Market News

Market impact:

The reported rejection adds a fresh complication to the fragile arrangement governing traffic through the Strait of Hormuz, a waterway carrying roughly a fifth of global oil and LNG trade. If accurate, it suggests the post-conflict framework for administering the strait, agreed under the US-Iran memorandum, remains unresolved even as the safe-passage window created by that deal ticks down. I'm wary of leaning too hard on this one given the sourcing sits on a single unnamed official, but if it holds up, it meaningfully complicates the kind of full-reopening scenario that underpins bearish medium-term forecasts such as Citi's, and keeps a risk premium embedded in prices for longer than that forecast currently assumes. The…

• Deutsche Bank: The dollar is now leveraged to the AI race
• Vance: We're not talking to Iran unless they stop shooting at ships
• Preview: August non-farm payrolls by the numbers
• ISM non manufacturing PMI for August 55.4 versus 54.2 estimate. Stronger than expectations
• Feds Waller: Finally seeing some signs of disinflation in recent data. How are the markets reacting?
• US trade deficit widens sharply in July as AI-related imports surge
• US Initial Jobless claims 206K vs 205K estimate
• BOE Pill: Sees the need to raise the bank rate to 4.00%. GBPUSD moves higher on the news.

Markets:

• Gold up $86 to $4472
• US 10-year yields down 2 bps to 4.77%
• WTI crude oil up $0.66 to $91.87
• S&P 500 up 1.05%
• JPY leads, USD lags

Thursday was all about Waller as the influential…

Market impact: Citi's upward revision to its 3Q26 Brent forecast reflects near-term price strength, but the bank's unchanged, lower forecasts for 4Q26 and 2027 signal an expectation that oil markets will loosen substantially once the Strait of Hormuz fully reopens. Citi expects a larger than pre-conflict surplus to emerge as flows are normalised, a bearish signal for medium-term crude sentiment. In natural gas, Citi's downgrade to Henry Hub reflects confidence in continued US production growth keeping domestic prices contained, while the increase to TTF forecasts points to tighter European gas market conditions relative to previous expectations. Together, the revisions suggest diverging trajectories for oil and gas markets over the coming…

Data due from South Korea, Japan and Singapore. These are not marked as priority items and unless something is way off expectations are unlikely to move markets too much upon release.

Deutsche Bank's FX strategy team is out with a special report today that connects three things most people are still thinking about separately: the AI capital boom, asset tokenization, and the future of the dollar. The thesis from strategist Mallika Sachdeva is simple and uncomfortable. The US is going all-in on private foreign capital to fund both its AI buildout and its deficits, and blockchain rails are the tool being used to widen the funnel.

The scale of the US reach for capital this year has no precedent.

• AI venture funding has topped $400bn in 2026, running at three times last year's pace, with over 90% of the biggest deals in the US
• The two largest US AI labs have raised a combined $217bn this year, with each valued near $1…

Iran is obviously trying to angle for leverage by driving up the price of oil by distrupting the flow of traffic through Hormuz. The US, meanwhile, is trying to choke out Iran and extract severe economic costs.

In the middle are the people in the region and the global buyers of crude oil. No one is winning at the moment and there doesn't appear to be any hope of a near-term breakthrough. One idea floated this week was that Trump would declare victory and leave others to navigate ships through the Strait or negotiate with Iran. On the other side, Iran has been struggling to slow shipping and is now attacking land-based targets in Kuwait instead.

There are signs that the market is running out of patience (and oil) with crude prices up more…

What's expected:

• Consensus estimate +56K (range -25K to +121K)
• July -23K
• June +63K
• Private consensus estimate +45K
• Unemployment rate consensus estimate: 4.1% vs 4.1% prior
• Participation rate consensus 61.4% prior
• Prior underemployment U6 prior 7.9%
• Avg hourly earnings y/y exp +3.0% y/y vs +3.2% prior
• Avg hourly earnings m/m exp +0.3% vs +0.1% prior
• Avg weekly hours exp 34.3 vs 34.3 prior

August jobs so far:

• ADP employment report +38K (lowest since Jan) vs +47K expected and +46K prior
• ISM services employment 47.8 vs 47.4 prior
• ISM manufacturing employment 51.2 vs 52.5 exp and 52.8 prior
• Challenger Job Cuts 52,881 vs 33,429 prior
• Philly employment +27.9 vs +10.0 prior
• Empire employment +9.3 vs +11.4 prior
• Initial jobless claims survey week 206K vs 187K…

The USDCHF is down around 0.87% on the day as sellers follow the broader US dollar lower after Fed Governor Christopher Waller’s more dovish comments. The video above provides education and technical knowledge about the price action seen in the pair both yesterday and today as the price tumbled.

Technically, the move has taken the price below its 100 hour moving average near 0.8100 and its 200 hour moving average near 0.8070.

Those breaks put the sellers in control. However, the story started yesterday when the buyers had their shot—and could not sustain the break.

The price extended above a swing area between 0.81383 and 0.81513, reaching a high near 0.8158. That area has acted as both support and resistance on the chart, making it an…

I don’t know a lot about Bloom Energy, which trades under the ticker BE. However, thanks to AI, I can quickly learn what the company does, who its customers are, and how its business is performing.

That is useful information. But here is the question for traders: Do you need to be an expert on the company to develop a trade with a defined bias, defined risk, and defined targets?

I would argue no.

First, a little background.

Bloom Energy makes on-site electricity-generation systems called Energy Servers. Its fuel cells convert fuels such as natural gas into electricity through an electrochemical process rather than traditional combustion. Think of them as modular power plants located at a customer’s facility.

The technology appeals to…

Bank of England Chief Economist Huw Pill is speaking and says:

• My own response has pointed to a need to raise Bank Rate to 4%.

• Raising Bank Rate on this basis need not be the start of a prolonged and aggressive series of increases.

• A prompt increase in Bank Rate may serve to head off some of the potential insidious “catch-up” dynamics.

• Clear, prompt and decisive policy action and communication would help steer markets and reduce uncertainty.

• The MPC should be cautious about using relatively extreme “what if” scenarios to explain its analytical framework.

• Fine tuning interest rates in the face of uncertainty about energy prices is problematic.

• Reasons to believe that second-round effects is now will be stronger than estimated in Halcyon days of…

The broader US stock indices are making a break to the upside. The catalyst? More dovish comments from Fed Governor Christopher Waller.

Waller sees signs that inflation pressures are easing, although he still wants to see next week’s PPI and CPI reports ahead of the September 16 Fed rate decision. His comments have helped push US yields lower and stocks higher.

Why does that matter? Lower yields can reduce borrowing costs and make stocks more attractive relative to bonds. They can also increase the value investors place on companies’ future earnings, which is particularly relevant for growth and technology stocks. That relationship does not work every time, but today the markets are following that familiar pattern.

The gains have been led by…

• Nonmanufacturing PMI prior month 54.1
• Nonmanufacturing PMI for August 55.4 versus 54.2 estimate
• nonmanufacturing business activity 61.7 versus 59.1 last month
• Employment index 47.8 versus 47.4 last month
• New orders index 60.9 versus 57 42 last month
• Prices paid 72.6 versus 70.3 last month

The US ISM nonmanufacturing PMI rose to 55.4 in August from 54.1 last month, comfortably above the 54.2 estimate. The details show stronger activity, with business activity rising to 61.7 from 59.1 and new orders increasing to 60.9. However, prices paid also moved higher to 72.6 from 70.3, signaling more widespread cost pressures. Employment improved modestly to 47.8 from 47.4 but remained below the 50 level that separates expansion from contraction. Putting…