European Summary and Highlights 19 July

The USD gained modest ground in Europe, especially against JPY and GBP.  Some noted the large scale global IT outages added to the profit taking move in tech shares, but traders were also talking about the likely pro U.S. inflation impact of Trump top 3 priorities in last night’s speech – reducing immigration; tax cuts and protectionism. 

The focus is now on the U.S. equity market, though some note that rotation from tech to small caps ahead of a Fed rate cut is also happening and this may not be USD positive – if the FOMC meeting July 31 is dovish.

Elsewhere, GBP lost ground across the board as weaker than expected June retail sales pushed expectations of an August cut to 50%.