Daily Market Outlook, August 7, 2025
Patrick Munnelly, Partner: Market Strategy, Tickmill Group
Munnelly’s Macro Minute…
Asian markets surged alongside US equity-index futures after President Donald Trump threatened to impose 100% tariffs on chip exporters but indicated that companies such as Apple, which invest in the US, would be exempt. The MSCI Asian stock index rose by 0.8%, achieving its largest increase in two weeks, while contracts for the S&P 500 and Nasdaq 100 saw a 0.3% rise. European contracts also showed gains. Technology stocks in Asia experienced a rally, driven by Taiwan Semiconductor Manufacturing and Samsung. Oil prices increased after a five-day decline, the longest losing streak since May, as investors monitored the US's efforts to penalise Russian crude buyers and Trump's diplomatic initiatives to resolve the Ukraine conflict. Bond yields fell, with the 10-year Treasury yield climbing two basis points to 4.25%, while the dollar stabilised after four consecutive days of decline. Investor sentiment improved following Trump's announcement that companies manufacturing products in the US could receive exemptions from the impending tariffs, alleviating concerns about supply chain disruptions. Hopes for a potential interest-rate cut by the Federal Reserve are boosting optimism in the stock market as Trump’s extensive new tariffs aimed at altering global trade took effect on Thursday. Trump stated late Wednesday that the US would impose "a tariff of approximately 100% on chips and semiconductors," but noted, "if you’re building in the United States of America, there’s no charge." This announcement coincided with Apple CEO Tim Cook revealing a $100 billion investment plan in the US during a joint event with Trump in the Oval Office.
The primary risk to the market from today’s Bank of England (BoE) announcements lies in the concentrated expectations around a narrow range of outcomes. A widely anticipated scenario involves a 25bp reduction in the Bank Rate to 4%, accompanied by a 2-5-2 vote split (two members favoring a 50bp cut, two advocating no change), and policy guidance emphasizing a ‘gradual and careful’ approach to future reductions. Given these expectations, even a minor surprise, especially in potentially thinner summer markets—could trigger notable ripples. Markets continue to anticipate further easing beyond today’s decision, bolstered by yesterday’s NIESR headlines highlighting tighter fiscal policy, which strengthens the argument for a more accommodative monetary stance. However, today's communications encompassing the MPC minutes, MPR projections, and Andrew Bailey’s press conference may carry a slightly hawkish tone. While some of the employment data that initially justified pricing in an August rate cut has been revised upward, inflation remains elevated, adding complexity to the outlook.
Overnight Headlines
Trump Plans To Meet Putin To Discuss Ending Ukraine War
Trump Vows 100% Tariff On Chips, Exemptions If Built In US
Trump: Will Likely Name Temporary Fed Governor To Open Seat
Apple To Invest $600B In US Manufacturing Amid Tariff Pressure
Bank Of England To Cut Rates To Two-Year Low
Three Fed Officials Voice Concerns Over US Labour Market
China Trade Surplus Shrinks As Imports, Exports Beat Forecast
Amazon’s Zoox Robotaxi Unit Clears Regulatory Hurdle
TSMC Hits Record After Taiwan Says It’s Exempt From Trump Tariffs
AIG Profit Beats Estimates As Catastrophe Losses Tumble
Airbnb Results Beat, But Margin Outlook Dims
DBS Profit Tops Estimates On Fee, Trading Gains
Sony Lifts Outlook On Entertainment Demand Despite Tariff Threat
Manulife Buys Comvest To Build $18.4B Private Credit Unit
Trump Meets With Nvidia’s Huang As Semiconductor Tariffs Near
FX Options Expiries For 10am New York Cut
(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)
EUR/USD: 1.1600 (1.8BLN), 1.1640-50 (640M), 1.1670-75 (766M)
1.1715 (320M), 1.1725-40 (924M), 1.1745-50 (3BLN)
USD/CHF: 0.8000-05 (428M), 0.8120 (230M)
EUR/GBP: 0.8650 (481M)
GBP/USD: 1.3335 (395M), 1.3350 (295M), 1.3360-70 (470M)
AUD/USD: 0.6495-0.6505 (1.9BLN), 0.6520 (601M), 0.6535 (390M)
NZD/USD: 0.5970 (496M)
USD/CAD: 1.3720 (430M), 1.3750 (423M), 1.3800 (1.3BLN)
USD/JPY: 146.50 (717M), 147.00-10 (1.4BLN), 147.30-40 (1.1BLN)
147.65 (1.5BLN), 147.80 (425M), 148.00-15 (3BLN)
EUR/JPY: 170.00 (770M), 170.35 (275M). AUD/JPY: 95.45-50 (480M)
CFTC Positions as of the Week Ending August 1
The net short position for Bitcoin is -1,008 contracts. The Swiss franc has a net short position of -24,034 contracts. The British pound's net short position stands at -12,028 contracts. In contrast, the euro holds a net long position of 123,359 contracts, while the Japanese yen has a net long position of 89,243 contracts.
Equity fund speculators increased their S&P 500 CME net short position by 32,269 contracts, bringing the total to 363,032. Meanwhile, equity fund managers raised their S&P 500 CME net long position by 18,743 contracts to a total of 869,641. Speculators raised the net short position for CBOT US 5-year Treasury futures by 41,959 contracts, resulting in 2,511,883 contracts. Additionally, they increased the net short position for CBOT US 10-year Treasury futures by 147,096 contracts, totaling 896,630. On the other hand, speculators reduced their net short position for CBOT US 2-year Treasury futures by 45,415 contracts to 1,203,237 contracts and trimmed the net short position for CBOT US UltraBond Treasury futures by 15,530 contracts, resulting in 216,813 contracts..
Technical & Trade Views
SP500
Daily VWAP Bullish Above 6330 Target 6400
Weekly VWAP Bearish Above 6300 Target 6150
EURUSD
Daily VWAP Bullish Above 1.15 Target 1.1640
Weekly VWAP Bearish Below 1.1640 Target 1.14
GBPUSD
Daily VWAP Bullish above 1.3260 Target 1.34
Weekly VWAP Bearish Below 1.3360 Target 1.3050
USDJPY
Daily VWAP Bearish Below 1.4880 Target 1.45
Weekly VWAP Bearish Below 1.4770 Target 1.45
XAUUSD
Daily VWAP Bullish Above 3320 Target 3500
Weekly VWAP Bullish Above 3350 Target 3600
BTCUSD
Daily VWAP Bullish Above 114k Target 118k
Weekly VWAP Bearish Below 118k Target 110k
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!