Wednesday, July 5th, tensions between China and the US led to a negative shift in risk sentiment. US stock index futures opened in negative territory after the Independence Day holiday, while the US Dollar Index remained stable above 103.00. S&P Global is set to release revised Services and Composite PMI surveys for the UK and the US, and the US economic docket includes the release of May Factory Orders and the minutes of the Federal Reserve’s June policy meeting.Looking ahead to the FOMC minutes, there is anticipation for a more hawkish tone. In recent news, China announced export controls on certain gallium and germanium products used in electric vehicle and semiconductor production, effective from August 1. This move is seen as a warning to the US and its allies, suggesting that China may limit the supply of rare-earth resources to countries aligned with the US-led decoupling efforts. In potential retaliation, the Biden administration is reportedly considering restrictions on Chinese companies’ access to US cloud-computing services, as reported by The Wall Street Journal. Additionally, China’s Caixin Services PMI for June showed a decline to 53.1 from 57.1 in May.In the currency markets, EUR/USD continues to trade within a narrow range below 1.0900, following a negative close on Tuesday. Eurostat will release the Producer Price Index (PPI) data for May. GBP/USD remains stable around 1.2700 after a modest rebound on Tuesday. USD/JPY continues its rangebound movement below 145.00 for the third consecutive day. Gold prices experienced a slight increase towards $1,930 on Tuesday but struggled to gain further bullish momentum. With the 10-year US Treasury bond yield comfortably above 3.8%, XAU/USD fluctuates above $1,920 early on Wednesday. AUD/USD remains weak and trades below 0.6700, while NZD/USD moves sideways near 0.6200.