Month end flows in focus

lmportant news this week:

• Fri, 31st Jul, tentative JP BoJ Interest Rate Decision.

Softer PCE weighs on Dollar as markets eye month-end flows

Markets remain mixed after the latest US PCE Price Index came in slightly weaker than expected, reinforcing expectations that inflation pressures continue to ease. The softer reading pushed the US Dollar lower, increasing speculation that the recent Dollar strength may fade further. With month-end approaching, profit-taking and portfolio rebalancing are also likely to influence price action, adding volatility across FX and equity markets.

Equities have regained momentum, supported by another strong performance from Microsoft and continued optimism surrounding corporate earnings. Most major indices are moving higher again into month-end, although traders remain cautious after the recent rally. Precious metals are trading sideways. On one hand, the weaker Dollar is supportive for Gold and Silver, but renewed risk-on sentiment is reducing demand for safe-haven assets, limiting further upside. Cryptocurrencies show a mixed picture, with Bitcoin consolidating in a sideways range while several major altcoins continue to outperform and attract renewed buying interest.

Market talk

Yesterday’s weaker PCE data has shifted attention back to the US Dollar and the outlook for Federal Reserve policy. If upcoming economic data continues to point to easing inflation, expectations for a less restrictive Fed could put additional pressure on the Greenback. However, month-end portfolio rebalancing may temporarily distort price action across asset classes. For now, improving equity sentiment, a softer Dollar, and stronger performance in selected altcoins suggest that risk appetite remains broadly constructive heading into the new month.

Tendencies in the markets

Equities positive, USD weak, crypto mixed, oil sideways, Silver weak, Gold weak.