Market Wrap Summary - July 31, 2026
European Equities Reach Three-Week Highs
European markets are experiencing a positive trend, with the Stoxx 50 futures up by 0.5%, marking their highest level in three weeks. Key contributors to this rise include Italy (ITA40: +0.6%), Spain (SPA35: +0.5%), and France (FRA40: +0.55%). The German DAX (DE40) futures have also seen a slight increase of 0.3%.
US Market Movements
In pre-market trading in the US, Amazon shares surged by 12% following strong financial results, while Apple shares fell by 7% due to concerns over its high valuation (P/E ratio of 41x) and supply chain issues, particularly in the memory-chip sector.
Asian Semiconductor Sector Rally
After a period of selling, shares of SK Hynix and Samsung Electronics in South Korea rebounded by over 20%, driven by improved sentiment surrounding the US AI sector. Japan’s JP225 index also gained 0.40%.
Corporate Developments
In corporate news, UK retailer Sainsbury’s announced the sale of the Argos brand for GBP 120 million. Additionally, HSBC shares in Hong Kong reached record highs following the sale of its Australian assets.
Macroeconomic Insights
Bank of Japan (BoJ) Decision
The BoJ maintained interest rates at 1.00% and kept its bond-buying plan unchanged. However, Governor Kazuo Ueda hinted at a hawkish stance, indicating that core inflation is nearing the 2% target, which could lead to accelerated rate hikes if financial conditions remain overly accommodative.
Euro Area CPI Inflation
The preliminary July CPI reading for the euro area showed inflation rising to 2.9% YoY, matching expectations and up from 2.8% previously. Core inflation was reported at 2.5% YoY, slightly above the expected 2.4%. Energy prices were the primary driver of inflation, with an annual increase of 10%.
German Labor Market
Germany's unemployment rate rose to 6.4% in July, slightly above expectations, indicating a mild cooling in the economy.
Foreign Exchange Market
The US dollar is strengthening after three days of declines, particularly against the Swiss franc (USDCHF: +0.5%), the yen (USDJPY: +0.3%), and the euro (EURUSD: -0.2%). The yen has shown volatility amid speculation of potential FX intervention by Japanese and South Korean authorities.
Commodity Market Overview
Crude Oil
Crude oil prices are recovering from earlier losses, with OIL (+1.15%) and OIL.WTI (+0.95%) rising following Iranian attacks on US facilities in Kuwait. China has also announced fuel price increases effective August 1.
Copper and Precious Metals
Copper prices are up by 0.1% due to supply disruptions in Chile caused by severe storms. In contrast, gold (GOLD: -1.2%) and silver (SILVER: -1.60%) are pulling back as the US dollar index rebounds.
Cryptocurrency Market
Ethereum is experiencing a decline of 1.6%, with volatility decreasing to 2%. Bitcoin is down 1.2%, while altcoins like Cosmos and Apecoin have seen significant weekly declines of 8.93% and 14.90%, respectively.
Geopolitical Developments
Middle East Tensions
Iran has conducted attacks on US targets in Kuwait and Bahrain, prompting China to urge Kuwaiti authorities to protect its citizens and diplomatic facilities. Peace negotiations are ongoing, with a Hamas representative indicating tentative acceptance of a phased peace plan proposed by Donald Trump.
Migration Crisis
Spain is facing a migration crisis, with around 49,000 migrants crossing into the Spanish enclave of Ceuta, leading the government to deploy troops to the region.
Key Developments to Watch
- Potential further gains in copper due to mine disruptions in Chile.
- Increased volatility in USDJPY amid speculation of coordinated FX intervention.
- Gold may see a return of capital as geopolitical tensions escalate.