Early Morning Reid Macro Strategy

Economics Date 27 July 2026 Early Morning Reid

Macro Strategy Jim Reid Key Market Data Global Head of Macro and Thematic (Index @ Close // Change) Research (S&P 500 @ 7412 // +0.05%) (STOXX Europe 600 @ 645 // +0.82%) Henry Allen (iTraxx Crossover @ 265 // -2) Macro Strategist (Brent Oil^ @ 92.22 // -8.48%) yr Treasury^ @ 4.63 // -7 bp) (10yr Bund @ 3.17 // -3 bp) Peter Sidorov, CFA Senior Economist (Dollar Index^ @ 101.22 // -0.21%) (Further Fed hikes/cuts priced for 2026 @ 44 // 0 bp) (Further ECB hikes/cuts priced for 2026 @ 44 // -3 bp) Asim Kaul ^ - Change from previous day's 4:30 GMT to 04:30 GMT Research Associate

In 49 weeks the 2027 Extel survey opens, and we’d really appreciate…. ….ok, ok, too soon. Readers from Friday will be pleased to know that I’ve survived the first 3 days out of 5 without my family with no obvious signs that I’m incapable of looking after myself, contrary to my wife’s beliefs. The golf course does great breakfast, lunch and dinner!

Thankfully, in light of my weekend golf-a-thon, the escalating conflict in Iran has paused somewhat. After 13 consecutive nights of US strikes aimed at degrading Iran’s ability to threaten commercial shipping, Washington has refrained from further attacks since late Friday, while Tehran has publicly stated that it has also suspended retaliatory operations. The pause falls short of a formal ceasefire, but both sides are presenting it as an opportunity for diplomacy, with Omani- mediated talks continuing over the weekend focused on navigation through the Strait of Hormuz. US officials, including UN Ambassador Mike Waltz, have stressed that all military options remain on the table and that President Trump is simply giving negotiations more space. However, reports from the New York Times and Axios suggest an active debate within the administration over both the effectiveness and costs of further strikes, with some military officials reportedly arguing that key objectives have largely been achieved. For now, the market is treating the lull as a positive development, although the situation remains highly fluid.

The main market risk remains the energy and shipping front. Traffic through Hormuz remains severely disrupted, while the conflict has broadened into the Red Sea, where Iran-backed Houthi forces reportedly launched missile and drone attacks against Saudi energy infrastructure around Jizan and Yanbu over the weekend, prompting retaliatory Saudi strikes. This raises the prospect of simultaneous disruption to both Gulf and Red Sea export routes. So a welcome pause from the main actors but a fragile one, especially with side battles still ongoing.

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27 July 2026 Early Morning Reid

However there is no doubt the weekend news is positive and this morning Brent crude prices are around -4.5% lower to $92.42 and 10yr USTs are down -4.5bps. S&P 500 futures are up +0.71% with Nasdaq futures gaining +1.17%.

Also on the positive side, the S&P/ASX 200 (+1.14%) is leading regional gains, while the Hang Seng (+0.81%), CSI 300 (+0.25%), and Shanghai Composite (+0.40%) are all higher. However the KOSPI (-0.28%) and Nikkei (-0.14%) are lagging with their tech stocks on the weaker side.

Looking forward, and as more and more of the financial world steps off the ever- turning carousel of market news and disappears towards sunnier shores, a busy global week lies ahead, with central bank decisions, major economic releases and a heavy slate of corporate earnings all competing for investors’ attention. The Federal Reserve meeting concluding on Wednesday remains the standout event, but investors will also hear from the Bank of England (Thursday) and the Bank of Japan (Friday). Meanwhile, key economic releases include US Q2 GDP and June core PCE inflation (both Thursday), Euro Area Q2 GDP and July inflation data (Thursday/Friday), Japan’s Tokyo CPI (Friday) and China’s official PMIs (Friday). Adding to the significance of the week, four of the world’s most influential…