Morning Bid: Dollar rejuvenated
* U.S. President Donald Trump unexpectedly shortened his deadline for hitting Russia with the most severe sanctions on its oil exports to date. While the market has called the president’s bluff thus far, the sheer scale of the threat may force investors to start pricing in this meaningful tail risk, writes ROI energy columnist Ron Bousso.
* The earnings season is ramping up, and investors are once again focusing on whether companies will beat or miss expectations. However, Panmure Liberum investment strategist Joachim Klement claims the major driver of share prices can be found in the bond market.
* As investors brace for the busiest week of the U.S. earnings season, debate is picking up again about the ‘Mag 7’ influence over U.S. equity indexes and whether we could be seeing the beginnings of true market broadening. Read the latest from ROI columnist Jamie McGeever.
Chart of the day
Dollar selling has abated in recent weeks, but the weekend U.S.-EU trade deal has catapulted it higher across the board as investors start to remove a tariff risk premium dogging the currency all year. The dollar's DXY index surged more than 1% on Monday, its biggest one day gain in more than two months, and has added to that on Tuesday. After just two days, it's on course for its best week of the year.
Today's events to watch
* U.S. June goods trade balance (8:30ED AM T), June retail/wholesale inventories (8:30 AM EDT) May house prices (9:00 AM EDT), July consumer confidence (10:00 AM EDT) June JOLTS job openings data (3:00 PM EDT) Dallas Federal Reserve July service sector survey (3:30 PM EDT)
* International Monetary Fund releases its update World Economic Outlook (9:00 AM EDT)
* U.S. and Chinese negotiators meet for a second day in Stockholm
* Federal Reserve's Federal Open Market Committee starts its two-day meeting on interest rates, decision Wednesday
* U.S. corporate earnings: UPS, Merck, Boeing, PayPal, Starbucks, Visa, Corning, UnitedHealth, Procter & Gamble, Stanley Black & Decker, Sysco, Incyte, Norfolk Southern, Booking, Ecolab, Carrier, PPG, Regency Centers, Caesars, Royal Caribbean, American Tower, CBRE, Teradyne, Mondelez, BXP, Seagate, DTE
* U.S. Treasury sells $44 billion of 7-year notes, $30 billion of 2-year floating rate notes
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(by Mike Dolan; editing by Sharon Singleton)
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