster.  It looks like Rachel Reeves is counting down the end of her days as Chancellor but it is not yet clear who will replace her, Ed Miliband seems to be a front runner.

It’s a short week this week, well at least for the US as they have Friday off to celebrate 4^th July, although this usually means the markets die a death late on Thursday.  Before then we’ll have UK GDP, EU inflation, Aussie trade and US ISM manufacturing PMIs and the usual raft of US employment data through the week, culminating in the nonfarms which are out Thursday, a day early due to the US holidays.  Plenty of central bank official speaking as well including BoEs Bailey, ECBs Lagarde and Fed’s Warsh on Wednesday. 

Have a great day...

-  10.00 EU consumer confidence

-  18.30 ECBs Lagarde speaks

-  00.30 Japan unemployment

-  02.30 RBA minutes