U.S. Open: JP Morgan Disappoints, USD Firmer, Bitcoin Down

 | Jul 16, 2019 07:47AM ET

Global equities continue to maintain a cautious tone ahead of key earnings results from the banks that will paint a clearer picture of how of the strength of the US consumer. So far Citigroup (NYSE:C) and JP Morgan noted that the US consumer is healthy. US futures are little changed as European stocks trade mix. Germany’s ZEW survey came in softer than expected and supports the argument that the ECB could act soon to mitigate the downward pressures to the eurozone’s largest economy. The ongoing trade dispute between the world’s largest economies continues to weigh on the expectations for the German export sector.h3 USD/h3

The dollar rallied against most of its trading partners, with the strongest gains against both the euro and pound. The dollar’s gains could be short-lived however if we see the morning release of US retail sales and factory data continue the recent string of further deterioration. While market pessimism is running high, traders should not be surprised if we a slightly better performance with the morning data since yesterday’s Empire manufacturing survey showed some signs of stabilization and Citigroup’s earnings highlighted a strong US consumer.

The dollar’s gains were strongest to the British pound as some analysts see the risks of a no-deal Brexit rising to a coin flip. Brexit negotiations seem to firmly be deadlocked and we will likely see tough banter until we see the next Prime Minister take office next week. The Irish backstop will once again be a key sticking point that the EU, that will likely see either candidate, Hunt or Johnson, argue it needs to go or we will see a hard Brexit. The UK economy is still surprising with decent data, labor came in mixed, while wages rose more than expected.