Chris Turner at ING argues EUR/USD should be performing better given solid Eurozone data, lower Oil prices and Japanese US Dollar (USD) selling, but notes possible US activity in EUR/JPY as a short-term drag.

Deutsche Bank strategists highlight a sharp reassessment of the AI (Artificial intelligence) trade with semiconductor and Korean equities suffering steep monthly losses despite strong YTD gains. European stocks outperformed as sector rotation and solid Eurozone growth supported broader indices.

The remarks from Iran's foreign ministry spokesperson Esmail Baghaei, released during the European trading session on Monday, indicates that Tehran is in no discussion with the United States (US) regarding the reopening of the Strait of Hormuz, a critical chokepoint to almost 20% of global energy su

Danske Research Team notes that equity indices have been broadly unchanged over the summer, but sector rotations have been significant. Higher Oil prices supported energy stocks, while within technology, software has outperformed and semiconductors have lagged.

Here is what you need to know on Monday, August 3:

German Retail Sales, a key measure of consumer spending, showed a downside in June. The consumer spending measure fell 1.1% month-on-month (MoM), according to official data released by Destatis, while it was expected to have declined 0.5%. In May, Retail Sales rose by 1.2% (revised from 1.1%)

USD/IDR remains subdued for the fourth successive day, trading around 18,040 during the Asian hours on Monday. The pair experiences notable downside pressure as the Indonesian Rupiah (IDR) strengthens in response to encouraging domestic economic indicators.

Asian shares were mixed at the start of a new week as losses in South Korea's KOSPI and Japan's Nikkei 225 counter improving risk sentiment due to easing Middle East tensions.

AUD/USD depreciates after opening at a bullish gap, remaining in the positive territory and trading around 0.7030 during the Asian hours on Monday.

The NZD/USD pair holds positive ground near 0.5890 during the Asian trading hours on Monday. The New Zealand Dollar (NZD) remains firm despite the downbeat Chinese economic data.

China's RatingDog Manufacturing Purchasing Managers' Index (PMI) eased to 50.9 in July from 51.7 in June the latest data published by RatingDog showed on Monday. The market forecast was for a 51.5 reading.

Atsushi Mimura, Japan’s Vice Finance Minister for International Affairs and top foreign exchange official, said that joint intervention could mark the peak of US-Japan currency partnership, Reuters reported on Monday.

Japan's Finance Minister Satsuki Katayama said on Monday that Japanese authorities conducted coordinated Yen-buying intervention with the United States (US) on Friday, adding that officials will not hesitate to carry out more foreign exchange (FX) intervention with Washington, Bloomberg reported. 

Australia S&P Global Manufacturing PMI registered at 52 above expectations (51.7) in July

Here’s a brief recap of the key developments in the Middle East war that occurred over the weekend, which are expected to have a significant impact on markets in the upcoming week.

United States CFTC Oil NC Net Positions up to 120.1K from previous 81.7K

United Kingdom CFTC GBP NC Net Positions dipped from previous £-55.6K to £-64.8K

Australia CFTC AUD NC Net Positions dipped from previous $-37.7K to $-40K

United States CFTC S&P 500 NC Net Positions declined to $-17.2K from previous $-16.8K

Eurozone CFTC EUR NC Net Positions declined to €-72.4K from previous €-41.3K

United States CFTC Gold NC Net Positions fell from previous $183.9K to $182.1K

Japan CFTC JPY NC Net Positions declined to ¥-163.4K from previous ¥-152.1K

United States CFTC Gold NC Net Positions: $-163.4K vs previous $183.9K

Richmond Federal Reserve (Fed) President Tom Barkin said on Friday that it remains uncertain whether the current level of interest rates is sufficiently restrictive to bring inflation back to the Fed's 2% target, according to an interview with The Wall Street Journal.

TD Securities’ Robert Both and Emma Lawrence note that stronger-than-expected Canadian Gross Domestic Product (GDP) data support a brighter growth outlook but do not materially change their Bank of Canada (BoC) view.

Scotiabank’s FX team notes EUR/USD is drifting toward 1.15 after a Fed‑driven rally, with euro area CPI broadly in line with expectations and French data briefly lifting the Euro. Rate expectations are stabilizing, with about 42 bps of tightening priced by December.

Royal Bank of Canada (RBC) economists Abbey Xu and Nathan Janzen note that Canadian Gross Domestic Product (GDP) rose 0.3% in May, with an advance estimate of 0.2% for June, indicating a solid second-quarter rebound after winter stagnation.

TD Securities economists Eli Nir and Oscar Munoz highlight that Q2 United States (US) Gross Domestic Product (GDP) growth slowed to 1.5% q/q AR, but underlying private domestic final purchases accelerated to 3.9%.

Commerzbank’s Norman Liebke highlights that China’s July trade data will be key for base metals, especially Aluminium. Chinese Aluminium output in H1 exceeded the official cap, suggesting production may ease later this year.

ING economists Deepali Bhargava and Lynn Song expect the Reserve Bank of India to keep the repo rate at 5.25% this week. They note that while June headline inflation rose on higher fuel prices, core inflation remains below target.