US-EU: Commission Spox-No Countermeasures Pre Aug 1, Prepared For All Scenarios

Both Israel and Iran are accusing one another of breaches of the fragile ceasefire between the two countries. Amichai Stein at Israel's i24 reports an Israeli official saying, regarding any potential response against supposed Iranian breaches, "The Americans are with us—they know Iran has violated the ceasefire". Iran has claimed that Israel carried out three waves of strikes on Iran up until 09:00 local time, after the ceasefire came into effect. 

• Speaking to his Emirati counterpart, Iranian Foreign Minister Abbas Araghchi claims that "Tehran is committed to good-neighbourliness and strengthening relations with all neighbours...Illegal attacks of US and Israel pose an unprecedented threat to regional peace and stability.'
• Qatari PM Sheikh Mohammed bin Abdulrahman Al Thani says that Iranian President Masoud Pezeshkian has called to express Tehran's regret at targeting a military base in Qatar. Al Thani says 'We hope the situation in the Middle East gets contained as soon as possible.' Says that Iranian attacks on Qatar 'will scar relations with Iran', but he 'hopes neighbourly relations will not be damaged'. PM: 'We hope we don't see any hostility in the Gulf neighbourhood in the future...We hope Iran will continue to partner with Qatar and all Gulf countries.'

Separately, there appears to be pressure on Israel to use the ceasefire to continue indirect talks with Hamas over a ceasefire in Gaza. PM: 'In the next to days there will be indrect talks between Hamas and Israel to reach a ceasefire...We hope that Israel does not take advantage of the ceasefire to keep attacking Gaza.' 

• In FX, the trend set-up in EURUSD remains bullish, reinforced by Monday’s gains. The recovery highlights the fact that the latest correction has been a shallow one and that support at the 20-day EMA - at 1.1457 - remains intact. Moving average studies continue to highlight a dominant uptrend and a breach of 1.1631, the Jun 12 high, would confirm a resumption of the trend. This would open 1.1685, 76.4% retracement of the Jan ‘21 - Sep ‘22 downleg.
• The trend needle in GBPUSD continues to point north. Support at the 50-day EMA, at 1.3367, remains intact. A clear breach of this average would signal scope for a deeper retracement. Moving average studies are in a bull-mode position too highlighting a dominant medium-term uptrend. The pair is approaching key resistance and the bull trigger at 1.3632, the Jun 13 high. Clearance of this hurdle would resume the primary uptrend.
• USDJPY has reversed lower from Monday’s high. This undermines a recent bullish theme and yesterday’s price pattern appears to be a shooting star candle formation. If correct, it signals a reversal of the recent bull cycle. Support to watch lies at 144.80, the 20-day EMA. A clear break of this level would strengthen a bearish threat and open 144.34, the Jun 18 low. On the upside, a move above Monday’s high of 148.03 would reinstate a bullish theme.

• Today sees a heavy Fedspeak schedule headlined by Fed Chair Powell’s House appearance, with text likely to be released at 0830ET judging by historical precedent before the appearance at 1000ET.
• Coming so soon after Wednesday’s FOMC press conference, we’d expect a repeat of him being far from emphatic about the prospect of rate cuts, all but taking a cut at the July meeting off the table.
• From the July presser: “As long as the economy is solid, as long as we're seeing the kind of labor market that we have and reasonably decent growth, and inflation moving down, we feel like the right thing to do is to be where we are, where our policy stance is, and learn more. And in particular we feel like we're going to learn a great deal more over the summer on tariffs."
• With repeated attacks from President Trump including calls for rates to be materially lower, expect a partisan approach to questions. Trump on Truth Social overnight: “I hope Congress really works this very dumb, hardheaded person, over. We will be paying for his incompetence for many years to come. THE BOARD SHOULD ACTIVATE.”
• Broader Fedspeak will also be important considering the dot plot revealed a particularly divided FOMC with seven pencilling in zero cuts this year through to two looking for three cuts.
• VC for Supervision Bowman (voter) surprised yesterday with an abrupt chance in stance, eyeing a July cut if “inflation pressures remain contained”. That echoed a dovish Waller on Friday kickstarting post-FOMC Fedspeak.
• A July cut isn't universally expected on the FOMC: Bostic (non-voter) told Reuters there is no rush to cut rates and that he still sees a single rate cut last this year; Barkin (non-voter) sees no rush to cut rates, whilst Daly (non-voter) thinks the Fed but can’t wait so long before fundamentals necessitate cuts but is looking more to the fall.
• Today sees more speakers with voting roles for 2025 - Hammack, Williams, Collins and Schmid are all likely to have monetary policy relevant content:
  • 0830ET/1000ET – Powell Semiannual Policy Testimony
  • 0915ET – Cleveland Fed’s Hammack (’26) on monetary policy (text + Q&A)
  • 1230ET – NY Fed’s Williams (voter) keynote remarks (text + Q&A)
  • 1345ET – Minneapolis Fed’s Kashkari (’26) in town hall (Q&A only)
  • 1400ET – Boston Fed’s Collins (’25) on housing (text only)
  • 1600ET – Gov. Barr (voter) welcoming remarks
  • 2015ET – KC Fed’s Schmid (’25) speaks on economic outlook (text + Q&A)