Daily Market Commentary 28th July 2021

Chinese equity markets lead global markets lower, ahead of the FOMC rate decision, released later tonight. The Chinese are threatening further regulation on Tech and Education sectors, which has triggered a two day sell-off in stocks from this sector. This has dragged equity markets lower in Europe and the US, with the US retreating from record highs. The IMF has issued a warning that inflation is real and not transitory, which harshly contradicts the Fed’s narrative, for the last few months. The Fed will have their say later in the trading day. The EUR continued to post gains, pushing to 1.1830, while the GBP fast approaches 1.3900.

US Consumer Confidence improved, while the S&P Case Shiller Home Price Index jumped 2.4%. Durable Goods Orders drifted ahead of the Fed decision, while commodity currencies continued to suffer. The NZD fell back below 0.6950, while the AUD slipped to 0.7350, as the virus spread spikes in Sydney and lockdown restrictions are extended.

All eyes are on the Fed and their narrative surrounding inflation, QE and interest rates.