Hedge Funds Rotate Out of Tech and Into Consumer Staples Amid Valuation Concerns and Rate Uncertainty

Economic

Summary:

Hedge funds have made their most significant exit from tech stocks in a year, pivoting instead toward consumer staples as valuations soar and persistent rate volatility clouds the equity outlook, according to Goldman Sachs..

Tech Sector Faces Sharp Sell-Off Amid Elevated Valuations

In a marked shift in sentiment, hedge funds pulled out of technology stocks at the fastest pace in twelve months last week, even as the S&P 500 reached fresh all-time highs. According to a client note from Goldman Sachs seen by Reuters, the exodus reflects rising investor caution toward sectors with elevated valuations, particularly as 10-year bond yields remain high and unpredictable.

The S&P 500, where seven of the ten largest companies by market cap are tech-related, has surged approximately 28% from its 2025 low, while the Nasdaq Composite has climbed 38% in the same period. Despite this strength, valuations are now stretched: the forward price-to-earnings ratio for the index sits at 23.11 near five-month highs and around 30% above the recent decade average.

No Broad Shorting, But Clear Risk Reduction

Rather than aggressively shorting tech, hedge funds have unwound long positions and exited trades, indicating a shift in conviction rather than outright pessimism. The rotation was concentrated in North American and European markets, with hedge funds selling off shares across all tech segments, including semiconductors, software, and IT services.

This repositioning marks the largest tech sector liquidation by hedge funds since July 2024, according to Goldman. The move underscores a broader market reassessment: while high-growth tech names had led much of the post-2025 recovery, their sensitivity to interest rates and lofty valuations now make them vulnerable to macroeconomic uncertainty.

Consumer Staples Emerge as Safe Haven

In contrast to the tech retreat, consumer staples have seen a notable inflow. For the fourth consecutive week, hedge funds increased their exposure to companies in the food, beverage, and personal care sectors. These trades were almost entirely long positions indicating confidence in rising prices rather than hedging strategies.

The rotation suggests hedge funds are seeking stability and defensiveness amid growing uncertainty around interest rates and stretched equity valuations. Florian Ielpo of Lombard Odier Investment Managers noted that future equity gains may rely on a decline in long-term interest rates, but current market dynamics offer no clear signal that such a shift is imminent.

Positioning for Resilience Amid Macroeconomic Ambiguity

The hedge fund flight from tech and shift toward consumer staples signals a recalibration of risk in an overheated equity market. With growth stocks trading at historically rich valuations and yields remaining elevated, institutional investors are rotating into sectors with steadier earnings and lower sensitivity to macro volatility.

Until there is greater clarity on the Federal Reserve’s rate trajectory or a sustained cooling in bond yields, this defensive posture may persist. While the tech sector’s long-term prospects remain tied to innovation and AI expansion, hedge funds appear to be taking a tactical pause, opting instead for resilience over momentum.

Source: Reuters

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Gerik

Economic

Sales Padding Through Pre-Insurance Raises Credibility Concerns

A Reuters investigation reveals a troubling industry-wide tactic used by Chinese car manufacturers and dealerships: insuring vehicles before they are sold to consumers. The practice intended to register cars as "sold" for the sake of hitting internal sales targets has grown more prevalent amid a fierce price war and chronic overcapacity in the world’s largest auto market. While previously reported at select EV brands like Neta and Zeekr, the issue now appears far more systemic.

A review of 97 consumer complaints across three of China’s leading platforms 12365auto.com, China.com’s 315 platform, and Sina’s Black Cat points to brands such as BYD, Toyota, Volkswagen, Buick, Changan, Li Auto, and Geely being implicated. In many cases, consumers only learned after the transaction that their new vehicles had been insured under third-party names prior to purchase. This not only compromises customer transparency but misrepresents retail sales data to investors and regulators.

Inventory Distortion and Misleading Demand Signals

This form of data manipulation distorts the real state of dealer inventories and exaggerates perceived demand. Yale Zhang, head of Automotive Foresight, warned that misreading such inflated wholesale numbers could lead automakers to schedule unnecessary production increases, further worsening overcapacity. As more than 100 brands compete in China’s saturated market, reliance on sales-padding tactics may be masking a deeper issue: structural demand weakness and a fragile retail environment.

From 2021 to 2025, 48 verified complaints on 12365auto.com alone involved customers discovering their cars had been insured before purchase. Another 49 complaints across China.com and Black Cat showed similar patterns. In 14 cases, dealers explicitly admitted to the tactic being used to meet sales targets. Buyers described feeling deceived and misled, particularly when vehicles were registered in names not their own, raising both legal and ethical questions.

In parallel, Reuters identified five Chinese court rulings between 2023 and 2025 involving consumers who sued dealerships over this issue. In three cases, the courts sided with buyers and awarded compensation. Although only a small sample, these legal outcomes suggest growing consumer awareness and judicial willingness to intervene.

Corporate and Regulatory Responses Diverge

Several automakers, including GM China and Volkswagen, denied using pre-insurance schemes to pad figures, though both promised to investigate complaints. Honda’s GAC joint venture stated it prohibits such behavior and pledged sanctions against offending dealers. However, other key players BYD, Changan, Nissan, and Li Auto did not respond to Reuters’ inquiries, deepening concern over corporate accountability.

Official media in 15 provinces documented at least 29 cases where local dealers, including those representing brands such as SAIC VW, GAC Toyota, and Dongfeng Nissan, acknowledged using the practice to book sales. In many cases, regional media are state-affiliated, highlighting the issue’s growing visibility and potential for regulatory consequences.

The Rise of "Zero-Mileage" Used Cars

Vehicles insured before being delivered to buyers are often dubbed “zero-mileage used cars” in China. Though physically new, they are technically second-hand due to their registration history. This phenomenon has emerged in the wake of a pricing war that began in 2023, when Li Auto and others started using insurance data to report weekly sales on social media. Critics argue this practice has warped competition and created unsustainable sales pressure, especially among smaller brands struggling to remain solvent.

The China Association of Automobile Manufacturers (CAAM) recently condemned reliance on insurance-based sales rankings, calling them unreliable and a factor behind increasingly “vicious” market competition. CAAM’s statement indicates rising concern within the industry that the credibility of Chinese auto data is deteriorating a situation that could deter investors and challenge the legitimacy of state-reported figures.

Short-Term Gains at the Expense of Market Integrity

While padding sales figures through pre-insurance may help automakers hit quarterly targets, the long-term consequences for market transparency, consumer trust, and industrial efficiency are severe. As China’s auto market approaches a critical inflection point where survival will depend more on product quality, innovation, and global competitiveness than manipulation the current trend risks eroding both reputations and regulatory trust.

Unless curbed through coordinated enforcement and corporate reform, the systemic use of "zero-mileage" sales will continue to distort an already fragile market. Consumer backlash and court involvement suggest the issue has moved beyond isolated malpractice and now challenges the integrity of China’s automotive sector as a whole.

Source: Reuters

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Glendon

Economic

European companies were left wondering on Monday whether to cheer a hard-won US trade deal or lament a still sharp jump in tariffs versus those in place before President Donald Trump's second term.

A day earlier, European leaders heralded a framework trade deal with the United States that would impose a 15% import tariff on most EU goods, averting a spiralling battle between two allies which account for almost a third of global trade.

Although the deal is better than the 30% rate threatened by Trump and will bring clarity for European makers of cars, planes and chemicals, the 15% baseline tariff is well above initial hopes of a zero-for-zero agreement. It is also higher than the US import tariff rate last year of around 2.5%.

"Those who expect a hurricane are grateful for a storm," said Wolfgang Große Entrup, head of the German Chemical Industry Association VCI, calling for more talks to reduce tariffs that he said were "too high" for Europe's chemical industry.

"Further escalation has been avoided. Nevertheless, the price is high for both sides. European exports are losing competitiveness. US customers are paying the tariffs."

The deal, which also includes US$600 billion (RM2.5 trillion) of EU investments in the United States and US$750 billion of EU purchases of US energy over Trump's second term, includes some exemptions, even if details are still to be ironed out.

Carmakers Volkswagen and Stellantis, among others, will face the 15% tariff, down from 25% under the global levy imposed by Trump in April.

Stellantis shares rose 3.5% and car parts maker Valeo was up 4.7% in early trade. German pharma group Merck KGaA gained 2.9%.

Aircraft and aircraft parts will be exempt — good news for French planemaker Airbus — as will certain chemicals, some generic drugs, semiconductor equipment, some farm products, natural resources and critical raw materials.

Shares in the world's biggest chip maker ASML rose more than 4%, among the biggest gainers on the pan-European STOXX 600 index.

Still to be negotiated

Dutch brewer Heineken cheered the deal, with CEO Dolf van den Brink welcoming the certainty it brought.

The world's number two brewer sends beer, especially its namesake lager, to the US from Europe and Mexico, and has also suffered from the indirect effect on consumer confidence in important markets like Brazil.

The rate on spirits that could impact firms such as Diageo, Pernod Ricard and LVMH, is still being negotiated though.

"It seems that in coming days there could be negotiations for certain agricultural products, zero for zero, which is what the European and US sectors have been calling for," said Jose Luis Benitez, director of the Spanish Wine Federation.

Benitez added that a 15% rate could put Europe at a disadvantage versus other wine exporting regions subject to 10% tariffs.

"If there are any exceptions, we hope that the (European) Commission understands that wine should be one of them."

Lamberto Frescobaldi, the president of Italian wine body UIV, said on Sunday that 15% tariffs on wine would result in a loss of €317 million over the next 12 months, though the group was waiting to see the final deal text.

Others said that the agreement — which followed on the heels of a similar one with Japan — helped bring greater clarity for company leaders, but still threatened to make European firms less competitive.

"While this agreement puts an end to uncertainty, it poses a significant threat to the competitiveness of the French cosmetics industry," said Emmanuel Guichard, secretary general of French cosmetics association Febea, which counts L'Oreal, LVMH and Clarins among its members.

Source: Theedgemarkets

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Daniel Carter

Central Bank

Economic

Key points:

● Philippine central bank on track to cut rates twice in 2025.

● Timing of rate cuts will hinge on growth, inflation outlook.

● Philippine-U.S. trade deal reduces economic uncertainty.

The Philippine central bank is committed to maintaining its easing bias and is on course to cut policy rates twice this year, its governor said on Monday, though the timing will depend on economic growth and inflation.

"We're still on that same easing cycle," Governor Eli Remolona told Reuters. "We're doing baby steps. That's a good sign, that means we're on track."

The Bangko Sentral ng Pilipinas (BSP) is closely monitoring economic indicators to guide its decisions, including whether to implement a rate cut at its upcoming August 28 policy meeting. He emphasised that weaker-than-expected growth and better-than-projected inflation would be key triggers for further easing.

"If the data on growth is worse than we thought, and inflation is better, that would be a good time for another rate cut," Remolona said. "We have to look at the data twice, three times."

In June, the central bank lowered its key rate by 25 basis points to 5.25%, its lowest in two-and-a-half years, a second consecutive cut to support the economy.

Annual inflation has stayed below 2% since March, and the central bank expects the pace of price increases to remain at that level, including in July. Inflation was 1.4% in June.

The governor was optimistic growth in the second quarter would be better than the 5.4% expansion in the first three months of the year.

The Philippines' trade deal with the United States has reduced uncertainty, and that should bode well for growth, Remolona said.

Last week, U.S. President Donald Trump announced new import duties of 19% for goods from the Philippines, slightly below the rate of 20% he threatened earlier this month.

"Growth will not slow down as much as before, but there's still residual uncertainty," he said.

Still, there are risks that could cloud the country's growth outlook, including tensions in the Middle East, especially surrounding oil prices and regional conflict, he said.

In shaping its decisions, the BSP also considers global monetary policy conditions, including the U.S. Federal Reserve’s outlook, though the governor said the Fed's influence on BSP's actions has waned in recent years.

"It will carry some weight, not a lot of weight, not as much as before," he said, citing a more sophisticated market and the peso'srelative strength even without closely matching the Fed's rate path.

Remolona also flagged threats to central bank independence as a significant concern, warning of long-term implications.

"Wherever the central bank loses its independence, regardless of fiscal policy, it leads to high inflation," he said, adding central banks view what is happening in the United States with "concern".

Despite external uncertainties, Remolona highlighted the Philippines' solid domestic fundamentals, including ample reserves, stable remittances and slowing inflation.

"Domestically, we're in very good shape," he said.

Source: Reuters

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Gerik

Economic

A Deal That Calms Markets but Sparks Competitive Concerns

The recent US-EU trade agreement, reached just before President Trump’s August 1 tariff deadline, has been received with both relief and frustration across Europe’s business landscape. While the accord defused a potentially damaging transatlantic trade conflict, European companies are now contending with a 15% import tariff on most EU goods well above the pre-2021 average of 2.5% and significantly short of the zero-for-zero tariff scenario many industries had lobbied for.

Wolfgang Große Entrup, head of the German Chemical Industry Association, aptly summarized the sentiment: “Those who expect a hurricane are grateful for a storm.” His statement reflects a mood that is cautiously optimistic about the avoidance of crisis but wary of the long-term costs. The agreement offers predictability, but at the price of lost competitiveness for European exporters and increased costs for US buyers.

Tariff Reductions Offer Mixed Results by Sector

The impact of the new tariff regime varies widely across sectors. Automakers such as Volkswagen and Stellantis, previously hit with 25% levies, will now face a reduced 15% tariff. This relief was positively received by financial markets, with Stellantis shares rising 3.5% and automotive parts supplier Valeo climbing 4.7%. However, the 15% tariff still places EU producers at a price disadvantage relative to non-European competitors, particularly in sectors like wine and cosmetics where margins are tight and competition is global.

Some high-profile sectors secured exemptions, including aircraft and aircraft parts a significant win for Airbus as well as key components like semiconductor equipment, generic pharmaceuticals, certain chemicals, and raw materials. ASML, the Dutch chipmaker, saw its shares jump over 4% following the announcement, reflecting investor optimism about the partial shielding of critical industries.

Agriculture and Spirits Await Clarity

Negotiations are still ongoing for sensitive product categories such as wine and spirits. Wine producers, in particular, have expressed deep concern about the potential impact of a 15% tariff. Lamberto Frescobaldi, president of Italy’s UIV, warned of a potential €317 million loss in exports over the next 12 months if the tariff is upheld. Jose Luis Benitez of the Spanish Wine Federation echoed that sentiment, urging EU negotiators to push for zero-for-zero outcomes, especially in agriculture where tariff disparities could favor producers in regions like South America or Oceania.

The European Commission is under mounting pressure to ensure that traditionally strong export categories, such as French and Italian wines and spirits from companies like Pernod Ricard and Diageo, are not unfairly disadvantaged in the final agreement.

Broader Market Response Reflects Relief, Not Celebration

Market reactions were largely positive but measured. The broader STOXX 600 index saw gains, particularly in sectors that received exemptions or favorable adjustments. However, Emmanuel Guichard of France’s FEBEA (the French cosmetics industry association) noted that while the deal ends uncertainty, it still imposes structural disadvantages on European brands like LVMH, Clarins, and L’Oréal, whose pricing power may be undermined by the new import tax.

The US-EU trade framework offers a much-needed reprieve from escalating tariff threats and gives European businesses greater short-term certainty. Yet the new 15% baseline tariff though lower than Trump’s original 30% threat remains significantly higher than historic levels and could undercut Europe’s position in global trade if left unmodified.

For now, the deal appears to have stabilized the transatlantic relationship, but the real challenge lies ahead. European companies and policymakers must continue negotiating product-level exceptions and advocating for more balanced terms. Without additional progress, what was hailed as a diplomatic win may gradually reveal itself as a structural loss for Europe's export-driven economy.

Source: Reuters

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Gerik

Economic

Trade Pressure as a Diplomatic Lever

In a bold diplomatic maneuver, President Donald Trump leveraged the threat of punitive tariffs to push Thailand and Cambodia into immediate peace talks after days of deadly clashes along their shared border. The talks, facilitated by Malaysian Prime Minister Anwar Ibrahim under ASEAN’s banner, are the first formal engagement since violence erupted on July 24. Acting Thai Prime Minister Phumtham Wechayachai and Cambodian Prime Minister Hun Manet are scheduled to meet Monday afternoon in Kuala Lumpur, with both Washington and Beijing sending diplomatic representatives to monitor proceedings.

Trump’s approach mirrored past efforts, such as his claimed role in halting India-Pakistan border tensions, by tying trade incentives directly to peace outcomes. In this case, his administration warned that trade agreements would be withheld if hostilities continued. The high-stakes approach triggered a flurry of diplomatic calls over the weekend, culminating in Monday’s meeting.

Diverging Expectations and Lingering Hostility

Despite agreeing to talks, Thailand remains skeptical of Cambodia’s intentions. Phumtham publicly questioned Phnom Penh’s sincerity, asserting that discussions would prioritize civilian safety and border integrity. Thai forces reported ongoing skirmishes early Monday, and Cambodian officials accused Thailand of shelling multiple sites.

While Thailand insists on linking a ceasefire to clear territorial resolution and military withdrawal, Cambodia has signaled a willingness for an unconditional cessation of violence. This divergence underscores the challenges ahead, especially as both nations accuse each other of civilian attacks and have deployed heavy artillery and fighter jets across a 500-mile border.

Military Escalation and Humanitarian Toll

The recent conflict marks the worst escalation since 2011, a period similarly marked by disputes over border demarcation near the historic Preah Vihear temple. This latest flare-up has killed over 30 people and displaced more than 150,000 civilians. Thailand has reported 22 deaths, including eight soldiers, while Cambodia confirms 13 casualties, five of whom were military personnel.

Fighter jets, including Thai F-16s and Swedish-made Gripens, have been mobilized as the intensity of the confrontation deepens. Reports from both sides describe reciprocal accusations of targeting civilians, fueling regional concern over the possibility of broader destabilization.

Economic Stakes Drive UrgencyTrump’s tariff ultimatum comes at a critical time for Thailand. The country has been seeking to reduce a steep 36% tariff on its exports to the US and narrow a $46 billion trade surplus. Failure to de-escalate could derail its trade agenda, especially as the US recently concluded deals with regional competitors like Indonesia, Vietnam, and the Philippines.

Trump, who is pushing for finalized trade frameworks before his August 1 deadline, signaled optimism about the situation after his calls with both Southeast Asian leaders. On his Truth Social account, he wrote, “When all is done, and Peace is at hand, I look forward to concluding our Trading Agreements with both!”

ASEAN’s Role Undermined by US Intervention

The crisis has raised questions about ASEAN’s relevance in regional conflict resolution. Fuadi Pitsuwan, an international relations lecturer at Thammasat University, criticized both nations for relying on outside intervention rather than seeking ASEAN-led mediation sooner. He noted that Trump’s framing of the talks as a diplomatic victory is part of a broader pattern where economic leverage substitutes traditional multilateral diplomacy.

Monday’s peace talks offer a glimmer of hope for ending the region’s most severe border conflict in years, but success will depend on aligning the diverging terms set by Thailand and Cambodia. Trump’s aggressive tariff diplomacy may have forced the two sides to the table, but achieving a sustainable ceasefire and preventing future clashes will require more than short-term coercion. With geopolitical players like the US and China now directly involved, the outcome could reshape not only bilateral relations but the broader strategic balance in Southeast Asia.

Source: Reuters

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Samantha Luan

Commodity

Forex

Interest in the precious metal remains subdued, but in the context of new tariff threats and potential disagreements between the Fed and the White House, demand could strengthen. Technically, holding above 3,350 preserves the potential for growth towards 3,440-3,450, with a possible upward breakout if the positive backdrop is confirmed.In the coming days, focus will be on the Federal Reserve meeting and the details of trade agreements with China and the EU, as they will likely set the direction for XAUUSD this week.

XAUUSD forecast for this week: quick overview

● Weekly dynamics:

Gold ends the week in a sideways range between 3,350 and 3,435 USD per ounce. Pressure on the metal came from rising interest in risk assets due to optimism about US trade agreements with Japan and the EU. However, escalating tariff rhetoric towards India and South Korea and uncertainty in negotiations with China keep gold from a deeper correction. The weekly low is 3,351, while the high is 3,439.

● Key support:

3,350 is the nearest level closely watched by the market. A breakout below this level would open the way to 3,300 and then to the more significant support at 3,245. If pressure and yields rise further, a decline to 3,118 is possible.

● Key resistance:

The key resistance area lies between 3,435-3,440. A breakout in this area on the daily timeframe will confirm the market’s readiness to resume the uptrend with targets at 3,500-3,520.

● Fundamental factors:

Gold remains influenced by news on US trade talks and expectations regarding the Federal Reserve rate. The upcoming negotiations with China this week could affect demand for safe-haven assets. Another important factor is the prospect of policy easing: markets are pricing in a pause in July and a possible rate cut in October. This supports gold amid a moderately strengthening dollar.

● General sentiment:

Moderately bullish. The technical picture remains neutral to positive, as prices stay above 3,350. Indicators point to consolidation with upward potential. A breakout above 3,440 would signal growth towards the spring highs.

● XAUUSD weekly forecast:

The baseline scenario suggests consolidation with a bullish bias, with targets at 3,440 and, if broken, at 3,500-3,520. The support level lies at 3,350, with further levels at 3,300 and 3,245 in case of a breakout. Federal Reserve decisions and trade news will act as key catalysts for movement.

Gold fundamental analysis

Gold trades below 3,390 per troy ounce and remains under local and rather emotional pressure. Optimism around potential US trade deals with key partners has reduced the metal’s appeal as a safe-haven asset.

The European Union is nearing a deal with Washington that would introduce a broad 15% tariff on EU goods, avoiding the harsher 30% rate scheduled to take effect on 1 August. The new structure may also include automobiles, mirroring the format already agreed upon in the deal between the US and Japan.However, caution remains as negotiations with South Korea and India are still ongoing, and the threat of tariffs ranging from 15% to 50% remains valid.

Investors are also awaiting progress in dialogue with China: US Treasury Secretary Scott Bessent is scheduled to meet with Chinese representatives in the final week of July.On the monetary policy front, focus is on this week’s Fed meeting. The market expects the rate to remain unchanged. However, a potential easing in October is already being priced in.

XAUUSD technical analysis

On the daily chart, Gold (XAUUSD) is consolidating within a range and trading near 3,384 per ounce. Prices have pulled back from the recent local high of 3,439 and remain below the key resistance level, showing no clear momentum.

The Bollinger Bands are gradually narrowing, indicating lower volatility and the possible approach of a directional move. The nearest resistance levels are at 3,439 and 3,501 – the local highs of the spring rally. The support level lies at 3,245 and then at 3,119.

The MACD oscillator maintains a weak bullish signal: the histogram remains positive, and the MACD line is slightly above the signal line, but without a clear impulse. The Stochastic is approaching overbought territory; a downward crossover could lead to a correction.

Overall, Gold is trading sideways between 3,350 and 3,440. A breakout of either boundary will signal a directional move. A rise above 3,439 will open the path to 3,500, while a fall below 3,245 will increase pressure on the metal.

Key drivers in the coming days will be news on international trade and the outcome of the Fed meeting.

XAUUSD trading scenarios

The fundamental backdrop remains mixed. On one hand, demand for gold as a safe-haven asset has declined amid optimism over US trade deals with key partners – Japan and the EU. On the other hand, persistent uncertainty in talks with China, threats of higher tariffs for several countries, and expectations of Fed policy easing in October continue to support demand for the metal. In this environment, gold consolidates below the 3,440 level, showing restrained dynamics.

● Buy scenario

Long positions can be considered if gold holds above the 3,350-3,360 area. This would confirm the resilience of the support level and market readiness to recover towards 3,435 and then 3,500. A consolidation above 3,440 on the daily chart would open the way to the spring highs near 3,500-3,520.

The optimal entry point remains a pullback to the 3,350 area with confirmation in the form of a candlestick pattern or a bounce from the Bollinger midline. This scenario is preferable in case of a weakening dollar, rising inflation expectations, and signs of cooling in the US economy.

● Sell/short scenario:

Short positions become relevant if prices break below the 3,350 support level and consolidate below 3,320. This would signal weakening bullish momentum and the start of a downward exit from the range.Downside targets include the 3,245 and 3,120 levels. The correction could continue if US bond yields rise, the dollar strengthens, and the Fed signals a pause in its easing cycle.The market is balancing between technical consolidation and fundamental risk reassessment. As long as gold holds above 3,350, a neutral-positive bias remains.

Summary

Gold remains in a consolidation mode within the 3,350-3,435 range, staying sensitive to fundamental news. Investors assess the prospects of Fed policy easing, the progress of US trade agreements with key partners, and the general state of global demand for safe-haven assets. Despite local pressure from the dollar and rising Treasury yields, the metal finds support from geopolitical and trade uncertainty.

The current sideways corridor reflects the market’s wait-and-see stance. A consolidation below 3,350 or above 3,440 will serve as a technical signal for a new impulse. Until then, movement remains limited with moderate volatility.In an uncertain environment, short-term traders may focus on range-bound trading – rebounds from boundaries and confirmed reversal signals at key levels. It is worth paying increased attention to the Fed’s rhetoric and the course of negotiations with China.