US DATA: Existing Home Sales Pick Up In July, But Activity And Prices Soft

• Recapping the stocks move here - the European morning started weak to reflect the after-hours pull off highs on Wall Street, and that equity weakness is now making itself evident in US cash trade.
• As was the case this morning, tech names are the underperformers. The NASDAQ-100 is off as much as 0.78 vs. The +0.1% return in the Dow Jones as semiconductors are among the hardest hit.
• Much of this stems from the softer-than-expected outlook in the NXP earnings after the bell Monday - which many may see as a signal that chipmakers could have a rougher quarter than expected (NVIDIA relatively late in the quarterly cycle, on August 27th - so we should see plenty more information here). NXP are off 2.5%, feeding directly into Germany's Infineon Tech.
• It's not just the NXP earnings that are undermining sentiment - private firm FuriosaAI (seen as a potential NVDA competitor upon IPO) secured their first formal customer in LG in a pre-market press release.
• This makes for a lower headline S&P 500, despite 360 names in the index higher in early trade. 

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• A partial recovery overnight for USDJPY was swiftly shrugged off and the pair has resumed a steady downtrend since the European open on Tuesday. Price action echoes that seen on Monday in the aftermath of the upper house election in Japan, as PM Iishiba affirmed he would remain in office despite his party losing its majority.
• The extension lower for core yields has assisted this dynamic of yen outperformance, as both the trans-Atlantic tariff tiff and Bessent’s more optimistic tone for Powell’s future provide a supportive tone for treasuries. Furthermore, Bessent’s mention of Japan talks going “very well” and that the election may be the impetus to getting a deal done will have also provided tailwinds for the yen. His comments follow Japan’s chief trade negotiator meeting with the US Commerce Secretary on Monday ahead of the looming August 01 deadline.
• USDJPY has traded through initial support at 146.92 (Jul 16 low), printing session lows of 146.51 at typing. Short-term pivot support to monitor next is 145.85, the 50-day EMA.
• Some analysts had cited the substantial rally in USDJPY as overshooting the shift in fundamentals, and the subsequent cleaner positioning could be exacerbating this week’s swift reversal lower. Below the 50-day EMA, attention will be on 144.23, the July 7 low.