Preliminary Consumer Sentiment Rises to 61.8 In July, 1-year Inflation Fears Drop, But Uncertainty Persists

Economic

Commodity

Summary:

The gold market is trading higher ahead of the weekend after the latest data showed consumer sentiment in the U.S. improving more than expected, while near-term inflation expectations pulled back.

The University of Michigan announced on Friday that the preliminary reading of its Consumer Sentiment survey for July was 61.8, which was higher than June’s final reading of 60.7. The data was better than expectations, as the consensus forecast of economists called for a 61.5 reading.

“Consumer sentiment was little changed from June, inching up about one index point,” said Surveys of Consumers Director Joanne Hsu. “While sentiment reached its highest value in five months, it remains a substantial 16% below December 2024 and is well below its historical average.”

The gold market is trading near the upper edge of its daily range following the 10 am EDT data release, with spot gold last trading at $3,356.84 per ounce for a gain of 0.53% on the day.

The components of the July index were mixed, with a sharp rise in short-run expected business conditions and a significant drop in one-year inflation expectations, but longer-run inflation fears persisted.

“Short-run business conditions improved about 8%, whereas expected personal finances fell back about 4%,” Hsu noted. “Consumers are unlikely to regain their confidence in the economy unless they feel assured that inflation is unlikely to worsen, for example if trade policy stabilizes for the foreseeable future. At this time, the interviews reveal little evidence that other policy developments, including the recent passage of the tax and spending bill, moved the needle much on consumer sentiment.”

Year-ahead inflation expectations also fell for a second straight month, dropping from 5.0% in June to 4.4% this month. “Long-run inflation expectations receded for the third consecutive month, falling back from 4.0% in June to 3.6% in July,” she said. “Both readings are the lowest since February 2025 but remain above December 2024, indicating that consumers still perceive substantial risk that inflation will increase in the future.”

Source: Kitco

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Adam

Commodity

Market Overview

Oil markets remained volatile on Friday as WTI crude held onto recent gains near $ 67.60 per barrel, buoyed by renewed supply risks and a brighter demand outlook. Output disruptions of up to 150,000 barrels per day in northern Iraq, alongside broader geopolitical tensions, stoked market uncertainty.

On the demand side, resilient U.S. economic indicators and stronger-than-expected Chinese GDP data helped ease growth concerns. Meanwhile, a sharp drop in U.S. crude inventories, despite rising production, underscored solid consumption.

However, prices still faced weekly losses of over 1% as easing sanctions concerns tempered bullish momentum, highlighting the market’s sensitivity to shifting global risk dynamics.

Natural Gas Price Forecast

Natural Gas (NG) Price Chart

Natural gas prices are holding firm at $3.578, staying within a rising parallel channel after rebounding from the $3.19 low. The 50-EMA at $3.476 now acts as dynamic support, while the 200-EMA at $3.620 remains a key resistance zone.

A clean breakout above $3.600 could open the door to $3.622 and $3.678, with $3.752 as the next upside target. On the downside, a break below $3.510 may trigger a correction toward $3.419 and $3.292.

As long as the price stays inside the ascending channel and above the 50-EMA, the bias remains bullish. Traders should watch for a breakout or rejection near the $3.600 level to determine the next directional move.

WTI Oil Price Forecast

WTI Price Chart

WTI crude oil is attempting a bullish breakout above $67.88 after bouncing from a rising trendline near $65.56. Price now trades above both the 50-day EMA ($67.17) and 200-day EMA ($66.78), signaling strengthening short-term momentum.

Immediate resistance sits at the 23.6% Fibonacci level ($67.11), followed by $69.00 and $70.56. A sustained move above $69.00 would expose $72.11 as the next upside target. On the downside, support is seen at $67.12 and $65.56. A drop below $65.56 could open the door toward $64.02.

Overall structure suggests cautious bullishness, but momentum hinges on holding above $67.12 and breaking through $69.00.

Brent Oil Price Forecast

Brent Price Chart

Brent crude is trading near $69.81, showing signs of strength after rebounding off the $69.00 support level. The price is moving within an ascending channel and remains above the 200-EMA ($68.67), with the 50-EMA ($69.08) acting as dynamic resistance.

A clean break above $70.31 could open the door to $71.50 and possibly $72.83. On the downside, support is firm at $69.00, followed by $67.66 and $66.88. As long as the price stays within the rising channel and holds above key EMAs, the short-term structure favors cautious upside potential.

Traders will be watching for a decisive close above $70.31 to confirm renewed bullish momentum.

Source: fxempire

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Adam

Economic

The Japanese yen is showing little movement on Friday. In the North American session, USD/JPY is trading at 148.69, up 0.06% on the day. On the data calendar, Japan's inflation rate eased in June. It's a light day in the US, highlighted by UoM consumer sentiment and inflation expectations.

Japan's core CPI eases to 3.3%

Inflation in Japan fell in June as expected and the yen is showing little movement today. Headline CPI dropped to 3.3% y/y from 3.5% in May, matching the consensus. This was the lowest level since Nov. 2024, as prices for electricity and gasoline rose more slowly in June. Food prices were up 7.2%, the most since March, as rice prices soared 100%. Monthly, CPI eased to 0.1%, down from 0.3% in May. Core inflation, which excludes fresh food but includes energy, fell to 3.3% from 3.7%, in line with the consensus and the lowest pace since March.

The inflation numbers come just before an election for Japan's Upper House of Parliament on Sunday. The ruling coalition is in danger of losing its majority, and if that happens, it will likely impact yields and the yen next week.

The Bank of Japan meets next on July 31 and is expected to continue its wait-and-see approach and hold interest rates. The BoJ hiked rates in January but hopes for a series of rate increases were dashed after US President Trump promised and delivered tariffs on many US trading partners, including Japan.

Trade talks between the US and Japan have bogged down and Trump has threatened to hit Japan with 25% tariffs if an agreement isn't reached by Aug. 1. In this uncertain environment, the BoJ isn't likely to raise interest rates.

USD/JPY Technical

USD/JPY is testing resistance at 148.66. Above, there is resistance at 1.4882

148.44 and 148.28 are the next support levels

USDJPY 4-Hour Chart, July 18, 2025

Source: marketpulse

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Michelle

Political

France, Germany, and the UK told Iran on Thursday they’ll bring back United Nations sanctions unless Tehran gets serious and restarts nuclear talks immediately.

They want actual results on the table before August is over. No more delays. The pressure’s real this time. The three countries, called the E3, spoke with Iran’s Foreign Minister Abbas Abbas Araghchi, and they weren’t asking nicely.

It was their first direct contact since Israel and the U.S. bombed Iranian nuclear sites last month. That changed everything. Now the Europeans are watching Iran’s next move like hawks.

A French diplomatic source said the E3 pushed hard for “a verifiable and lasting deal” and warned that the snapback mechanism would be triggered if Iran kept stalling.

Araghchi fires back, blames U.S. for walking away

Araghchi jumped on X and made it clear he wasn’t impressed. He said he told the Europeans: “It was US that left the negotiation table in June this year and chose a military option instead, not Iran.” He said if the E3 or EU wanted to be taken seriously, they should stop throwing around threats. He said:

“They should act responsibly, and put aside the worn-out policies of threat and pressure, including the ‘snap-back’ for which they lack absolutely [any] moral and legal ground.”

Araghchi made one thing clear: Iran is open to talking, but only “when the other party is ready for a fair, balanced, and mutually beneficial nuclear deal.” Translation: no talks unless the West stops playing tough guy. Iran isn’t going to roll over.

The 2015 nuclear deal is still technically in place, at least for now. The U.S. walked away from it in 2018, but France, the UK, Germany, China, and Russia are still on board.

Under the agreement, if Iran breaks the rules, any one of those remaining members can launch the snapback and bring back UN sanctions, and it would take just 30 days to kick in. After that, Iran would be back under international pressure with no way out unless it complies.

A French source added, “The ministers also reiterated their determination to use the so-called ‘snapback’ mechanism in the absence of concrete progress toward such an agreement by the end of the summer.” No specifics were given, but the message was loud: Europe’s done waiting.

Right now, IAEA inspectors are no longer inside Iran. That’s a big problem. No one has eyes on the nuclear facilities, and that makes any real deal basically impossible. Without verification, there’s nothing to talk about.

Iran says it’s open to diplomacy, but there’s nothing on the calendar. A sixth round of talks with the U.S. isn’t even close to happening. Diplomats who allegedly spoke anonymously said the August deadline is a long shot.

Still, some hope remains. Two European diplomats said they’re trying to sync with Washington in the coming days. The goal? Get talks going again. But it’s not clear if that’ll happen before August runs out. And if it doesn’t, the snapback will probably go live.

Source: CryptoSlate

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Warren Takunda

Economic

Pound Sterling has corrected higher against the Euro, Dollar and some other major peers over the second half of the past week, as the July selloff fades from exhaustion more than anything else.

Heading into the week, some technical indicators spoke of the need for some near-term gains to correct from oversold levels, while the bad news concerning the UK economy is now generally well understood and incorporated into exchange rates.

This left Sterling ripe for a rebound, with the trigger for that move coming on Thursday following the release of above-consensus UK wage data that spoke of enduring inflation pressures, which should limit the Bank of England's ability to cut interest rates too fast, or too far.

With foreign exchange markets moving away from Trump-related trade drivers, the focus returns to relative interest rate policy, ensuring the steady build-up of bets in favour of quicker Bank of England easing has weighed on the Pound.

This means Wednesday's hot inflation figures, combined with Thursday's inflationary wage numbers, send a reminder that the repricing lower of UK interest rate expectations will be limited, offering the Pound a hand.

"We downgrade our GBP outlook but maintain our view that it should recoup some ground vs the EUR & the USD in H225 and further outperform the EUR in 2026," says Valentin Marinov, Head of G10 FX Strategy at Crédit Agricole.

The Pound to Euro exchange rate (GBP/EUR), which is now at 1.1550, looks like it wants to even out above 1.15, which was a level tested earlier this week and now looks to be forming a level of resistance.

Pound Sterling Looks to Build On Recent Gains Made Against Euro and Dollar_1

Above: GBP/EUR is flattening out. RSI in lower panel reached oversold on Monday and is rebounding, reflecting the pick-up in spot above 1.15.

The EUR/GBP measure is at 0.8656. "We slightly adjusted our forecasts higher to reflect the new outlook and now see EUR/GBP around current levels in the coming months but edging slightly higher in 2026," says Patrick Ernst, FX Strategist at the UBS Chief Investment Office.

The Pound to Dollar exchange rate (GBP/USD) is meanwhile still very much dependent on the U.S. side of the equation. Here, the Dollar has been regaining recently lost ground, pushing GBP/USD down to 1.34 having been as high as 1.3750 at the start of the month.

"The Dollar rebound can gather some pace," says Francesco Pesole, FX Strategist at ING Bank N.V.

The dollar index, a broad measure of U.S. Dollar performance, is on track for a second consecutive week of gains, having rallied over 2% since the 1 July low of 96.50.

"While modest compared to the steep losses in the first half of 2025, the dollar has realigned with core macro drivers and notably re-established its positive correlation with 10year yields. One of our key calls this summer is that this return to dollar ‘functionality’ reduces the likelihood of new selloffs," adds Pesole. Pound Sterling Looks to Build On Recent Gains Made Against Euro and Dollar_2

Pound Sterling Looks to Build On Recent Gains Made Against Euro and Dollar_2

Above: GBP/USD has found some near-term support, but could yet face a challenging summer.

Although the key GBP/USD and GBP/EUR pairs are forming potential bases, the prospect for a resumption of the recent selloff cannot be discounted.

For one, UK macroeconomic data is still a concern, with the UK labour market report on Thursday confirming an eighth consecutive month of job losses, while last week's GDP print made for the second consecutive monthly contraction.

"The mood surrounding the pound has soured in recent weeks and dovish comments by BoE governor Bailey on the labour market and interest rates put investors on notice for potentially further losses ahead," says Kenneth Broux, a market strategist at Société Générale. "A return below 1.34 could be on the cards"

Analysts at Crédit Agricole have meanwhile lowered their general Pound Sterling profile as a result of the slowing in economic momentum.

"We downgrade our GBP outlook given that recent developments have increased the downside risks to the UK economic outlook and could thus lead to a more aggressive easing from the BoE," says Marinov.

Source: Poundsterlinglive

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Risk Warnings and Disclaimers

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Adam

Economic

The positive tone to risk sentiment is continuing on Friday, after a week of record highs for global equities. The S&P 500 recorded another record high on Thursday and is expected to extend gains on Friday, although overall stock market gains have been slim this week. Likewise, while stronger than expected earnings reports have driven indices to record highs, the gains for individual stocks after reporting earnings have been below average. For example, Netflix delivered a better-than-expected earnings report for Q2 and posted a stronger outlook for full-year 2025 revenue, yet its share price is down more than 1% in the pre-market on Friday, usually, the average move in its share price in the 24 hours after an earnings report is more than 8%.

Why the underwhelming price action after earnings beats?

The reason why stocks are inching into fresh record territory is perfectly reasonable: some stocks and indices look overvalued and have had a strong run already in 2025. For example, Netflix has a 12-month forward P/E ratio of more than 40, and the S&P 500’s P/E ratio is above 26 times aggregate earnings, which is the highest level since February, and is approaching the 27.7 level, which was the highest rate since 2022. When valuations get to this level, it is natural that caution sets in, and fears rise about a stock market fall or correction.

High valuations a risk for US equities

Thus, good news for stocks and risk sentiment is tempered by concerns about excessive valuations and whether strong earnings growth in Q2 can be repeated later this year. For example, banks including Goldman Sachs, JP Morgan and Citi all reported stunning trading results for Q2 due to excessive volatility in April, that may not get replicated in Q3. The banking sector has been outperforming the overall S&P 500 so far this year, but warning signs lie ahead. Many people think that Warren Buffet is a good lead indicator for financial markets, and Berkshire Hathaway has been offloading US banks in recent months.

Many people may ask why sell stocks when they are continuing to make gains, which is a valid question. However, Berkshire Hathaway has a long-term investment strategy and so levels may have reached their take profit targets. This does not mean that banks will crash, but they may be near a peak.

As tariff risks recede, stocks reach record highs

Tariffs dominated market sentiment at the start of this week, but as the focus turns to President Trump’s health, tariff risks could recede. The EU and Canada now face the biggest hurdle to agree better terms than the 30% and 35% tariff rates applied to their exports. The August 1st deadline is a risk event for markets, however, with the President toning down his rhetoric, markets are quick to forget tariff risks and concentrate on the positives including a resilient US economy.

The dollar is also falling on Friday, although it is the second-best performing currency in the G10 FX space this week. The dollar has had a decent month, especially vs. the yen and the pound, although it continued to post losses vs. the euro and the Swiss franc, which remains the FX market’s preferred haven, even though the SNB has implemented 0% interest rates.

The pound is at risk from bond yields once again

The pound is at risk of breaking down and is testing the zone around $1.3370, the low from late June. If it breaks this level in the coming days, then we could see steeper losses back to $1.30. The problem for the pound is bond yields, and fears of a fiscal crisis in the UK. UK bonds have been a major underperformer in the developed markets in recent days, and 2-year yields are higher by more than 10 bps this week, 10-year yields are higher by 7bps. There does not seem to be much good economic news around either. In the past week, UK GDP has contracted, unemployment is higher, and inflation rose by more than expected.

Even with this backdrop the FTSE 100 reached a record high, and the FTSE 250 reached its highest level since 2022. Why are UK stock markets recording these highs when the domestic economy is so weak? It is because they are not reliant on the UK, and they contain international companies. Even the FTSE 250 generates more than 50% of its revenue outside of the UK. Thus, the UK’s stock indices could still perform well, even as the UK economy is coming under unbearable pressure.

UK companies driven by global factors: GSK and Burberry

As an example, GlaxoSmithKline is the weakest performer on the FTSE 100 today, due to the FDA, the drug administration in the US, failing to back its blood cancer drug. The reason the FDA gave is that the company refused to test the drug at lower levels to reduce eye toxicity, and this is not a sign that the FDA is showing a preference for US drug firms over international firms.

In contrast, Burberry, the UK luxury goods firm, is the second-best performer on the FTSE 250 after it reported better than expected earnings. Although sales fell in the first quarter of their fiscal year, they eased by less than expected, which is a sign that the company’s new strategic direction could be working. For example, its store sales fell 1% in the three months to June, compared to 6% a year ago. The company also said that it expects a continued improvement in the coming quarters.

Overall, the focus on Friday will be on the University of Michigan consumer confidence data in the US that will be released this afternoon. The market will be looking for consumer confidence data to reinforce the ‘resilient US economy’ narrative that has taken hold of financial markets this week.

Source: xtb

To stay updated on all economic events of today, please check out our Economic calendar

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Glendon

Economic

Forex

The Japanese yen is showing little movement on Friday. In the North American session, USD/JPY is trading at 148.69, up 0.06% on the day. On the data calendar, Japan’s inflation rate eased in June. It’s a light day in the US, highlighted by UoM consumer sentiment and inflation expectations.

Japan’s core CPI eases to 3.3%

The inflation numbers come just before an election for Japan’s Upper House of Parliament on Sunday. The ruling coalition is in danger of losing its majority, and if that happens, it will likely impact yields and the yen next week.

Trade talks between the US and Japan have bogged down and Trump has threatened to hit Japan with 25% tariffs if an agreement isn’t reached by Aug. 1. In this uncertain environment, the BoJ isn’t likely to raise interest rates.