Top Trade Ideas - July 24th

10 ideas to watch this week across equity, FX and commodity markets.

Last week saw the S&P 500 index close modestly higher, with it giving back most of the gains during the back end of the week.

One sector that led the early gains was banks/financial services. The below graphic highlights the gains. This doesn’t surprise us too much, given the strong quarterly earning reports out from the likes of J.P Morgan and Citi.

Up ahead this week we get the US Fed meeting on Wednesday. With the markets pricing in almost a 100% chance of a 25bps hike, there will be little surprise is this is realised. Yet the volatility will be weighted towards how hawkish Powell tries to be. Last month, the market disregarded his chatter, so we’ll be keen to see whether he steps up his language or turns slightly more moderated (especially given the recent data prints).

In FX, GBP saw heightened trading volumes after inflation came in at 7.9%, below expectations of 8.2%. However, we see this spike as a good way to re-enter GBP shorts, explained in more detail below.

Let’s get onto the ideas for the week…

Equities