Here is what you need to know on Tuesday, July 27:
The market mood is mixed as China’s tech crackdown weighs on sentiment and contrasts US optimism. The dollar is up amid covid uncertainty and ahead of top-tier data releases. Bitcoin cools after Amazon denies accepting it.
Chinese stocks have been extending their falls amid Beijing’s crackdown on tech companies and especially those in the education sector. The damp mood impacts broader markets and pushes the safe-haven dollar higher.
On the other hand, the S&P 500 Index hit a record high on Monday, partially supported by Tesla’s better-than-expected earnings. Investors eye Alphabet, Apple and other top companies on Tuesday.
US covid cases continued their uptrend, with authorities in several jurisdictions requiring vaccinations for public workers. The rapid spread of the Delta variant is set to be one of the topics on the Federal Reserve’s agenda as it begins its two-day meeting due to conclude on Wednesday. The bank is set to leave its policy unchanged, leave the door opening to tapering its bond-buying scheme, but refrain from hinting at an imminent move.
Ahead of the Fed, investors will be eyeing US Durable Goods Orders for June, which are projected to show an increase in both headline and core figures. The Conference Board’s Consumer Confidence gauge for July is also eyed.
EUR/USD is hovering under 1.18 amid the cautious mood and after the German IFO Business Climate missed estimates. European infections have somewhat stabilized, albeit at high levels.
GBP/USD is holding above 1.38 as the UK reported a sixth consecutive day of falling coronavirus cases. The impact of Britain’s reopening on July 19 on infections is still awaited. Sterling was hit by somewhat dovish comments by Bank of England member Gertjan Vlieghe.
Gold is struggling amid the risk-off mood, slipping below $1,800. The precious metal remains correlated with US yields.
Bitcoin is trading around $37,000, down from above $40,000 it reached on Monday. Amazon denied it is considering accepting BTC as a means of payment, ending a day of speculation. Ethereum is also down, changing hands around $2,200.