Tensions grew over the weekend between Israel and Hezbollah with several attacks from both sides.
The United Kingdom is on a bank holiday this Monday, which means reduced flows during the European trading session.
In the US economic calendar, the Durable Goods Orders data for July are due to come out at 12:30 GMT:
- Headline Durable Goods Orders are expected to rebound to a 4% increase from the 6.7% plunge seen a month earlier
- Durable Goods without Transportation are expected to be unchanged following the prior month’s 0.4% increase..
- Revisions to the previous month’s data could be more market-moving than the actual number.
Equities trade on the backfoot this Monday as traders engage in profit taking after the steep surge from Friday, which was caused by the dovish message from Fed Chairman Powell.
The CME Fedwatch Tool shows a 61.5% chance of a 25 basis points (bps) interest rate cut by the Fed in September against a 38.5% chance for a 50 bps cut. Another 25 bps cut (if September is a 25 bps cut) is expected in November by 36.3%, while there is a 47.9% chance that rates will be 75 bps (25 bps 50 bps) below the current levels and a 15.8% probability of rates being 100 (25 bps 75 bps) basis points lower.
The US 10-year benchmark rate trades at 3.78%, a fresh three-week low.

Daily digest market movers: Left in the dark