Market News

FUNDAMENTAL OVERVIEW

 

USD:

The US dollar strengthened across the board on Friday after Fed Chair Warsh delivered a hawkish speech at the Jackson Hole Symposium.

The key passage was him saying "I would be hard pressed to describe broad financial conditions as restrictive". The market interpreted that as him leaning against the recent easing in financial conditions and, therefore, retightened them.

This process has, of course, extended the corrections in the "debasement" trades, with the US dollar returning to pre-US Treasury announcement levels. The rate hike probabilities for the September meeting have also increased, with the market now seeing a 60% chance…

Nasdaq analysis: NQ bulls attempt a reversal, but 29,800 remains the decisive test

Nasdaq futures are staging a credible short-term rebound from the 29,300 area, but the larger recovery remains unconfirmed. A sustained move above 29,540-29,590 would strengthen the bullish case and target 29,645, then 29,745-29,815. Failure below 29,370, and especially 29,200, would put sellers back in control.

Key takeaways from today's Nasdaq futures analysis

• Current bias: Mildly bullish recovery attempt, but still inside a wider range.
• Prediction score:+4 / +10, reflecting a tactical bullish edge rather than a confirmed trend change.
• First bullish threshold: Buyers need to reclaim and hold 29,540-29,590.
• Decisive resistance:29,745-29,815 is where…

Monday starts off quietly, with nothing significant in terms of scheduled economic events for the FX market. On Tuesday, we’ll get the final manufacturing PMI readings for Japan, the Eurozone, the U.K., and the U.S. Additionally, the Eurozone will release inflation data.

Wednesday brings Australia’s GDP q/q, followed by the RBNZ monetary policy announcement. In the U.S., we’ll get the ADP nonfarm employment change, while in Canada the BoC will publish its monetary policy announcement.

Thursday brings the final services PMI readings for the Eurozone, the U.K., and the U.S., as well as the U.S. weekly unemployment claims.

Finally, on Friday, Canada will release the employment change and unemployment rate, while the U.S. will publish average…

There are just a couple of expiries to take note of on the day, as highlighted in bold below.

The first being for EUR/USD at the 1.1600 level. The dollar bounced back on Friday after Fed chair Warsh's more hawkish communique at Jackson Hole. And that is pretty much setting the tone for major currencies as we look to the new week.

In the case of EUR/USD, the drop sees the pair fall back close to the 100-day moving average of 1.1570. So, that will act as more of a floor to price action for the session ahead. The expiries above might help to play a role in terms of limiting gains perhaps, with little else to work with in European trading later.

So as long as the dollar isn't finding any further legs to run, the levels above are likely to keep…

St Lucia has published its latest Citizenship by Investment Annual Report, offering a detailed look at the citizenship programme after the record application surge of 2023/24. New applications have fallen from the peak, but processing volumes, revenue, and operational capacity have all increased.

The latest figures suggest that the programme is moving beyond the 2023/24 surge and into a more stable phase.

Higher processing volumes are supporting revenue growth

Under the St Lucia citizenship by investment programme, the authorities processed 2,633 applications in 2024/25, more than twice the 1,248 processed a year earlier. Approvals also rose from…

Let's skip right to the chase. In case you missed the calls from last week:

• Month-end fixing to be mildly supportive of the dollar - BofA
• Some slight dollar selling likely to be the case for this month-end - Credit Agricole

It's a rare month that we see conflicting signals from banks, based on their respective month-end rebalancing models. However, it isn't the first and it surely won't be the last.

So, what can we make of this? As mentioned in one of the linked posts:

"It is best to remember that there is no exact science in deciphering or making sense of the impact of these rebalancing and fixing flows. I will always point out the notes from the banks when I can, but they are more of an elective signal. These are by no means hard and fast…

Iran's Islamic Revolutionary Guard Corps (IRGC) is out claiming that a rogue supertanker has been stopped in its tracks and caught fire in the Strait of Hormuz. That after being struck by two naval mines along the waterway. The tanker is said to be attempting to pass through the strait "illegally" along the southern passage.

The IRGC is also out saying that "all ships must comply with its rules for passage through the Strait of Hormuz".

This comes as no surprise as tensions are heating up between the US and Iran again from the weekend. As mentioned earlier, it's all about sending a message.

"You can bet that with tensions keeping high, Iran will also continue to make a showing of further disrupting traffic along the Strait of Hormuz. Even if…

• Asia shares slide as Iran clash lifts oil, yields stay elevated
• Gold extends slide as hawkish Warsh hangover weighs on session
• A pop for yen despite USD/JPY weakening earlier past 160 as Warsh's hawkish tone clashes with Bessent
• BofA says Warsh's Jackson Hole speech raises pressure for September hike
• Australian inventory data for Q2 will be a drag on GDP growth
• China factory activity beats forecasts but stays in contraction in August
• China official August Manufacturing PMI 49.8 (expected 49.7, prior 49.2)
• PBOC sets USD/ CNY reference rate for today at 6.7828 (vs. estimate at 6.7344)
• US fact checks IRGC as war of words follows Larak Island strike
• New Zealand data: ANZ business survey shows August business confidence 53.7 (prior 56.1)
• Goldman Sachs…

• Iran will respond decisively to any further military aggression from "the enemy"
• US and those supporting its military actions bear full responsibility for consequences of escalation
• Iran has attacked UAE's Al Minhad air base with drones earlier today
• US military bases in Jordan were also struck in response to the attack on Larak Island

It's a brand new week but it is the same old story between the US and Iran in the Middle East. The conflict continues to rage on with both sides exchanging military strikes once again through the weekend and today.

In case you missed it: investingLive Asia-Pacific market news: Oil jumps, renewed Iran-US strikes

As things continue to stay more heated, we are seeing oil prices jump up to start the week again. Brent…

The combination of renewed US-Iran fighting and firmer expectations for a US rate hike is hitting Asian equities on two fronts at once, with geopolitical risk pushing oil higher just as elevated bond yields make risk assets less attractive on a relative basis. The scale of the moves, with Japan and South Korea both posting sizeable declines, points to broad-based de-risking rather than a narrow, sector-specific reaction, consistent with the kind of session where traders cut exposure across the board rather than rotate into perceived safe havens within the region. China's more modest pullback despite a batch of PMI data that beat expectations, even though it remained below the 50-point expansion threshold, suggests the domestic policy and…

The yen's break below 160 (USD/JPY above 160) for the first time since the record joint intervention underscores how limited the impact of that $98.7 billion spending effort has been against the pull of widening rate differentials, and reinforces that verbal or coordinated FX intervention alone struggles to offset a genuine shift in relative monetary policy expectations. The accompanying rise in the 10-year JGB yield to a fresh 30-year high of 2.95 percent, tracking the move in US Treasury yields following Warsh's remarks, adds a second channel of pressure, since higher Japanese long-term yields raise the risk of spillover into global bond markets given Japan's role as a major holder of foreign assets. Bessent's description of the yen's…

With no fresh headlines driving the move, gold's continued softness looks like simple follow-through from Friday's sharp reaction to Warsh's hawkish Jackson Hole remarks, which knocked spot prices down more than 3 percent to around $4,450 an ounce and erased the metal's gains for the week. The absence of new catalysts means the metal is likely trading on residual positioning, with traders who were caught offside by Friday's move continuing to trim exposure, or dip-buyers holding off until there's more clarity on whether the coming August jobs and inflation data will validate Warsh's hawkish framing. With the September rate decision now more finely balanced than it appeared a week ago, gold is likely to stay rangebound and headline-driven…