Headlines:

• BOE leaves bank rate unchanged at 3.75% in July meeting, as expected
• USD/JPY stumbles lower in quick drop before slight bounce back
• Why a stock's biggest decline may not be its best buying opportunity
• The bond market is voting against Warsh. Bond yields hit the highest since 2007
• Eurozone Q2 preliminary GDP +0.4% vs +0.2% q/q expected
• German economy holds up in Q2, posts marginal growth on the quarter again
• French economy bounces back in Q2 but overall momentum remains sluggish
• Italy Q2 preliminary GDP +0.2% vs +0.1% q/q expected
• Spanish economy continues to show added resilience in Q2, with growth conditions beating estimates
• Germany inflation seen picking up again in July as state readings accelerate
• Spain inflation estimated to accelerate further in July
• What's the FX signal this month-end?

Markets at a glance:

• WTI crude down 1% to $83.58
• NZD leads, USD lags on the day
• European equities higher; S&P 500 futures up 0.6%
• US 10-year Treasury yields little changed at 4.68%
• Gold up 0.3% to $4,078
• Bitcoin up 2.0% to $64,756

Markets navigated a mixed and more pensive session as participants continued to digest the previous day's FOMC meeting — and more specifically, Fed Chair Warsh's perplexing press conference. The yield curve's persistent steepening reflects investors grappling with the policy path forward, with longer-dated yields reaching levels not seen since before the global financial crisis.

The dollar initially recovered some ground before falling back. USD/JPY saw a sharp and sudden drop from 163.30 to 162.28, then rebounded to settle closer to 163.00. Moves of this magnitude near the 160 level have previously drawn attention to the risk of intervention by Japanese authorities, who have acted in the past to curb excessive yen volatility. However, the dollar continues to trade lower overall, having erased its earlier advance for the day.

That softening persists despite ongoing pressure in the bond market. Ten-year Treasury yields nudged higher early in the session and briefly touched 4.71% before settling back to around 4.68%. This level remains a key area to watch, as a continued selloff would carry broader market implications — potentially once month-end positioning activity subsides. Yields at these levels feed into borrowing costs across mortgages, corporate debt, and emerging markets, making the trajectory a critical input for risk assets globally.

On the economic calendar, the Bank of England's policy decision was the headline event, though the outcome was largely as anticipated. The central bank held the bank rate steady at 3.75%, keeping the door open for future rate hikes while signaling no immediate urgency to act. The decision places the BOE alongside other major central banks in a cautious holding pattern, balancing still-elevated inflation against signs of cooling growth.

Elsewhere, euro area data confirmed greater resilience in Q2 growth conditions. The stronger-than-expected GDP prints across the bloc's largest economies — Germany, France, Italy, and Spain — suggest the region has so far avoided recession despite the energy shock and tighter monetary conditions. However, July inflation figures are beginning to add pressure on the European Central Bank to consider another policy move as soon as September, with German and Spanish state readings both pointing to reacceleration.

In commodity markets, oil prices edged slightly lower, with WTI crude down 1% to $83.58. Traders appeared unfazed as the US-Iran conflict continued without disruption to supply, though the geopolitical premium embedded in prices remains a variable should conditions on the ground shift.

Equities showed signs of recovery late in the month. European indices pushed higher, with the DAX up 0.2% and the CAC 40 up 1.0% on the day. In the US, futures pointed to gains led by tech shares, with Microsoft surging nearly 10% in pre-market trading after the company helped ease concerns about AI capital expenditure spending — a question that has weighed on the megacap tech cohort as investors scrutinize whether heavy AI investment will translate into durable returns.

In precious metals, gold rose 0.3% to $4,078, while silver gained 0.7% to $58.07.