The market volatility persists, inflation is still high, rates keep rising and recession fears continue. Hawkish comments from several Fed presidents are countering a recent narrative taking hold of financial markets, in which policymakers would ease up on a recent tightening cycle given expectations of an economic slowdown. Stocks dipped on the remarks on Tuesday, while investors sent the 10-year Treasury yield up 15 basis points to the 2.75% level. The new spate of aggressiveness also saw the safe-haven dollar renew its surge, though there was still plenty of optimism that the U.S. could achieve a soft landing and avoid a formal recession. Thus, St. Louis' James Bullard said, that he thinks inflation has come in hotter than what I would have expected during the second quarter, and, hence, [FOMC] is going to have to go a little higher than what was said before."

Meanwhile, according to the Federal Reserve Bank of New York, U.S. households took on more debt in the second quarter, pushing total household debt up by $312 billion to $16.2 trillion. That puts balances $2 trillion higher than they were before the pandemic at the end of 2019.

High-tech companies seem to have simultaneously decided to start cutting their non-essential staff, eyeing the current economic and geopolitical backdrop. Now more crypto firms are joining the trend. Thus, Robinhood (HOOD) is erasing almost a quarter of its workforce and closing offices after a stormy first year of it in the status of a public company. The move follows earlier layoffs in April, when Robinhood cut about 9% of its staff. Separately, MicroStrategy (MSTR) co-founder Michael Saylor resigned from his CEO position and said he’ll focus more on Bitcoin (BTCUSD) after the company reported a loss of more than $1 billion related to the Q2 plunge in the price of the cryptocurrency. Additionally, hackers reportedly targeted the Solana (SOLUSD) ecosystem earlier today with thousands of wallets being challenged.

European markets are trading slightly higher today. As of 1:40 p.m., the Pan European Stoxx Europe 600 Index rose 0.21%, the British FTSE 100 rose a minuscule 0.03%, while the French CAC 40 Index edged higher by 0.36%, and the German DAX gained 0.25%. On the macro front, producer prices in the Eurozone increased 1.1% MoM in June despite peak dairy, fruit and vegetable season, while services PMI was revised higher to 51.2 in July from a preliminary reading of 50.6. The UK’s Composite PMI fell to 52.1 in July from 53.7 in June, while the S&P Global French Composite PMI slipped to 51.7 in July from 52.5 a month ago, but German Composite PMI rose slightly to 48.1 in July from a preliminary reading of 48. Germany also reported a trade surplus of €7.7 billion in June, after plunging to a trade gap in May.

Meanwhile, Eurostat revealed in its report that retail trade in the euro area declined 1.2% in June MoM while falling 1.3% in the EU as well. On an annual basis, the number plunged 3.7% in the Eurozone and 2.8% in the EU. Both the monthly and annual figures were well below market expectations for the euro area. Non-food products retail trade in both the euro area and the EU dropped 2.6% in June despite accelerating retail prices due to inflation, on a monthly basis. In addition, food, drinks and tobacco retail trade fell in both the euro area and the EU by 0.4% and 0.2% respectively.

Asian markets traded mixed today. Thus, Japan’s Nikkei 225 rose 0.53%, Hong Kong’s Hang Seng Index gained 0.40%, and India’s S&P BSE Sensex advanced by 0.3%. However, China’s Shanghai Composite fell 0.71% and Australia’s S&P/ASX 200 eased by 0.3%. The S&P Global India Composite PMI dropped to a three-month low level of 56.6 in July from 58.2 a month ago. Retail sales in Australia climbed by 0.2% MoM to a fresh record level of AUD 34.24 billion during June, while the country’s Composite PMI declined to 51.1 in July from a final level of 52.6 in June. The Bank of Japan’s Composite PMI was revised lower to 50.2 in July from a flash reading of 50.6, while S&P Global Hong Kong PMI fell to a 3-month low of 52.3 in July.

U.S. House of Representatives Speaker Nancy Pelosi pledged that the U.S. wouldn’t abandon Taiwan, reaffirming American support for the government in Taipei. In response, a spokeswoman at China's foreign ministry said, “The U.S. will certainly shoulder the responsibility and pay the price for undermining China's sovereignty and security interest”. Beijing has moved to ban imports of various goods from Taiwan, from fish and fruit to baby food and cookies. According to Chinese customs data, China's imports from Taiwan reached $122.5 billion in 1H 2022, up 7.3% on an annual basis. Exports of natural sand to Taiwan – that is widely used for construction and in concrete – were also banned, while China vowed to take disciplinary actions against Taiwanese foundations that engage in pro-independence or separatist activities.