Headlines:

• All eyes turn to the Fed’s preferred measure of inflation next
• USD/JPY volatility stays in focus after the bounce yesterday
• US futures continue to pull higher on the day
• France July consumer confidence 91 vs 90 expected
• Eurozone consumers see inflation at 2.8% in the next 12 months – ECB survey
• Trump wants a weaker dollar but will he get his wish?

Markets:

• AUD leads, JPY lags on the day
• European equities higher; S&P 500 futures up 0.7%
• US 10-year yields down 1.9 bps to 4.236%
• Gold up 0.4% to $2,373.24
• WTI crude down 0.3% to $76.85
• Bitcoin up 3.0% to $67,231

Markets are taking a bit of a breather today, following the volatile risk selloff in the last few days.

Equities are faring better with S&P 500 futures seen up 0.7% as tech shares are finding some respite. European indices are also holding higher, with the French CAC 40 index seen up 0.9% though still largely down on the week.

In FX, USD/JPY is also keeping with the overnight bounce in a push to 154.70 from around 153.80 earlier in the session. The 100-hour moving average for the pair is seen at 154.83 and will be a key near-term level to watch before the weekend.

As we see traders sense some relief, AUD/USD is also seen higher by 0.3% to 0.6560 while USD/CHF is also up 0.2% to 0.8835 on the day. The latter fell to its lowest since March yesterday but staved off a firm break below 0.8800 at least.

In other markets, gold is also up 0.4% to $2,373 while Bitcoin is up roughly 3% to $67,231 currently.

It’s all pointing to just a bit of respite as all eyes turn to the US PCE report next. That will be the make or break for overall sentiment before we close out the week.

This article was written by Justin Low at www.forexlive.com.

Broader markets are seeking a respite today and if that is to hold, it will need the next key US inflation indicator to play ball. So far, risk trades are sensing some relief today after a rough week. But can it hold through until the weekend?

The expectation for the US PCE price index is for the monthly reading to come in at +0.1% for both the headline and core estimates. Meanwhile, the annual reading is expected to be at +2.5% for both the headline and core estimates as well. However, Goldman Sachs argues that we could see the core reading be at +0.2% m/m and +2.6% y/y with the latter unchanged from May.

The narrative at the moment is that the disinflation process in the US is continuing to take hold. However, it is moving at a rather gradual pace. And given the circumstances, there might be bumps in the road as per what policymakers are expecting as well.

So, even with a 2.6% reading in the core annual estimate today, it’s not a major setback to the Fed.

But with markets pretty much sitting on edge this week, any readings above that could easily spook investors. And all of the early gains we’re seeing in stocks and risk could be in jeopardy before the weekend comes along.

This article was written by Justin Low at www.forexlive.com.

That is leading to a much better mood in broader markets so far today. USD/JPY is also now trading up by 0.2% to 154.25 with the dollar keeping marginally lower elsewhere. While still in narrow ranges, EUR/USD and GBP/USD are both up 0.1% to 1.0851 and 1.2865 respectively.

Besides that, gold is also seen higher by 0.4% to $2,374 after having fallen by 1.4% in trading yesterday.

In Europe, stocks are also nudging higher now with the DAX up 0.2% and the CAC 40 up 0.9% on the day.

It’s all pointing to a slight reprieve after the continued selloff in risk over the last few days. But there’s still one final hurdle to get through in the US PCE price index later.

This article was written by Justin Low at www.forexlive.com.

Life
insurance is often viewed purely as a means of financial protection for loved
ones. However, it also presents unique opportunities for traders looking to
unlock additional capital. In the UK, using life insurance as a financial tool
can provide traders with a flexible and secure way to boost their trading
funds. This article delves into the mechanics of leveraging life insurance
policies for trading capital, offering strategies, benefits, and considerations
specific to the UK market.

Understanding Life Insurance

Types of Life Insurance Policies

In the
UK, there are several types of life insurance policies, each with unique
features and benefits:

• Term Life Insurance: Provides coverage for a specified term. If the policyholder dies
  during this period, the beneficiaries receive a payout. There is no cash
  value component.
• Whole Life Insurance: Offers lifetime coverage and includes a savings component that
  builds cash value over time.
• Universal Life Insurance: Similar to whole life but with more flexibility in premium
  payments and death benefits. It also accumulates cash value.

Key Features and Benefits

Each
type of life insurance has distinct advantages:

• Term Life Insurance: Lower premiums, straightforward coverage.
• Whole Life Insurance: Guaranteed death benefit, cash value accumulation, potential
  dividends.
• Universal Life Insurance: Flexibility in adjusting premiums and death benefits, cash value
  growth tied to market performance.

Leveraging Life Insurance for Capital

Explanation of Borrowing Against Life
Insurance

In the
UK, policyholders with whole or universal life insurance can borrow against the
cash value of their policies. This process involves taking a loan from the
insurance provider, using the policy’s cash value as collateral. The loan
amount can typically be up to 90% of the cash value.

How the Cash Value Can Be Accessed

The cash
value in a life insurance policy grows tax-deferred. Policyholders can access
these funds through policy loans or withdrawals. Loans are often preferred
because they do not trigger a taxable event as long as the policy remains
active.

Advantages of Using Life Insurance as
Collateral for Loans

• No Credit Checks: Borrowing against life insurance does not require a credit check.
• Low-Interest Rates: Policy loans often have lower interest rates compared to other
  forms of borrowing.
• Flexible Repayment: Repayment schedules can be flexible, and interest can be added to
  the loan balance rather than requiring immediate payments.

Strategies for Traders

Short-Term Trading Strategies

Using
life insurance loans for short-term trades can provide quick capital without
the need for extensive credit applications. Traders can seize market
opportunities promptly, leveraging the borrowed funds for potential quick
gains.

Long-Term Investment Strategies

For
long-term investments, the steady growth of the cash value in a life insurance
policy can provide a reliable source of capital. Traders can use these funds to
invest in diversified portfolios, balancing risk and reward.

Risk Management and Diversification

Life
insurance capital can be part of a broader risk management strategy. By
diversifying the sources of their trading capital, traders can mitigate risks
associated with market volatility.

Tax Implications and Considerations

Tax Benefits

In the
UK, the growth of the cash value in life insurance policies is tax-deferred.
Policy loans do not create a taxable event, making them a tax-efficient way to
access funds.

Potential Tax Liabilities

If the
policy lapses or is surrendered, any outstanding loan amounts may be considered
taxable income. It’s crucial to manage the policy carefully to avoid unintended
tax consequences.

Regulatory Considerations and
Compliance

Traders
must comply with UK regulations regarding life insurance policies and financial
transactions. Consulting with a financial advisor can ensure adherence to these
regulations.

Risks and Challenges

Potential Downsides

Borrowing
against life insurance is not without risks. The loan balance accrues interest,
and excessive borrowing can deplete the policy’s cash value, risking policy
lapse.

Risk of Policy Lapse

If the
policy lapses due to unpaid loans or insufficient cash value, the policyholder
could face significant financial and tax consequences.

Strategies to Mitigate Risks

To
mitigate risks, traders should:

• Regularly monitor the policy’s cash value.
• Make timely interest payments.
• Avoid borrowing more than necessary.

Expert Opinions and Insights

Interviews with Financial Advisors and
Insurance Experts

Financial
advisors in the UK emphasize the importance of understanding the terms and
conditions of life insurance loans. They recommend consulting with
professionals to ensure informed decisions.

Insights from Successful Traders

Traders
who have successfully used life insurance loans often highlight the benefits of
careful planning and risk management. Their insights can guide others
considering this strategy.

Professional Advice on Best Practices
and Common Pitfalls

Experts
advise:

• Maintaining a conservative borrowing approach.
• Regularly reviewing policy statements.
• Seeking professional guidance for complex financial decisions.

Conclusion

Using
life insurance as capital provides UK traders with a unique and flexible
funding source. By understanding the mechanics, benefits, and risks, traders
can strategically leverage their life insurance policies to enhance their
trading activities. With careful planning and professional advice, life
insurance can be a powerful tool in a trader’s financial arsenal. It’s also
important to consider your age when evaluating your life insurance needs.

For
those looking into life insurance over 60, the approach may
differ slightly. While premiums are generally higher for older individuals,
it’s still possible to find affordable options by carefully assessing your
coverage needs and shopping around for the best deals.

Additional Resources

• Contact information for financial
  advisors specializing in this area.
• Tools and calculators for assessing the value of
  life insurance policies.

This article was written by FL Contributors at www.forexlive.com.

Based on the earnings results of companies reporting on 25 July (AMC), here’s a summary focusing on the moves made by these companies and their possible impact on the overall market indices such as SPX and NDX. The list is ordered by market cap to highlight the biggest movers and provide an average weighted move. Emphasis is placed on the most popular companies and brands likely to influence market sentiment. Companies with moves less than 2 percent are disregarded unless they are popular brands or stocks.

Highlights of most popular companies

• Norfolk Southern (NSC)
  • Move: +6.8%
  • Market Cap: $50.4B
  • Impact: Norfolk Southern’s substantial positive move adds to the bullish outlook. 😃

Other notable movers

• Baker Hughes Company (BKR)

  • Move: -36.8%
  • Market Cap: $42.9B
  • Impact: Baker Hughes‘ significant negative move suggests strong bearish sentiment. 😟

• Deckers Outdoor (DECK)

  • Move: +10.5%
  • Market Cap: $21.4B
  • Impact: A significant positive move from Deckers Outdoor indicates a bullish sentiment. 😊

• Hartford Financial Services Group (HIG)

  • Move: +1.9%
  • Market Cap: $35.5B
  • Impact: A positive move from Hartford Financial is a bullish indicator, though below 2%, it’s included due to its popularity. 😊

Overall market cap weighted trend

1. Positive influence:

   • Norfolk Southern (+6.8%): With a market cap of $50.4B, Norfolk Southern’s positive move will have a considerable bullish influence.
   • Deckers Outdoor (+10.5%): A substantial move from Deckers Outdoor, with its $21.4B market cap, significantly boosts bullish sentiment.

2. Negative influence:

   • Baker Hughes (-36.8%): The sharp decline from Baker Hughes, with its $42.9B market cap, is a significant bearish influence.

3. Overall sentiment:

   • The combined effect of these movements, weighted by their market caps, suggests a mixed outlook with a slight bullish bias. The substantial positive impacts from Norfolk Southern and Deckers Outdoor are likely to outweigh the negative impact from Baker Hughes.

Expected directional bias for 26 July

• Slightly bullish to mixed/failry tight trading range day: Given the positive impact from high market cap companies like Norfolk Southern and Deckers Outdoor, the overall market indices (SPX and NDX) are expected to trend slightly bullish on 26 July. The influence of these household names is likely to sway retail investor sentiment towards a more optimistic outlook. 📈

Investors and traders should prepare for a potentially mixed market with a slight bullish bias, adjusting their strategies accordingly based on the performance of these influential companies and the overall market sentiment derived from these earnings reports.

This article was written by Itai Levitan at www.forexlive.com.