What is driving the market today?

• Geopolitics and tariffs: Trade tensions have eased slightly after US President Donald Trump suspended the introduction of 50 per cent tariffs on goods from Canada for three days, announcing that an “agreement” had been reached. Meanwhile, oil prices continue to rise amid ongoing tensions and uncertainty regarding the free passage of tankers through the Strait of Hormuz.
• Waiting for the Fed: Following three consecutive sessions of falls for the S&P 500 index, triggered by a global bond sell-off, investors’ attention is now turning to today’s publication of the minutes from the July FOMC meeting.
• UK inflation data: At 08:00, the UK CPI inflation figure for July was released, coming in at 2.9% y/y, which was in line with the consensus forecast. Core inflation, meanwhile, came in at 2.6% y/y, slightly above expectations of 2.5% y/y.

The situation on the markets this morning (as at 09:00):

• Stock market indices: Trading on European and US markets this morning is characterised by caution and low volatility. The German DE40 is up by a symbolic 0.08 per cent, the British UK100 is up by 0.05 per cent, whilst the Polish W20 is down by 0.23 per cent. In the US, futures on the US500 and US100 are edging down slightly, by 0.02 per cent and 0.09 per cent respectively. In Asia, declines were widespread, with the Japanese JP225 losing 0.57% in the wake of global pressure on the technology sector.
• Commodities and currencies: Gold ( GOLD ) is up 0.30% this morning, benefiting from a slight fall in US bond yields. Oil prices are also rising – the OIL.WTI contract is up 0.30%. The US dollar remains weak against the major currency pairs; the EURUSD exchange rate is up 0.22%, and the GBPUSD is up 0.16%.

Highlights of today’s calendar:

• 11:00 – Eurozone, Harmonised Index of Consumer Prices (HICP) year-on-year for July
• Target: In the US pre-market, attention will focus on the financial results of Target, whose shares have risen by over 55 per cent since the start of the year.
• 16:30 – USA, Change in crude oil and petrol stocks
• 20:00 – USA, FOMC meeting minutes