01/07/2026 Daily Reports
Dollar in Focus as Fed Chair Kevin Warsh Speaks at ECB Sintra
All eyes on Kevin Warsh
- Warsh speaks today at the ECB Sintra Forum (15:00 CET).
- Markets are watching for his first public comments since the latest FOMC meeting.
Why the USD remains supported
- The Fed’s latest message was firmly focused on price stability.
- Core PCE inflation remains elevated at 3.4% YoY.
- Strong labor market data and resilient consumer confidence continue to reinforce the Fed’s hawkish stance.
Rate hike expectations
- Markets currently price around 45bp of additional Fed tightening by Q2 next year.
- Approximately 22bp is already priced for September, with some traders even discussing the possibility of a July rate hike.
- Any indication that the Fed could tighten sooner would likely provide another boost to the U.S. dollar.
Key U.S. data to watch today
- ADP Employment Report
- ISM Manufacturing PMI
- Stronger-than-expected readings could further strengthen the USD.
Dollar Index
- Holding above the key 101.00 support level.
- A move toward the 101.70–101.80 area remains possible if Warsh maintains a hawkish tone.
EUR/USD
- Eurozone CPI data will also be released today.
- A hawkish Warsh combined with softer Eurozone inflation could push EUR/USD back toward the 1.1325 area.
USD/CAD
- USMCA trade agreement review adds uncertainty for Canada.
- Combined with a dovish Bank of Canada and broad USD strength, USD/CAD could remain above 1.42, with upside risks toward 1.45 if trade negotiations deteriorate.
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Global Market News: Key Developments on July 1, 2026
- The Nasdaq Composite closed at 26,213.72, gaining 1.52% to complete its strongest quarter since 2020. The index advanced over 21% in the second quarter, heavily driven by surging demand for artificial intelligence and semiconductor equities. Major chipmakers, including Nvidia, Advanced Micro Devices, and Intel, recorded substantial gains. The tech-heavy index maintained its upward trajectory as the market temporarily absorbed domestic inflation concerns.
- Germany’s DAX index recorded a strong session, jumping 1.5% to briefly cross the 25,000 milestone before closing near 24,995. The Frankfurt exchange was lifted by a broad rally in the technology and industrial sectors, tracking the momentum from Wall Street. Corporate gainers included Siemens and ASML. European markets also benefited from a sharp decline in global crude oil prices, which provided immediate relief to the region’s energy-intensive industries.
- Japan’s Nikkei 225 index extended its advance for a third consecutive session, rising to close above the 70,000 level. The benchmark was supported by electronics and artificial intelligence stocks, with Tokyo Electron and SoftBank Group posting strong gains. Meanwhile, the Japanese yen fell to a 40-year low, dropping past 162.50 against the US dollar. This severe currency depreciation prompted renewed intervention warnings from Japanese government officials.
- Brent crude oil futures retreated to trade near $73 per barrel, returning to price levels observed prior to the recent Middle East conflict. The significant price drop follows a newly signed memorandum of understanding between the United States and Iran, establishing a 60-day negotiation framework. As diplomatic tensions ease, commercial tanker traffic through the Strait of Hormuz has steadily resumed, erasing the geopolitical risk premium from energy markets.
