Market Fundamental Context

I decided to keep a short report on what the market thinks. This is the most difficult thing for beginners to understand: what is important at the moment and how to dance from this starting point.

The main idea on the market right now is promotion within the framework of trade war deals between the US and other countries. Let me remind you that the US recently reached an agreement with Japan and some other Asian countries. Prior to that, the US reached an agreement with England, while the pause with China has been extended for a longer period. All in all, this leads to (risk on). Risk assets should perform well, especially indices. It is worth paying attention to trade negotiations between Europe and the US, as well as the independence of the Fed. In addition, the conflict between Russia and Ukraine could lead to additional sanctions against Russia and its partners, such as China, which could destroy the agreement between China and the US.😁

Risk Appetite Up: S&P 500 and NASDAQ hit new record highs; DOW surged 500+ pts, boosted by US-Japan trade deal optimism.Asia: Japan’s Nikkei rallies strongly, eyeing a record high. Broader regional sentiment is positive.Trade Outlook: Hopes rise for progress in other trade relationships as tariff fears ease, though uncertainties remain.

Top Performers: Yen leads, followed by Aussie (supported by RBA’s cautious tone and risk-on flows).Mid-pack: Euro, Sterling, and Kiwi hold steady.Laggards: USD, Loonie, and Swiss Franc.

ECB Decision Today: No rate change expected (Deposit Rate at 2.00%). Lagarde likely to stay vague amid global uncertainties. September seen as the pivotal meeting.Fed Watch: Trump to visit the Fed, first presidential visit in nearly 20 years. Raises questions on Fed independence. Succession speculation eased by Treasury’s comment on year-end timeline.

South Korea-US: Key 2+2 meeting postponed, making a pre-August 1 deal unlikely. Extension of talks seen as best-case.EU-China Summit: Held in Beijing to mark 50 years of ties. Little progress amid trade and Ukraine tensions. Summit shortened to one day, reflecting fragile relations.

Key Themes:

ECB Rate Cut Expectations Pushed BackEuro gained notably against Sterling and Swiss Franc, after ECB President Christine Lagarde downplayed near-term policy easing. Markets now lean toward an October rate cut, rather than September, supported by resilient July services PMI data and unchanged June forecasts.USD Recovery Amid Fed Stability SignsThe Dollar rebounded slightly as institutional risk faded—President Trump walked back threats to dismiss Fed Chair Jerome Powell, softening rhetoric during a symbolic Fed visit. Although frustrations remain over Powell’s rate stance, market fears of leadership disruption have eased. President Trump and Fed Chair Powell toured the Federal Reserve’s construction site on Thursday. As expected, Trump handled the media spotlight with ease, while Powell appeared notably less comfortable. Trump later dismissed speculation he might remove Powell from his post, saying:

“To do that is a big move, and I don’t think that’s necessary.”

Trade Positivity from US-AustraliaAustralia’s reopening to US beef imports marks a rare upbeat note in global trade. The decision, backed by enhanced US biosecurity measures, was celebrated by Trump as a boost for American agriculture and US-Australia relations.

We are risk on / we need retracement to open longs on indices and so on... I think dollar rebound depends on when tariffs will end, and good economic data ( right now it is neutral but still weights on USD ) Also next FED moves will likely to be cuts, they cant hold rates forever so we wait, that can make dollar weaker