Market News

The news headline for the data is here ICYMI:

• Japan wages data, July 2026: Headline earnings +4.7% y/y (expected +3.9%, prior +4%)

Since then we've had:

• Japan revised Q2 GDP: +1.4% y/y (preliminary 1.1%)

I'll have more to come on that GDP data, but for now, wrappoing up the wages data. 

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This is about as clean a data point as the BOJ could ask for heading into next week's meeting (September 17–18): real wages accelerating for a seventh straight month while nominal pay growth hits its fastest pace in almost three decades removes one of the central bank's main hesitations around hiking, that tightening might choke off the wage-led recovery it has been waiting on. With a hike already largely priced in, the read-through is less about whether the…

The revision itself was a modest beat against the preliminary figure but a miss against the median forecast, which is arguably the more useful signal here: growth held up reasonably well through a quarter when Middle East disruption could plausibly have done more damage, and that resilience is exactly what the BOJ needs to justify hiking without appearing to risk the recovery. With swap markets already pricing a 98% chance of a move to 1.25% next week and a further hike to 1.5% fully priced by January, the GDP print is unlikely to shift near-term rate expectations much further, but it removes one of the last data-dependent objections to proceeding. For the yen, that combination of confirmed hike and a clear path beyond it is broadly…

Also ahead:

• Preview: China trade data due today, a beat could firm up AUD as a demand proxy trade

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The People’s Bank of China is due to set the daily USD/CNY reference rate at around 0115 GMT (2115 US Eastern time), a fixing that remains one of the most closely watched signals in Asian foreign exchange markets.

China operates a managed floating exchange rate system, under which the renminbi (yuan) is allowed to trade within a prescribed band around a central reference rate, or midpoint, set each trading day by the PBOC. The current trading band permits the currency to move plus or minus 2% from the official midpoint during onshore trading hours.

Each morning, the PBOC determines the midpoint based on a range of inputs. These include the…

Goldman's framing gives traders a clear range to work with: $120 a barrel if shipping attacks broaden and intensify, $80 if Gulf exports normalize, with Brent trading near $97 as the note went out. That $23 spread either side of spot underscores how binary the near-term outlook remains, and Goldman's own house call, a $5 lift to both Brent and WTI forecasts for December 2026 and 2027, signals the bank sees the balance of risk skewed toward the upside scenario rather than normalization.

The bank's preference for expressing that risk through natural gas and diesel rather than crude itself is worth flagging separately, since it implies Goldman sees the biggest supply shock currently priced into product and gas markets rather than crude, a…

Just the data points this post. I'll have more to come on this separately, details and implications, etc. 

• revised Q2 GDP: +1.4% y/y (preliminary 1.1%)
• and +0.4% q/q (prelim 0.3%)

Background here:

• Preview: Japan revised Q2 GDP set to test BOJ September rate hike bets

• Preliminary Q2 GDP showed 0.3% quarter-on-quarter growth, an annualised 1.1%, both below forecasts of 0.5% and 2% respectively

Just the data on this post. 

more to come 

Coming up soon:

• Preview: Japan revised Q2 GDP set to test BOJ September rate hike bets

The retail slowdown adds another soft data point to the pile the Bank of England will weigh into its next policy assessment, with the loss of momentum in both BRC and Barclays readings, plus the sharp pullback in consumer confidence, reinforcing a narrative of a UK consumer losing steam rather than one at risk of overheating. That's a modest headwind for GBP on the margin, since it takes some pressure off the case for the BoE to hold rates higher for longer, though a single month of consumer data is unlikely to shift near-term policy pricing on its own. The youth jobs initiative is a longer-horizon story for GBP, more relevant to the structural labour market debate around NEET numbers and minimum wage costs than to near-term rate…

Data catch up. 

South Korean GDP Growth Final, Q2 2026:

QQ +0.6%

• expected +0.6%, prior +1.8%

YY +3.7%

• expected +3.7%, prior +3.6%

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New Zealand Manufacturing Activity Volume Q2 2026:

QQ +0.8%

• prior +3.6%

Manufacturing Activity:

QQ +3.1%

• prior +2.8%

Kiwi $ little moved.

The Saudi strikes push the conflict into new geographic territory beyond the Iran-US and Hormuz-focused fighting that had already driven Brent up around 8% and WTI nearly 10% last week, adding a fresh risk premium at the futures reopen. With Hormuz traffic already down to its lowest since May and US fuel inventories running well below seasonal averages, the market has little spare buffer to absorb further supply disruption, keeping the bias skewed to the upside. OPEC+ holding output policy unchanged for October removes any near-term supply offset, leaving prices reactive to headline risk out of both the Red Sea and Gulf theatres.

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The conflict spreading further to Saudi Arabia, and oil's six-week rally now has a new front to price in.

UBS's gold view sits apart from the immediate Fed story: higher real rates and a firmer dollar following the bank's hawkish repricing are near-term negatives for a non-yielding asset, but UBS isn't treating that as reason to abandon gold exposure altogether. Instead, it frames gold as a structural portfolio hedge against risks that a hawkish-but-strength-driven Fed doesn't address, including a resurgence in inflation, geopolitical shocks, or a longer-term erosion of fiscal and monetary credibility.

That framing puts UBS in a similar camp to Goldman Sachs, which last week described gold's pullback as an elongated pause and flagged $4,000 an ounce as a level to buy into, though UBS's version is explicitly a diversification call rather than…

UBS is drawing a sharp line between a Fed hiking because the economy is strong and a Fed hiking because inflation is getting away from it, and it's the former reading that keeps the bank's equity outlook intact.

The distinction matters for positioning: tightening alongside resilient GDP growth, AI capital spending and firm employment has historically been a supportive backdrop for risk assets, even with bouts of short-term volatility, whereas hikes driven by deteriorating growth and inflation dynamics would be read very differently. UBS is explicitly using this framework to tell clients not to treat the rate path as a reason to de-risk, continuing to favor equity exposure to AI, power and resources, and longevity themes through the hiking…

Goldman's framing keeps the structural bull case for gold intact even after a sharp pullback from January's peak, with the bank treating any dip toward $4,000 an ounce as a buying opportunity rather than a trend change. The read-through for positioning is that scaling into longs on weakness into the September FOMC is the preferred approach, with this week's CPI print (Goldman economists say this is critical) seen as the key near-term catalyst for how the Fed's reaction function gets priced.

Central bank accumulation, which Goldman frames as running at roughly double its pre-2022 pace, is the flow least likely to reverse even if retail and ETF demand stays subdued. Silver, by contrast, is flagged as the higher-beta, more retail-driven…