5 things to start your day

[Bloomberg]( Day two of Powell, things are heating up in the Persian Gulf, and ECB minutes due. Over easy Fed Chairman Jerome Powell is in the Senate today for his second day of congressional testimony, scheduled to begin at 10:00 a.m. Eastern Time. His prepared statement given to the House yesterday was seen by markets as [all but confirming a rate cut]( at the July 30-31 monetary policy meeting. He was viewed as so dovish that the conversation has moved on from whether there will be a cut to how much the Fed will cut, with some looking to a [50 basis point reduction](. The move would be a boon for [emerging market central banks]( who could ease policy without risking capital flight. Heightening tensions The U.K. Navy was [forced to intervene]( to stop Iranian vessels from blocking a BP Plc-operated oil tanker from leaving the Persian Gulf, according to a British government statement. Iran [denied it tried to impede the vessel](, even after its military vowed retaliation after the U.K. seized an oil tanker loaded with Iranian crude off the coast of Gibraltar last week. Needless to say, this is making oil investors more nervous, with crude rising to a [seven-week high]( as the standoff adds to worry over output halts in the Gulf of Mexico due to [Storm Barry](. Sponsored Content by [Masterworks]( FYI: the hottest new invite only club doesn’t require you to leave your home. Masterworks is an exclusive platform for investing in blue-chip art, an asset class that’s outperformed the S&P by over 180% since 2000. The best part? Readers of 5 Things can bypass the waitlist (10,000+) by clicking [here](.  ECB, BOE The Bank of England’s financial stability [report]( this morning warned that the likelihood of a no-deal Brexit has risen, and it could cause material economic disruption to the U.K. In the euro-area, there was some good news for the European Central Bank ahead of the publication of the account of its latest monetary policy meeting at 6:30 a.m. when German inflation for June was [revised higher to 1.5%](. The bank’s next policy announcement is on July 25, just days before the Fed is expected to cut. Markets higher Overnight the MSCI Asia Pacific Index climbed 0.8% while Japan’s Topix index closed 0.5% higher as investors in the region reacted to Powell’s dovishness. It’s a similar story in Europe where the Stoxx 600 Index had gained 0.3% by 5:50 a.m. in a broad-based advance. S&P 500 futures pointed to an [open above 3,000](, the 10-year Treasury yield was at 2.053% and gold added to yesterday’s gains. Coming up… Very full calendar today with U.S. inflation for June expected to show a slowdown when the data is published at 8:30 a.m. Weekly jobless claims are due at the same time. The WASDE report is published at 12:00 p.m. and the U.S. June budget statement is at 2:00 p.m. Jerome Powell is far from the only Fed speaker we have today with Federal Reserve Bank of New York President John Williams, Federal Reserve Bank of Atlanta President Raphael Bostic, Federal Reserve Bank of Richmond President Thomas Barkin, Federal Reserve Vice Chairman for Supervision Randal Quarles and Minneapolis Fed President Neel Kashkari all sharing their opinions at various events. What we've been reading This is what's caught our eye over the last 24 hours. - Deutsche Bank faces U.S. Justice Department [probe over 1MDB](. - Ocasio-Cortez and Trump adviser unite to [trash the Phillips Curve](. - Walmart’s supplier says factories in China in “[desperate](” state. - Hedge funds post [best first half]( since 2009. - [Gold gets a boost]( from Powell. - Now [fruit juice]( is linked to a higher cancer risk. - Here’s why Earth has [way more gold than the moon](. And finally, here’s what Tracy's interested in this morning Where would you guess the fastest-growing market for exchange-traded funds actually is? Award yourself a gold star if you guessed Taiwan. The country's ETF market has grown 67% this year alone -- faster than in the U.S. or in China. What accounts for the growth? [As reported by Bloomberg]( today, Taiwan is of course home to some pretty big, and often under-the-radar, investors in the form of gigantic life insurers. These life insurers have been chasing the yields available on U.S. corporate bonds, buying them in the form of Taiwan-domiciled ETFs that more easily fit into their portfolios. It's been a big enough trend that it's attracted some regulatory interest from the Taiwanese central bank, which has warned that the bond-buying spree could create currency risks for the insurers' portfolios. It's yet another example of unexpected links -- a direct line between the U.S. bond market and Taiwan -- created by a low-yield environment and an interconnected financial system. 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